As filed with the Securities and Exchange Commission on February 2, 2009

1933 Act Registration No. 333-_________

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-14

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933

[ ] Pre-Effective [ ] Post-Effective
Amendment No. Amendment No.

METROPOLITAN SERIES FUND, INC.*
[Exact Name of Registrant as Specified in Charter]

Area Code and Telephone Number: (617) 578-4036

501 Boylston Street
Boston, Massachusetts 02116
-----------------------------------

Michael P. Lawlor, Esq.
MetLife Advisers, LLC
501 Boylston Street
Boston, Massachusetts 02116
(Name and Address of Agent for Service)

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

Copy to:

John M. Loder, Esq.
Ropes & Gray LLP
One International Place
Boston, Massachusetts 02110

The Registrant has registered an indefinite amount of securities of its
BlackRock Legacy Large Cap Growth Portfolio under the Securities Act of 1933
pursuant to Section 24(f) of the Investment Company Act of 1940; accordingly, no
fee is payable herewith. A Rule 24f-2 Notice for the Registrant's fiscal year
ended December 31, 2009 will be filed with the Commission on or about March 31,
2010.

It is proposed that this filing will become effective on March 5, 2009
pursuant to Rule 488 under the Securities Act of 1933.

MET INVESTORS SERIES TRUST
5 Park Plaza
Suite 1900
Irvine, California 92614
March 5, 2009

Dear Contract Owner:

As a Contract Owner of a variable annuity or variable life insurance
contract (the "Contract") issued by First MetLife Investors Insurance Company,
General American Life Insurance Company, MetLife Insurance Company of
Connecticut, MetLife Investors Insurance Company, MetLife Investors USA
Insurance Company, and Metropolitan Life Insurance Company (each an "Insurance
Company"), you have the right to instruct the Insurance Company how to vote
certain shares of the Met/AIM Capital Appreciation Portfolio (the "AIM
Portfolio") of Met Investors Series Trust (the "Trust") at a Special Meeting of
Shareholders to be held on April 30, 2009. Although you are not directly a
shareholder of the AIM Portfolio, some or all of your Contract value is
invested, as provided by your Contract, in the AIM Portfolio. Accordingly, you
have the right under your Contract to instruct the Insurance Company how to vote
the AIM Portfolio's shares that are attributable to your Contract at the Special
Meeting. Before the Special Meeting, I would like your vote on the important
proposal described in the accompanying Prospectus/Proxy Statement.

The Prospectus/Proxy Statement describes the proposed reorganization of the
AIM Portfolio. If shareholders of the AIM Portfolio approve the reorganization,
all of the assets of the AIM Portfolio would be acquired by the BlackRock Legacy
Large Cap Growth Portfolio (the "BlackRock Portfolio"), a series of Metropolitan
Series Fund, Inc., in exchange for shares of the BlackRock Portfolio and the
assumption by the BlackRock Portfolio of the liabilities of the AIM Portfolio.
The BlackRock Portfolio's investment objective is substantially similar to the
investment objective of the AIM Portfolio, and BlackRock Portfolio's investment
policies are similar to those of the AIM Portfolio.

You will receive Class A or Class E shares, as the case may be, of the
BlackRock Portfolio having an aggregate net asset value equal to the aggregate
net asset value of your AIM Portfolio's shares. Details about the BlackRock
Portfolio's investment objective, performance, and management team are contained
in the attached Prospectus/Proxy Statement. For federal income tax purposes, the
transaction is expected to be a non-taxable event for shareholders and Contract
Owners.

The Board of Trustees has approved the proposal for the AIM Portfolio and
recommends that you vote FOR the proposal.

I realize that this Prospectus/Proxy Statement will take time to review,
but your vote is very important. Please take the time to familiarize yourself
with the proposal. If you attend the Special Meeting, you may give your voting
instructions in person. If you do not expect to attend the Special Meeting,
please complete, date, sign and return the enclosed voting form in the enclosed
postage-paid envelope. You may also transmit your voting instructions by
telephone or through the Internet. Instructions on how to complete the voting
instructions form or vote by telephone or through the Internet are included
immediately after the Notice of Special Meeting.

If you have any questions about the voting instructions form please call
the Trust at 1-800-848-3854. If we do not receive your completed voting
instructions form or your telephone or Internet vote within several weeks, you
may be contacted by Computshare Fund Services, our proxy solicitor, who will
remind you to pass on your voting instructions.

Thank you for taking this matter seriously and participating in this
important process.

Sincerely,

Elizabeth M. Forget
-------------------
/s/ Elizabeth M. Forget
President
Met Investors Series Trust

MET INVESTORS SERIES TRUST
5 Park Plaza
Suite 1900
Irvine, California 92614

Met/AIM Capital Appreciation Portfolio

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on April 30, 2009

To the Shareholders of Met Investors Series Trust:

NOTICE IS HEREBY GIVEN THAT a Special Meeting of the Shareholders of the
Met/AIM Capital Appreciation Portfolio of Met Investors Series Trust (the
"Trust"), a Delaware statutory trust, will be held at the offices of the Trust,
1095 Avenue of the Americas, 40th Floor, New York, New York 10036 on April 30,
2009 at 10:00 a.m. Eastern Time and any adjournments thereof (the "Special
Meeting") for the following purpose:

1. To consider and act upon an Agreement and Plan of Reorganization (the
"Plan") providing for the acquisition of all of the assets of the Met/AIM
Capital Appreciation Portfolio (the "AIM Portfolio") by the BlackRock
Legacy Large Cap Growth Portfolio (the "BlackRock Portfolio"), a series of
Metropolitan Series Fund, Inc., in exchange for shares of the BlackRock
Portfolio and the assumption by the BlackRock Portfolio of the liabilities
of the AIM Portfolio. The Plan also provides for distribution of these
shares of the BlackRock Portfolio to shareholders of the AIM Portfolio in
liquidation and subsequent termination of the AIM Portfolio. A vote in
favor of the Plan is a vote in favor of the liquidation and dissolution of
the AIM Portfolio.

The Board of Trustees has fixed the close of business on January 30, 2009
as the record date for determination of shareholders entitled to notice of and
to vote at the Special Meeting. By order of the Board of Trustees

Richard C. Pearson
Secretary
March 5, 2009

CONTRACT OWNERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE REQUESTED TO
COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING VOTING INSTRUCTIONS FORM IN THE
ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES, OR
FOLLOW THE INSTRUCTIONS IN THE MATERIALS RELATING TO TELEPHONE OR INTERNET
VOTING. INSTRUCTIONS FOR THE PROPER EXECUTION OF THE VOTING INSTRUCTIONS FORM
ARE SET FORTH IMMEDIATELY FOLLOWING THIS NOTICE. IT IS IMPORTANT THAT THE FORM
BE RETURNED PROMPTLY.

INSTRUCTIONS FOR SIGNING VOTING INSTRUCTIONS FORM

The following general rules for signing voting instructions forms may be of
assistance to you and avoid the time and expense to the Trust involved in
validating your vote if you fail to sign your voting instructions form properly.

1. Individual Accounts: Sign your name exactly as it appears in the
registration on the voting instructions form.

2. Joint Accounts: Either party may sign, but the name of the party signing
should conform exactly to the name shown in the registration on the voting
instructions form.

3. All Other Accounts: The capacity of the individual signing the voting
instructions form 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 Accounts

(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, Jr. UGMA . . . . . . . . . . . John B. Smith

(2) Estate of John B. Smith . . . . . . . . . . . . . . .John B. Smith, Jr., Executor

INSTRUCTIONS FOR VOTING BY TELEPHONE

Call 1-866-235-4258 and follow the simple instructions. Have your proxy ready.

You do not need to return your voting instructions form if you vote by
telephone.

INSTRUCTIONS FOR VOTING OVER THE INTERNET

To provide voting instructions via the Internet follow the four easy steps
below.

1. Read the accompanying proxy information and voting instructions form.

2. Go to www.proxy-direct.com.

3. Enter the "CONTROL NO." and "SECURITY CODE" from the upper right hand corner
of your voting instructions form.

4. Follow the simple online instructions.

You do not need to return your voting instructions form if you vote via the
Internet.

ACQUISITION OF ASSETS OF

MET/AIM CAPITAL APPRECIATION PORTFOLIO
a series of
Met Investors Series Trust
5 Park Plaza
Suite 1900
Irvine, California 92614
(800) 848-3854

BY AND IN EXCHANGE FOR SHARES OF

BLACKROCK LEGACY LARGE CAP GROWTH PORTFOLIO
a series of
Metropolitan Series Fund, Inc.
501 Boylston Street
Boston, Massachusetts 02116
(800) 638-7732

PROSPECTUS/PROXY STATEMENT

DATED March 5, 2009

This Prospectus/Proxy Statement is being furnished in connection with the
proposed Agreement and Plan of Reorganization (the "Plan") which will be
submitted to shareholders of Met Investors Series Trust's Met/AIM Capital
Appreciation Portfolio (the "AIM Portfolio") for consideration at a Special
Meeting of Shareholders to be held April 30, 2009 at 10:00 a.m. Eastern time at
the offices of the Met Investors Series Trust, 1095 Avenue of the Americas, 40th
Floor, New York, New York 10036, and any adjournments thereof (the "Meeting").

GENERAL

Subject to the approval of the AIM Portfolio's shareholders, the Board of
Trustees of Met Investors Series Trust (the "Trust") has approved the proposed
reorganization of the AIM Portfolio into the BlackRock Legacy Large Cap Growth
Portfolio (the "BlackRock Portfolio"), a series of Metropolitan Series Fund,
Inc. (the "Fund"). The AIM Portfolio and the BlackRock Portfolio are sometimes
referred to in this Prospectus/Proxy Statement individually as a "Portfolio" and
collectively as the "Portfolios."

First MetLife Investors Insurance Company, General American Life Insurance
Company, MetLife Insurance Company of Connecticut, MetLife Investors Insurance
Company, MetLife Investors USA Insurance Company, and Metropolitan Life
Insurance Company ("MetLife") (each an "Insurance Company") are the record
owners of the AIM Portfolio's shares and at the Meeting will vote the shares of
the AIM Portfolio held in their separate accounts.

As an owner of a variable annuity contract (a "Contract") issued by the
Insurance Company, you have the right to instruct the Insurance Company how to
vote the shares of the AIM Portfolio that are attributable to your Contract at
the Meeting. Although you are not directly a shareholder of the AIM Portfolio,
you have this right because some or all of your Contract value is invested, as
provided by your Contract, in the AIM Portfolio. For simplicity, in this
Prospectus/Proxy Statement:

o "Record Holder" of the AIM Portfolio refers to the Insurance Company
which holds the AIM Portfolio's shares of record, unless indicated
otherwise in this Prospectus/Proxy Statement;

o "shares" refers generally to your shares of beneficial interest in the
AIM Portfolio; and

o "shareholder" or "Contract Owner" refers to you.

In the reorganization, all of the assets of the AIM Portfolio will be
acquired by the BlackRock Portfolio in exchange for Class A and Class E shares
of the BlackRock Portfolio and the assumption by the BlackRock Portfolio of the
liabilities of the AIM Portfolio (the "Reorganization"). If the Reorganization
is approved, shares of the BlackRock Portfolio will be distributed to each
Record Holder in liquidation of the Portfolio, and the AIM Portfolio will be
terminated as a series of the Trust. You will receive Class A or Class E shares
of the BlackRock Portfolio, depending on the class of shares of the AIM
Portfolio you currently hold. You will then hold that number of full and
fractional shares of the BlackRock Portfolio which have an aggregate net asset
value equal to the aggregate net asset value of your shares of the AIM
Portfolio.

The BlackRock Portfolio is a separate diversified series of the Fund, a
Maryland corporation, which is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act").
The AIM Portfolio is a separate diversified series of the Trust, a Delaware
statutory trust, which is also an open-end management investment company
registered under the 1940 Act. The primary investment objective of the AIM
Portfolio is substantially similar to that of the BlackRock Portfolio, as
follows:

- ------------------------------------------------------- -------------------------------------------------------------
Portfolio Investment Objective

The principal investment strategies of the AIM Portfolio are similar to
those of the BlackRock Portfolio. Each Portfolio invests its assets primarily in
equity securities.

Material Differences in the Portfolios' Investment Strategies

Although each Portfolio primarily invests in a diversified portfolio of
equity securities, the BlackRock Portfolio invests primarily in stocks believed
to have long-term growth potential, while the AIM Portfolio uses an investment
approach that blends growth and value. The BlackRock Portfolio invests primarily
in large capitalization equities, while the AIM Portfolio may invest in issuers
with any size of capitalization.

This Prospectus/Proxy Statement explains concisely the information about
the BlackRock Portfolio that you should know before voting on the
Reorganization. Please read it carefully and keep it for future reference.
Additional information concerning each Portfolio and the Reorganization is
contained in the documents described below, all of which have been filed with
the Securities and Exchange Commission (the "SEC"):

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Information about the AIM Portfolio: How to Obtain this Information:
- ------------------------------------ -------------------------------
- --------------------------------------------------------------------- --------------------------------------------------
- --------------------------------------------------------------------- --------------------------------------------------
Prospectus of the Trust relating to the AIM Portfolio, dated April Copies are available upon request and without
28, 2008, as supplemented charge if you:

Statement of Additional Information of the Trust relating to the o Write to the Trust at the address
AIM Portfolio, dated April 28, 2008, as supplemented listed on the cover page of this
Prospectus/Proxy Statement; or
Annual Report of the Trust relating to the AIM Portfolio for the
year ended December 31, 2008 o Call (800) 848-3854 toll-free.
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Information about the BlackRock Portfolio: How to Obtain this Information:
- ------------------------------------------ -------------------------------
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- --------------------------------------------------------------------- --------------------------------------------------
Prospectus of the Fund relating to the BlackRock Portfolio, dated A copy is available upon request and without
April 28, 2008, as supplemented, which accompanies this charge if you:
Prospectus/Proxy Statement
o Write to the Fund at the address listed
Statement of Additional Information of the Fund relating to the on the cover page of this Prospectus/Proxy
BlackRock Portfolio, dated April 28, 2008, as supplemented Statement; or

Annual Report of the Fund relating to the BlackRock Portfolio for o Call (800) 638-7732 toll-free.
the year ended December 31, 2008
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- --------------------------------------------------------------------- --------------------------------------------------
Information about the Reorganization: How to Obtain this Information:
- ------------------------------------- -------------------------------
- --------------------------------------------------------------------- --------------------------------------------------
- --------------------------------------------------------------------- --------------------------------------------------
Statement of Additional Information, dated March __, 2009, which A copy is available upon request and without
relates to this Prospectus/Proxy Statement and the Reorganization charge if you:

o Write to the Fund at the address listed
on the cover page of this Prospectus/Proxy
Statement; or

o Call (800) 638-7732 toll-free.
- --------------------------------------------------------------------- --------------------------------------------------

You can also obtain copies of any of these documents without charge on the
EDGAR database on the SEC's Internet site at http://www.sec.gov. Copies are
available for a fee by electronic request at the following e-mail address:
publicinfo@sec.gov, or from the Public Reference Branch, Office of Consumer
Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549, or the SEC's Chicago Regional Office located at 175 W.
Jackson Boulevard, Suite 900, Chicago, IL 60604 and the SEC's New York Regional
Office located at 3 World Financial Center, Suite 400, New York, NY 10281-1022.
Information on the operation of the Public Reference Branch may be obtained by
calling (202) 551-8090.

Information relating to the AIM Portfolio contained in the Prospectus of
the Trust dated April 28, 2008 (SEC File No. 811-10183) is incorporated by
reference into this document. (This means that such information is legally
considered to be part of this Prospectus/Proxy Statement.) Information relating
to the BlackRock Portfolio contained in the Prospectus of the Fund dated April
28, 2008 (SEC File No. 811-03618) also is incorporated by reference into this
document. The Statement of Additional Information dated March 5, 2009 relating
to this Prospectus/Proxy Statement and the Reorganization, which includes the
financial statements of the Trust relating to the AIM Portfolio for the year
ended December 31, 2008, and of the Fund relating to the BlackRock Portfolio for
the year ended December 31, 2008, and the pro forma financials of the Fund
relating to the BlackRock Portfolio for the twelve-month period ended December
31, 2008, is incorporated by reference into this document.

- -------------------------------------------------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT DETERMINED THAT THE INFORMATION
IN THIS PROSPECTUS/PROXY STATEMENT IS ACCURATE OR ADEQUATE, NOR HAS IT APPROVED
OR DISAPPROVED THESE SECURITIES. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A
CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------

An investment in the BlackRock Portfolio through a Contract:

o is not a deposit of, or guaranteed by, any bank

o is not insured by the FDIC, the Federal Reserve Board or any other
government agency

o is not endorsed by any bank or government agency

o involves investment risk, including possible loss of the purchase
payment of your original investment

TABLE OF CONTENTS

Page

SUMMARY.............................................................................................................6
Why is the Reorganization being proposed?..................................................................6
After the Reorganization, what shares of the BlackRock Portfolio will I own?...............................6
How will the Reorganization affect me?.....................................................................7
Will I be able to purchase and redeem shares, change my investment options, annuitize and
receive distributions the same way?........................................................................8
How do the Trustees recommend that I vote?.................................................................8
How do the Portfolios' investment objectives, principal investment strategies and risks compare?...........8
How do the Portfolios' fees and expenses compare?.........................................................10
How do the Portfolios' performance records compare?.......................................................13
Who will be the Adviser, Subadviser and Portfolio Manager of my Portfolio after the
Reorganization? What will the advisory and subadvisory fees be after the Reorganization?.................15
What will be the primary federal tax consequences of the Reorganization?..................................16
RISKS..............................................................................................................17
Are the risk factors for the Portfolios similar?..........................................................17
What are the primary risks of investing in each Portfolio?................................................17
INFORMATION ABOUT THE REORGANIZATION...............................................................................20
Reasons for the Reorganization............................................................................20
Agreement and Plan of Reorganization......................................................................22
Federal Income Tax Consequences...........................................................................23
Pro Forma Capitalization..................................................................................24
Distribution of Shares....................................................................................26
Purchase and Redemption Procedures........................................................................26
Exchange Privileges.......................................................................................27
Dividend Policy...........................................................................................27
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS....................................................................27
Form of Organization......................................................................................28
Capitalization............................................................................................28
Shareholder Liability.....................................................................................28
Shareholder Meetings and Voting Rights....................................................................29
Liquidation...............................................................................................30
Liability and Indemnification of Trustees/Directors.......................................................30
VOTING INFORMATION CONCERNING THE MEETING..........................................................................31
Shareholder Information...................................................................................33
Control Persons and Principal Holders of Securities.......................................................34
FINANCIAL STATEMENTS AND EXPERTS...................................................................................34
LEGAL MATTERS......................................................................................................34
ADDITIONAL INFORMATION.............................................................................................34
OTHER BUSINESS.....................................................................................................35
EXHIBIT A - FORM OF AGREEMENT AND PLAN OF REORGANIZATON...........................................................A-1

SUMMARY

THIS SECTION SUMMARIZES THE PRIMARY FEATURES AND CONSEQUENCES OF THE
REORGANIZATION. IT MAY NOT CONTAIN ALL OF THE INFORMATION THAT IS IMPORTANT TO
YOU. TO UNDERSTAND THE REORGANIZATION, YOU SHOULD READ THIS ENTIRE
PROSPECTUS/PROXY STATEMENT AND EXHIBIT A.

This summary is qualified in its entirety by reference to the additional
information contained elsewhere in this Prospectus/Proxy Statement, the
Prospectuses and Statements of Additional Information relating to the Portfolios
and the form of Agreement and Plan of Reorganization (previously defined as the
"Plan"), which is attached to this Prospectus/Proxy Statement as Exhibit A.

Why is the Reorganization being proposed?

The Reorganization is part of a restructuring designed to eliminate the
offering of overlapping funds in the MetLife, Inc. families of funds with
similar investment objectives and similar investment strategies that serve as
funding vehicles for insurance contracts that are offered by affiliates of
MetLife. The AIM Portfolio is not expected to garner sufficient assets in order
to achieve economies of scale. In addition, the advisory fee and total fund
operating expenses of the BlackRock Portfolio immediately after the
Reorganization are expected to be less than those of the AIM Portfolio. The
Reorganization may allow the merged Portfolio to achieve operational
efficiencies. In addition, the performance record of the BlackRock Portfolio for
the one-, three-, five-, and ten-year periods ended December 31, 2008 has been
better than that of the AIM Portfolio. Therefore, the Trustees believe that the
Reorganization is in the best interests of the AIM Portfolio and its
shareholders.

......What are the key features of the Reorganization?

The Plan sets forth the key features of the Reorganization. For a complete
description of the Reorganization, see Exhibit A. The Plan generally provides
for the following:

o....the transfer in-kind of all of the assets of the AIM Portfolio to
the BlackRock Portfolio in exchange for Class A and Class E shares of
the BlackRock Portfolio;

o the assumption by the BlackRock Portfolio of all of the liabilities of
the AIM Portfolio;

o the liquidation of the AIM Portfolio by distribution of Class A and
Class E shares of the BlackRock Portfolio to the AIM Portfolio's
shareholders; and

o the structuring of the Reorganization as a tax-free reorganization for
federal income tax purposes.

The Reorganization is expected to be completed on or about May 1, 2009.

After the Reorganization, what shares of the BlackRock Portfolio will I own?

If you own Class A shares of the AIM Portfolio, you will own Class A shares
of the BlackRock Portfolio. If you own Class E shares of the AIM Portfolio, you
will own Class E shares of the BlackRock Portfolio.

The new shares you receive will have the same total value as your shares of
the AIM Portfolio as of the close of business on the day immediately prior to
the Reorganization.

How will the Reorganization affect me?

It is anticipated that the Reorganization will affect you as follows,
although no assurance can be given that the Reorganization will result in any
such benefits:

o OPERATING EFFICIENCIES: Upon the Reorganization of the AIM Portfolio
into the BlackRock Portfolio, operating efficiencies may be achieved
by the BlackRock Portfolio because it will have a greater level of
assets. As of December 31, 2008, the AIM Portfolio's total net assets
were approximately $108.3 million while the BlackRock Portfolio's
total net assets were approximately $303.5 million.

o COST CONSIDERATIONS: The total operating expenses for the twelve-month
period ended December 31, 2008 were lower for the BlackRock
Portfolio's Class A shares than the AIM Portfolio's Class A shares.
Total operating expenses for Class A shares of the AIM Portfolio for
the twelve-month period ended December 31, 2008 were 0.87%, while
total operating expenses for Class A shares of the BlackRock Portfolio
for that same period were 0.78%. Assuming consummation of the
Reorganization had occurred on January 1, 2008, the total operating
expenses, for the twelve-month period ended December 31, 2008 for
Class A shares of the BlackRock Portfolio would have been 0.78%.

o PERFORMANCE: The performance record of the BlackRock Portfolio for the
one-, three-, five-, and ten-year periods ended December 31, 2008 has
been better than that of the AIM Portfolio.

The Reorganization will not affect your Contract rights. The value of your
Contract will remain the same immediately following the Reorganization. The Fund
will sell its shares on a continuous basis at net asset value only to insurance
companies and to employee benefit plans that are qualified plans under federal
tax law. The Insurance Company will keep the same separate accounts. Your
Contract values will be allocated to the same separate account and that separate
account will invest in the BlackRock Portfolio after the Reorganization. After
the Reorganization your Contract values will depend on the performance of the
BlackRock Portfolio rather than that of the AIM Portfolio. The AIM Portfolio
will pay for the costs of the Meeting, this proxy solicitation and any adjourned
session. The costs to be paid by the AIM Portfolio ultimately will be borne by
the Portfolio's shareholders and are less than the expected savings for the AIM
Portfolio's shareholders due to the operational efficiencies incurred due to the
Reorganization.

Like the AIM Portfolio, the BlackRock Portfolio will declare and pay
dividends from net investment income and will distribute net realized capital
gains, if any, to the Insurance Company separate accounts (not to you) once a
year. These dividends and distributions will continue to be reinvested by your
Insurance Company in additional Class A or Class E shares of the BlackRock
Portfolio.

Will I be able to purchase and redeem shares, change my investment options,
annuitize and receive distributions the same way?

The Reorganization will not affect your right to purchase and redeem
shares, to change among the Insurance Company's separate account options, to
annuitize, and to receive distributions as permitted by your Contract. After the
Reorganization, you will be able under your current Contract to purchase
additional Class A and Class E shares of the BlackRock Portfolio. For more
information, see "Purchase and Redemption Procedures," "Exchange Privileges" and
"Dividend Policy" below.

How do the Trustees recommend that I vote?

The Trustees of the Trust, including the Trustees who are not "interested
persons" (the "Disinterested Trustees"), as such term is defined in the 1940
Act, have concluded that the Reorganization would be in the best interests of
the AIM Portfolio and its shareholders, and that the AIM Portfolio's
shareholders' interests will not be diluted as a result of the Reorganization.
Accordingly, the Trustees have submitted the Plan for the approval of the
shareholders of the AIM Portfolio.

THE TRUSTEES RECOMMEND THAT YOU VOTE FOR THE PROPOSED REORGANIZATION

The Directors of the Fund have approved the Plan on behalf of the BlackRock
Portfolio and its shareholders.

How do the Portfolios' investment objectives, principal investment
strategies and risks compare?

The investment objective of the AIM Portfolio is substantially similar to
that of the BlackRock Portfolio, and the principal investment strategies of the
Portfolios are similar. The investment objective of each Portfolio is
non-fundamental, which means that it may be changed by vote of the
Trustees/Directors without shareholder approval.

The following table compares the AIM Portfolio's and BlackRock Portfolio's
investment objectives and principal investment strategies, as set forth in the
Prospectuses and Statements of Additional Information relating to the
Portfolios.

------------------ ------------------------------------------------ -----------------------------------------------
AIM Portfolio BlackRock Portfolio
------------------ ------------------------------------------------ -----------------------------------------------
------------------ ------------------------------------------------ -----------------------------------------------

Investment Capital appreciation. Long term growth of capital.
Objective
------------------ ------------------------------------------------ -----------------------------------------------
------------------ ------------------------------------------------ -----------------------------------------------
Principal The Portfolio invests principally in common The Portfolio invests at least 80% of its
Investment stocks of domestic and foreign companies the assets in large capitalization equity
Strategies subadviser believes are likely to benefit from securities. For this purpose, the subadviser
new or innovative products, services or considers large capitalization securities to
processes, as well as those that have be issued by companies with market
experienced above-average, long-term growth in capitalizations, at time of purchase, of at
earnings and have excellent prospects for least $1 billion. The Portfolio invests
future growth. The subadviser uses an primarily in stocks believed by the
investment approach that blends growth and subadviser to have long-term growth
value investing. potential.
------------------ ------------------------------------------------ -----------------------------------------------
------------------ ------------------------------------------------ -----------------------------------------------
The Portfolio may invest up to 25% of its The Portfolio may invest without limitation
total assets in foreign securities, including in foreign equity securities, including in
in emerging markets. emerging markets.

------------------------------------------------ -----------------------------------------------
------------------------------------------------ -----------------------------------------------
The Portfolio may purchase call options, which The Portfolio may buy and sell future
are derivatives, but not for speculative contracts on recognized exchanges and may
purposes, and may write covered call options also use options, in both cases as a hedge or
on no more than 20% of the value of its net to enhance returns.
assets.
------------------ ------------------------------------------------ -----------------------------------------------

The principal risks of investing in the AIM Portfolio are similar to those
of investing in the BlackRock Portfolio. They include:

o Market risk - a Portfolio's share price can fall because of weakness
in the broad market, a particular industry, or specific holdings. A
Portfolio's investment performance may also be harmed by potentially
rapid changes in the prices of equity securities.

o Market capitalization risk - investments primarily in issuers in one
market capitalization category (large, medium or small) carry the risk
that due to current market conditions that category may be out of
favor; stocks of smaller companies may be affected to a greater extent
than larger companies by general economic changes and conditions in
particular industries.

o Investment style risk - different investment styles such as growth or
value investing tend to shift in or out of favor, depending on market
and economic conditions as well as investor sentiment.

o Foreign investment risk - investments in foreign securities involve
risks relating to political, social and economic developments abroad,
as well as risks resulting from differences between the regulations to
which U.S. and foreign issuers are subject. These risks are increased
for emerging market securities.

o Derivatives risk - derivatives may not correlate perfectly with the
relevant assets, rates and indices. The use of derivatives can
significantly increase a Portfolio's exposure to market risk or credit
risk of the counterparty.

The AIM Portfolio may invest for temporary defensive purposes some or all
of the assets in money market securities or utilize other investment strategies
that may be inconsistent with the Portfolio's principal investment strategy.
Temporary defensive instruments generally include U.S. government securities,
bank time deposits denominated in the currency of any major nation, commercial
paper and repurchase agreements. The AIM Portfolio's subadviser may also invest
in these types of securities or hold cash while looking for suitable investment
opportunities or to maintain liquidity. [The BlackRock Portfolio may hold up to
100% of its assets in cash or high-quality debt securities for temporary
defensive purposes. The types of high-quality instruments in which the BlackRock
Portfolio may invest for such purposes include money market securities, such as
repurchase agreements, and securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, certificates of deposit, time
deposits and bankers' acceptances of certain qualified financial institutions
and highly-rated corporate commercial paper. Although a Portfolio would employ
these measures only in seeking to avoid losses, they could reduce the benefit
from an upswing in the market or prevent the Portfolio from meeting its
investment objectives.

For a detailed discussion of the Portfolios' risks, see the section
entitled "Risks" below.

The Portfolios have other investment policies, practices and restrictions
which, together with their related risks, are also set forth in the Prospectus
and Statement of Additional Information of each of the Portfolios.

Although the AIM Portfolio and the BlackRock Portfolio have similar
investment objectives and similar principal investment strategies, it is
anticipated that some of the securities held by the AIM Portfolio will be sold
in order to comply with the policies and investment practices of the BlackRock
Portfolio in connection with the Reorganization. If such sales occur before the
date of the Reorganization, any transaction costs will be borne by the AIM
Portfolio. If such sales occur after the date of the Reorganization, any
transaction costs will be borne by the BlackRock Portfolio.

How do the Portfolios' fees and expenses compare?

The AIM Portfolio offers two classes of shares: Class A and Class E. The
BlackRock Portfolio offers three classes of shares: Class A, Class B and Class
E. You will not pay any initial or deferred sales charge in connection with the
Reorganization.

The following tables allow you to compare the various fees and expenses
that you may pay for buying and holding Class A and Class E shares of each of
the Portfolios. The information for "BlackRock Portfolio (Pro Forma)" shows you
what fees and expenses are estimated to be assuming the Reorganization takes
place.

The amounts for the Class A and Class E shares of the AIM Portfolio and
BlackRock Portfolio set forth in the following tables and the examples are based
on the expenses for the AIM Portfolio and the BlackRock Portfolio, respectively,
for the twelve-month period ended December 31, 2008. The amounts for Class A
shares of the BlackRock Portfolio (Pro Forma) set forth in the following table
and in the example are based on what the expenses of the BlackRock Portfolio
would have been for the twelve-month period ended December 31, 2008, had the
Reorganization taken place as of January 1, 2008.

THESE TABLES DO NOT REFLECT ANY FEES, EXPENSES AND WITHDRAWAL CHARGES
IMPOSED BY THE CONTRACTS FOR WHICH THE PORTFOLIOS SERVE AS INVESTMENT VEHICLES.
IF THOSE FEES AND EXPENSES HAD BEEN INCLUDED, YOUR COSTS WOULD BE HIGHER.

Annual Portfolio Operating Expenses (expenses that are deducted from Portfolio
assets)
- -------------------------------------------------------------------------------

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

AIM Portfolio BlackRock Portfolio
- --------------------------------------------------- --------------------------------- ---------------------------------
- --------------------------------------------------- ---------------- ---------------- --------------- -----------------

Class A Class E Class A Class E
------- ------- ------- -------
- --------------------------------------------------- ---------------- ---------------- --------------- -----------------
- --------------------------------------------------- ---------------- ---------------- --------------- -----------------
Management Fees (1) 0.78% 0.78% 0.73% 0.73%
- --------------------------------------------------- ---------------- ---------------- --------------- -----------------
- --------------------------------------------------- ---------------- ---------------- --------------- -----------------
Distribution and 12b-1 Fees 0.0 % 0.15 % 0.0 % 0.15 %
- --------------------------------------------------- ---------------- ---------------- --------------- -----------------
- --------------------------------------------------- ---------------- ---------------- --------------- -----------------
Other Expenses (2) 0.09% 0.09% 0.05% 0.05%
- --------------------------------------------------- ---------------- ---------------- --------------- -----------------
- --------------------------------------------------- ---------------- ---------------- --------------- -----------------
Total Annual Portfolio Operating Expenses (2) 0.87% 1.02% 0.78% 0.93%
- --------------------------------------------------- ---------------- ---------------- --------------- -----------------

- ------------------------------------------------------------------------------------------------------------------------
BlackRock Portfolio (ProForma)
- ------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------- -------------------------------- ----------------------------------

Class A Class E
- ---------------------------------------------------- -------------------------------- ----------------------------------
- ---------------------------------------------------- -------------------------------- ----------------------------------
Management Fees 0.73% 0.73%
- ---------------------------------------------------- -------------------------------- ----------------------------------
- ---------------------------------------------------- -------------------------------- ----------------------------------
Distribution and 12b-1 Fees 0.0 % 0.15 %
- ---------------------------------------------------- -------------------------------- ----------------------------------
- ---------------------------------------------------- -------------------------------- ----------------------------------
Other Expenses 0.05% 0.05%
- ---------------------------------------------------- -------------------------------- ----------------------------------
- ---------------------------------------------------- -------------------------------- ----------------------------------
Total Annual Portfolio Operating Expenses 0.78% 0.93%
- ---------------------------------------------------- -------------------------------- ----------------------------------

(1) Met Investors Advisory, LLC, Adviser to the AIM Portfolio, has agreed
that any advisory fee waivers received from the AIM Portfolio's
subadviser commencing May 1, 2006 will be passed on the AIM Portfolio
in the form of a voluntary fee waiver. For purposes of calculating the
subadviser's fee, the assets of the AIM Portfolio and the assets of
the Met/AIM Small Cap Growth Portfolio of the Trust are aggregated.
Including the voluntary fee waiver, the management fee for the year
ended December 31, 2008 was 0.76%.

(2) Each of the AIM Portfolio and the BlackRock Portfolio placed certain
portfolio trades with brokers that paid a portion of the Portfolio's
expenses. The expense information for each Portfolio does not reflect
this reduction in expenses. If this reduction were shown, the
BlackRock Portfolio's total operating expenses would have been 0.76%
for Class A shares and 0.91% for Class E shares and the AIM
Portfolio's total operating expenses would have been 0.85% for Class A
shares and 1.00% for Class E shares.

The tables below show examples of the total expenses you would pay on a
$10,000 investment over one-, three-, five- and ten-year periods. The examples
are intended to help you compare the cost of investing in the AIM Portfolio
versus the BlackRock Portfolio and the BlackRock Portfolio (Pro Forma), assuming
the Reorganization takes place. The examples assume a 5% average annual return,
that you redeem all of your shares at the end of each time period and that you
reinvest all of your dividends. The following tables also assume that total
annual operating expenses remain the same. The examples are for illustration
only, and your actual costs may be higher or lower.

THE EXAMPLES DO NOT REFLECT THE FEES, EXPENSES OR WITHDRAWAL CHARGES
IMPOSED BY THE CONTRACTS FOR WHICH THE PORTFOLIOS SERVE AS INVESTMENT VEHICLES.
IF THOSE FEES AND EXPENSES HAD BEEN INCLUDED, YOUR COSTS WOULD BE HIGHER.

Examples of Portfolio Expenses

- ------------------------- --------------------------------------------------------------------------------------------
AIM Portfolio
- ------------------------- --------------------------------------------------------------------------------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

One Year Three Years Five Years Ten Years
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class A $89 $278 $482 $1,073
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class E $104 $325 $563 $1,248
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- --------------------------------------------------------------------------------------------
BlackRock Portfolio
- ------------------------- --------------------------------------------------------------------------------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

One Year Three Years Five Years Ten Years
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class A $80 $249 $433 $966
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class E $95 $296 $515 $1,143
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- --------------------------------------------------------------------------------------------
BlackRock Portfolio (Pro Forma)
- ------------------------- --------------------------------------------------------------------------------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

One Year Three Years Five Years Ten Years
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class A $80 $249 $433 $966
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class E $95 $296 $515 $1,143
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

How do the Portfolios' performance records compare?

The following charts show how Class A shares of the AIM Portfolio and the
BlackRock Portfolio have performed for the last ten calendar years. Past
performance is not an indication of future results.

PAST PERFORMANCE DOES NOT REFLECT THE FEES, EXPENSES OR WITHDRAWAL CHARGES
IMPOSED BY THE CONTRACTS FOR WHICH THE PORTFOLIOS SERVE AS INVESTMENT VEHICLES.
IF THOSE FEES AND EXPENSES HAD BEEN INCLUDED, PERFORMANCE WOULD BE LOWER.

Year-by-Year Total Return (%)

These charts should give you a general idea of the risks of investing in
the AIM Portfolio and the BlackRock Portfolio by showing how their returns have
varied from year-to-year. These charts include the effects of Portfolio
expenses. The historical performance shown for the AIM Portfolio's Class A
shares prior to May 1, 2006 is the performance of its predecessor funds managed
by the subadviser using the same investment objective and investment strategies
as the AIM Portfolio. On July 1, 2005 substantially all of the assets of the AIM
Capital Appreciation Portfolio of Travelers Series Fund, Inc. were transferred
to the AIM Capital Appreciation Portfolio, a series of the Travelers Series
Trust. The assets of the AIM Capital Appreciation Portfolio of the Travelers
Series Trust were transferred to the AIM Portfolio on May 1, 2006. On May 1,
2004, the BlackRock Portfolio changed its subadviser from Fred Alger Management,
Inc. ("Alger") to State Street Research & Management Company ("State Street
Research") and also changed its investment objective and principal investment
strategies. On January 31, 2005, BlackRock Advisors LLC ("BlackRock") succeeded
State Street Research as subadviser to the BlackRock Portfolio. The performance
information shown for the BlackRock Portfolio reflects the management of Alger,
State Street and BlackRock. The AIM Portfolio and the BlackRock Portfolio can
also experience short-term performance swings as indicated in the high and low
quarter information at the bottom of each chart.

AIM Portfolio

- ------------- ---------- ----------- ----------- --------- ---------- --------- ---------- --------- -----------
32.81% -17.24% -23.76% -23.87% 29.31% 3.58% 8.73% 6.88% 11.92% -42.64%

99 00 01 02 03 04 05 06 07 08
- ------------- ---------- ----------- ----------- --------- ---------- --------- ---------- --------- -----------

High Quarter: 4th Quarter 1999 +35.92%
Low Quarter: 3rd Quarter 2001 -23.09%

BlackRock Portfolio

- ------------- ---------- ----------- ---------- ----------- ---------- --------- ---------- --------- ----------
34.1% -13.7% -12.0% -33.2% 35.2% 8.8% 7.0% 4.1% 18.7% -36.5%

99 00 01 02 03 04 05 06 07 08
- ------------- ---------- ----------- ---------- ----------- ---------- --------- ---------- --------- ----------

High Quarter: 4th Quarter 1999 +21.56%
Low Quarter: 4th Quarter 2008 -23.07%

The next set of tables lists the average annual total return of the Class A
shares of the AIM Portfolio and the BlackRock Portfolio for the past one-, five-
and ten-year periods (through December 31, 2008); the average annual to the
return of the Class E shares of the BlackRock Portfolio for the past one and
five-year periods and since inception (through December 31, 2008); and the
average total return of the Class E shares of the AIM Portfolio for the period
since inception (through December 31, 2008). These tables include the effects of
portfolio expenses and are intended to provide you with some indication of the
risks of investing in each Portfolio by comparing its performance with an
appropriate widely recognized index of securities, a description of which can be
found following the table. An index does not include transaction costs
associated with buying and selling securities or any mutual fund expenses. It is
not possible to invest directly in an index.

Average Annual Total Return (for the period ended 12/31/08)

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

AIM Portfolio 1 Year 5 Years 10 Years Since Inception
Inception Date
- ------------------------------------- ------------- ----------------- ---------------- --------------- -----------------
- ------------------------------------- ------------- ----------------- ---------------- --------------- -----------------
Class A - 42.64% - 4.50% - 2.66% - -
- ------------------------------------- ------------- ----------------- ---------------- --------------- -----------------
- ------------------------------------- ------------- ----------------- ---------------- --------------- -----------------
Class E - - - -26.44% 4-28-07
- ------------------------------------- ------------- ----------------- ---------------- --------------- -----------------
- ------------------------------------- ------------- ----------------- ---------------- --------------- -----------------
S&P 500 Index - 37.00% - 2.19% - 1.38% -24.04% -
- ------------------------------------- ------------- ----------------- ---------------- --------------- -----------------

- ----------------------------------- -------------- ----------------- ---------------- ---------------- -----------------
BlackRock Portfolio 1 Year 5 Years 10 Years Since Inception
Inception Date
- ----------------------------------- -------------- ----------------- ---------------- ---------------- -----------------
- ----------------------------------- -------------- ----------------- ---------------- ---------------- -----------------
Class A - 36.51% - 1.78% - 1.72% - -
- ----------------------------------- -------------- ----------------- ---------------- ---------------- -----------------
- ----------------------------------- -------------- ----------------- ---------------- ---------------- -----------------
Class E - 36.63% - 1.94% - - 4.24% 5-1-01
- ----------------------------------- -------------- ----------------- ---------------- ---------------- -----------------
- ----------------------------------- -------------- ----------------- ---------------- ---------------- -----------------
S&P 500 Index - 37.00% - 2.19% - 1.38% - 2.36% -
- ----------------------------------- -------------- ----------------- ---------------- ---------------- -----------------
- ----------------------------------- -------------- ----------------- ---------------- ---------------- -----------------
Russell 1000 Growth Index - 38.44% - 3.42% - 4.27% - 4.51% -
- ----------------------------------- -------------- ----------------- ---------------- ---------------- -----------------

The S&P 500 Index is a widely recognized unmanaged index that measures the
stock performance of 500 large- and medium-sized companies and is often used to
indicate the performance of the overall stock market. The Russell 1000 Growth
Index is a widely recognized unmanaged index that measures the stock performance
of growth companies in the Russell 1000 Index, which is composed of the 1,000
largest U.S. companies based on total market capitalization.

For a detailed discussion of the manner of calculating total return, please
see each Portfolio's Statement of Additional Information. Generally, the
calculations of total return assume the reinvestment of all dividends and
capital gain distributions on the reinvestment date and the deduction of all
recurring expenses that were charged to shareholders' accounts.

Important information about the BlackRock Portfolio is also contained in
management's discussion of the BlackRock Portfolio's performance which appears
in the most recent Annual Report of the BlackRock Portfolio.

Who will be the Adviser, Subadviser and Portfolio Manager of my Portfolio
after the Reorganization? What will the advisory and subadvisory fees be
after the Reorganization?

Management of the Portfolios

The overall management of the AIM Portfolio and the BlackRock Portfolio is
the responsibility of, and is supervised by, the Board of Trustees of the Trust
and the Board of Directors of the Fund, respectively.

Adviser

MetLife Advisers, LLC (the "Adviser") is the investment adviser for the
BlackRock Portfolio. The Adviser selects and pays the fees of the BlackRock
Portfolio's subadviser and monitors the subadviser's investment program.

Facts about the Adviser:

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

o The Adviser is an affiliate of MetLife.

o The Adviser manages a family of investment portfolios sold to
separate accounts of MetLife and its affiliates to fund variable
life insurance contracts and variable annuity certificates and
contracts, with assets of approximately $26.7 billion as of
December 31, 2008.

o The Adviser is located at 501 Boylston Street, Boston,
Massachusetts 02116.

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

Subadviser

BlackRock Advisors, LLC ("BlackRock" or the "Subadviser") is the
subadviser to BlackRock Portfolio. Pursuant to a Subadvisory Agreement
with the Adviser, the Subadviser continuously furnishes an investment
program for the BlackRock Portfolio, makes day-to-day investment
decisions on behalf of the Portfolio, and arranges for the execution
of portfolio transactions.

Facts about the Subadviser:

---------------------------------------------------------------------
o BlackRock is a wholly-owned subsidiary of BlackRock, Inc., which
is an affiliate of The PNC Financial Services Group, Inc. and
Merrill Lynch & Co.

o BlackRock and its global affiliates provide investment management
services to client discretionary accounts with assets totaling
approximately $1.31 trillion as of December 31, 2008.

o The Subadviser is located at 40 East 52nd Street, New York, New
York 10022.
----------------------------------------------------------------------

Portfolio Management

The portfolio managers who are jointly and primarily responsible for the
day-to-day management of the BlackRock Portfolio are Jeffrey R. Lindsey and
Edward P. Dowd. Messrs. Lindsey and Dowd led BlackRock's Fundamental Large Cap
Growth Team consisting of five investment professionals. Messrs. Lindsey and
Dowd joined BlackRock in 2005 following a merger between BlackRock and State
Street Research, the Portfolio's former subadviser.

o Mr. Lindsey joined State Street Research in 2002. From 2003 until
he joined BlackRock, Mr. Lindsey was a Managing Director and the
Chief Investment Officer-Growth at State Street Research,
responsible for overseeing all of State Street Research's growth
and core products.

o Prior to joining BlackRock, Mr. Dowd was a Vice President at
State Street Research, which he joined in 2002.

Advisory Fees

For its management and supervision of the daily business affairs of the
BlackRock Portfolio, the Adviser is entitled to receive a monthly fee at an
annual rate of a percentage of the average daily net assets of the Portfolio as
follows: 0.73% for the first $1 billion of the Portfolio's average daily net
assets and 0.65% for amounts over $1 billion.

Subadvisory Fees

Under the terms of the Subadvisory Agreement, the Subadviser is paid by the
Adviser for providing subadvisory services to the BlackRock Portfolio. The
BlackRock Portfolio does not pay a fee to the Subadviser.

What will be the primary federal tax consequences of the Reorganization?

Prior to and as a condition to the closing of the Reorganization, the AIM
Portfolio and the BlackRock Portfolio will have received an opinion from the law
firm of Sullivan & Worcester LLP that, while the matter is not entirely free
from doubt: (i) no gain or loss will be recognized by the AIM Portfolio or the
separate accounts through which the Insurance Company owns its shares ("Record
Holders") for federal income tax purposes as a result of receiving shares of the
BlackRock Portfolio in connection with the Reorganization; (ii) the holding
period and aggregate tax basis of the shares of the BlackRock Portfolio that are
received by the Record Holders of the AIM Portfolio will be the same as the
holding period and aggregate tax basis of the shares of the AIM Portfolio
previously held by such Record Holders, provided that such shares of the AIM
Portfolio are held as capital assets; (iii) the holding period and tax basis of
the assets of the AIM Portfolio in the hands of the BlackRock Portfolio as a
result of the Reorganization will be the same as in the hands of the AIM
Portfolio immediately prior to the Reorganization; and (iv) no gain or loss will
be recognized by the BlackRock Portfolio upon the receipt of the assets of the
AIM Portfolio in exchange for shares of the BlackRock Portfolio and the
assumption by the BlackRock Portfolio of the AIM Portfolio's liabilities.

RISKS

Are the risk factors for the Portfolios similar?

Yes. The risk factors are similar due to the similar investment objectives
and similar principal investment strategies of the AIM Portfolio and the
BlackRock Portfolio. The risks of the BlackRock Portfolio are described in
greater detail in the Portfolio's Prospectus.

What are the primary risks of investing in each Portfolio?

An investment in each Portfolio is subject to certain risks. There is no
assurance that investment performance of either Portfolio will be positive or
that the Portfolios will meet their investment objectives. The following tables
and discussions highlight the primary risks associated with an investment in
each of the Portfolios.

- ---------------------------------------- ------------------------------------------------------------------------
Each of the Portfolios is subject to Market Risk.

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

A Portfolio's share price can fall because of weakness in the broad market,
a particular industry, or specific holdings. The market as a whole can decline
for many reasons, including disappointing corporate earnings, adverse political
or economic developments here or abroad, changes in investor psychology, or
heavy institutional selling. The prospects for an industry or a company may
deteriorate. In addition, an assessment by a Portfolio's subadviser of
particular companies may prove incorrect, resulting in losses or poor
performance by those holdings, even in a rising market. A Portfolio could also
miss attractive investment opportunities if its subadviser underweights markets
or industries where there are significant returns, and could lose value if the
subadviser overweights markets or industries where there are significant
declines.

Stocks purchased in initial public offerings (IPOs) have a tendency to
fluctuate in value significantly shortly after the IPO relative to the price at
which they were purchased. These fluctuations could impact the net asset value
and return earned on a Portfolio's shares.

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

Each of the Portfolios is subject to Market Capitalization Risk.

Stocks fall into three broad market capitalization categories--large,
medium and small. Investing primarily in one category carries the risk that due
to current market conditions that category may be out of favor. Investing in
medium and small capitalization companies may be subject to special risks
associated with narrower product lines, more limited financial resources,
smaller management groups, and a more limited trading market for their stocks as
compared with larger companies. Securities of smaller capitalization issuers may
therefore be subject to greater price volatility and may decline more
significantly in market downturns than securities of larger companies. In some
cases, these companies may be relatively new issuers (i.e., those having
continuous operating histories of less than three years) which carries other
risks in addition to the risks of other medium and small capitalization
companies. New issuers may be more speculative because such companies are
relatively unseasoned. These companies will often be involved in the development
or marketing of a new product with no established market, which could lead to
significant losses.

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

Each of the Portfolios is subject to Investment Style Risk.

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

Different investment styles tend to shift in and out of favor depending
upon market and economic conditions as well as investor sentiment. A Portfolio
may outperform or underperform other funds that employ a different investment
style. A Portfolio may also employ a combination of styles that impact its risk
characteristics. Examples of different investment styles include growth and
value investing. Growth stocks may be more volatile than other stocks because
they are more sensitive to investor perceptions of the issuing company's growth
of earnings potential. Also, since growth companies usually invest a high
portion of earnings in their business, growth stocks may lack the dividends of
value stocks that can cushion stock prices in a falling market. Growth oriented
funds will typically underperform when value investing is in favor. Value stocks
are those which are undervalued in comparison to their peers due to adverse
business developments or other factors. Value investing carries the risk that
the market will not recognize a security's inherent value for a long time, or
that a stock judged to be undervalued may actually be appropriately priced or
overvalued. Value oriented funds will typically underperform when growth
investing is in favor.

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

Each of the Portfolios may be subject to Foreign Investment Risk.

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

Investments in foreign securities involve risks relating to political,
social and economic developments abroad, as well as risks resulting from the
differences between the regulations to which U.S. and foreign issuers and
markets are subject:

o These risks may include the seizure by the government of company assets,
excessive taxation, withholding taxes on dividends and interest,
limitations on the use or transfer of portfolio assets, and political or
social instability.

o Enforcing legal rights may be difficult, costly and slow in foreign
countries, and there may be special problems enforcing claims against
foreign governments.

o Foreign companies may not be subject to accounting standards or
governmental supervision comparable to U.S. companies, and there may be
less public information about their operations.

o Foreign markets may be less liquid and more volatile than U.S. markets.

o Foreign securities often trade in currencies other than the U.S. dollar,
and a Portfolio may directly hold foreign currencies and purchase and sell
foreign currencies. Changes in currency exchange rates will affect a
Portfolio's net asset value, the value of dividends and interest earned,
and gains and losses realized on the sale of foreign securities. An
increase in the strength of the U.S. dollar relative to these other
currencies may cause the value of a Portfolio to decline. Certain foreign
currencies may be particularly volatile, and foreign governments may
intervene in the currency markets, causing a decline in value or liquidity
of a Portfolio's foreign currency or securities holdings.

o Costs of buying, selling and holding foreign securities, including
brokerage, tax and custody costs, may be higher than those involved in
domestic transactions.

In addition, investments in emerging markets include all of the risks of
investments in foreign securities and are subject to severe price declines. The
economic and political structures of developing nations, in most cases, do not
compare favorably with the U.S. or other developed countries in terms of wealth
and stability, and their financial markets often lack liquidity. Such countries
may have relatively unstable governments, immature economic structures, national
policies restricting investments by foreigners and economies based on only a few
industries. For these reasons, all of the risks of investing in foreign
securities are heightened by investing in emerging market countries. The markets
of developing countries have been more volatile than the markets of developed
countries with more mature economies. These markets often have provided
significantly higher or lower rates of return than developed markets, and
significantly greater risks, to investors.

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

Each of the Portfolios may be subject to Derivatives Risk.

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

A Portfolio's investments in derivatives can significantly increase the
Portfolio's exposure to market risk or credit risk of the counterparty.
Derivatives also involve the risk of mispricing or improper valuation and the
risk that changes in the value of the derivative may not correlate perfectly
with the relevant assets, rates and indices.

INFORMATION ABOUT THE REORGANIZATION

Reasons for the Reorganization

At a meeting held on January 27, 2009, all of the Trustees of the Trust,
including the Disinterested Trustees, considered and approved the
Reorganization; they determined that the Reorganization was in the best
interests of the AIM Portfolio and its shareholders, and that the interests of
existing shareholders of the AIM Portfolio will not be diluted as a result of
the transactions contemplated by the Reorganization.

Before approving the Plan, the Trustees evaluated extensive information
provided by the management of the Trust and reviewed various factors about the
Portfolios and the proposed Reorganization. The Trustees noted that the advisory
fee and total operating expenses of the BlackRock Portfolio after the
Reorganization were expected to be lower than those of the AIM Portfolio. The
Trustees noted that the historical performance of the BlackRock Portfolio over
the one-, three-, five-, and ten-year periods ended December 31, 2008 had
exceeded that of the AIM Portfolio.

The Trustees considered the potential economies of scale that might be
achieved upon the reorganization of the AIM Portfolio into the BlackRock
Portfolio because the BlackRock Portfolio will have a greater level of assets.
As of December 31, 2008, the AIM Portfolio's total net assets were approximately
$ 108.3 million while the BlackRock Portfolio's total net assets were
approximately $303.5 million. The Trustees noted that the AIM Portfolio was
unlikely to garner sufficient assets that would allow it to achieve economies of
scale.

In addition, the Trustees considered, among other things:

o the terms and conditions of the Reorganization;

o the fact that the Reorganization would not result in the dilution of
shareholders' interests;

o the effect of the Reorganization on the Contract Owners and the value
of their Contracts;

o the fact that the AIM Portfolio and the BlackRock Portfolio have
substantially similar investment objectives and similar principal
investment strategies;

o the fact that the BlackRock Portfolio will assume all of the
liabilities of the AIM Portfolio;

o the benefits to shareholders, including operating efficiencies, which
may be achieved from participating in the restructuring of the
investment portfolios to be offered in connection with the Insurance
Company's annuity products and to employee benefit plans;

o the fact that the AIM Portfolio will pay the costs of the Meeting,
this proxy solicitation and any adjourned session and these costs are
less than the expected savings to that Portfolio's shareholders due to
the operational efficiencies as a result of the Reorganization;

o the fact that the Reorganization is expected to be a tax-free
transaction for federal income tax purposes; and

o alternatives available to shareholders of the AIM Portfolio, including
the ability to exchange their shares for shares of other funds that
are offered as investment options under their insurance or annuity
contracts.

During their consideration of the Reorganization, the Disinterested
Trustees of the Trust met separately with counsel to the Disinterested Trustees
regarding the legal issues involved.

After consideration of the factors noted above, together with other factors
and information considered to be relevant, and recognizing that there can be no
assurance that any benefits will in fact be realized, the Trustees of the Trust
concluded that the proposed Reorganization would be in the best interests of the
AIM Portfolio and its shareholders. Consequently, they approved the Plan and
directed that the Plan be submitted to shareholders of the AIM Portfolio for
approval.

The Directors of the Fund have approved the Plan on behalf of the BlackRock
Portfolio and its shareholders.

Agreement and Plan of Reorganization

The following summary is qualified in its entirety by reference to the Plan
(the form of which is attached as Exhibit A to this Prospectus/Proxy Statement).

The Plan provides that all of the assets of the AIM Portfolio will be
acquired by the BlackRock Portfolio in exchange for shares of the BlackRock
Portfolio and the assumption by the BlackRock Portfolio of all of the
liabilities of the AIM Portfolio on or about May 1, 2009, or such other date as
may be agreed upon by the parties (the "Closing Date"). The AIM Portfolio will
prepare an unaudited statement of its assets and liabilities as of the close of
regular trading on the New York Stock Exchange ("NYSE"), normally 4:00 p.m.
Eastern time, on the business day immediately prior to the Closing Date (the
"Valuation Date").

Prior to the Closing Date, the AIM Portfolio will declare a dividend or
dividends which, together with all previous dividends, shall have the effect of
distributing to the Portfolio's Record Holders all of the Portfolio's investment
company taxable income for its taxable years ending on or after December 31,
2008 and on or prior to the Closing Date (computed without regard to any
deduction for dividends paid), and all of the Portfolio's net capital gains
realized in each of its taxable years ending on or after December 31, 2008 and
on or prior to the Closing Date.

The number of full and fractional shares of each class of shares of the
BlackRock Portfolio to be received by the Record Holders of the AIM Portfolio
will be determined by multiplying the number of outstanding shares of each class
of shares of the AIM Portfolio by a factor which shall be computed by dividing
the net asset value per share of the respective shares of AIM Portfolio by the
net asset value per share of the respective class of shares of the BlackRock
Portfolio. These computations will take place as of the Valuation Date. The net
asset value per share of each class will be determined by dividing assets, less
liabilities, in each case attributable to the respective class, by the total
number of outstanding shares.

State Street Bank and Trust Company, the custodian for both Portfolios,
will compute the value of each Portfolio's respective portfolio of securities.
The method of valuation employed will be consistent with the procedures set
forth in the Prospectus and Statement of Additional Information of the Fund,
Rule 22c-1 under the 1940 Act, and with the interpretations of that Rule by the
SEC's Division of Investment Management.

As soon after the Closing Date as is conveniently practicable, the AIM
Portfolio will liquidate and distribute pro rata to the Record Holders as of the
close of business on the Closing Date the full and fractional shares of the
BlackRock Portfolio received by the AIM Portfolio. The liquidation and
distribution will be accomplished by the establishment of accounts in the names
of the AIM Portfolio's Record Holders on the BlackRock Portfolio's share records
of its transfer agent. Each account will represent the respective pro rata
number of full and fractional shares of the BlackRock Portfolio due to the AIM
Portfolio's Record Holders. All issued and outstanding shares of the AIM
Portfolio will be canceled. The shares of the BlackRock Portfolio to be issued
will have no preemptive or conversion rights and no share certificates will be
issued. After these distributions and the winding up of its affairs, the AIM
Portfolio will be terminated as a series of the Trust.

The consummation of the Reorganization is subject to the conditions set
forth in the Plan, including approval, as applicable, by the AIM Portfolio's
shareholders, accuracy of various representations and warranties and receipt of
opinions of counsel. Notwithstanding approval of the AIM Portfolio's
shareholders, the Plan may be terminated (a) by the mutual agreement of the AIM
Portfolio and the BlackRock Portfolio; or (b) at or prior to the Closing Date by
either party (1) because of a material breach by the other party of any
representation, warranty, covenant or agreement contained in the Plan to be
performed by the other party at or prior to the Closing Date; (2) if a condition
to the obligation of the terminating party has not been met and it reasonably
appears that it will not or cannot be met; or (3) if the Board of Directors of
the Fund or the Board of Trustees of the Trust determines that the termination
of the Plan is in the best interests of the applicable Portfolio's shareholders.
In addition, the Plan will automatically terminate on December 31, 2009 if the
transactions contemplated in the Plan have not been substantially completed by
that date, unless a later date is agreed to by both the Trust and the Fund.

If the Reorganization is not consummated, no portion of the expenses will
be borne directly or indirectly by the AIM Portfolio, the BlackRock Portfolio or
their respective shareholders. MetLife or one of its affiliates will pay such
expenses.

If the AIM Portfolio's shareholders do not approve the Reorganization, the
Trustees will consider other possible courses of action in the best interests of
shareholders.

Federal Income Tax Consequences

The Reorganization is intended to qualify for federal income tax purposes
as a tax-free reorganization under section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"). As a condition to the closing of the
Reorganization, the AIM Portfolio and the BlackRock Portfolio will receive an
opinion from the law firm of Sullivan & Worcester LLP to the effect that, on the
basis of the existing provisions of the Code, U.S. Treasury regulations issued
thereunder, current administrative rules, pronouncements and court decisions,
and certain representations made by the Portfolios, for federal income tax
purposes, upon consummation of the Reorganization, and while the matter is not
entirely free from doubt:

(1) The transfer of all of the assets of the AIM Portfolio solely in
exchange for shares of the BlackRock Portfolio and the assumption by
the BlackRock Portfolio of the liabilities of the AIM Portfolio
followed by the distribution of the BlackRock Portfolio's shares to
the Record Holders of the AIM Portfolio in dissolution and liquidation
of the AIM Portfolio, will constitute a "reorganization" within the
meaning of section 368(a) of the Code, and the AIM Portfolio and the
BlackRock Portfolio will each be a "party to a reorganization" within
the meaning of section 368(b) of the Code;

(2) No gain or loss will be recognized by the BlackRock Portfolio upon the
receipt of the assets of the AIM Portfolio solely in exchange for the
shares of the BlackRock Portfolio and the assumption by the BlackRock
Portfolio of the liabilities of the AIM Portfolio;

(3) No gain or loss will be recognized by the AIM Portfolio on the
transfer of its assets to the BlackRock Portfolio in exchange for the
BlackRock Portfolio's shares and the assumption by the BlackRock
Portfolio of the liabilities of the AIM Portfolio or upon the
distribution (whether actual or constructive) of the BlackRock
Portfolio's shares to the AIM Portfolio's Record Holders in exchange
for their shares of the AIM Portfolio;

(4) No gain or loss will be recognized by the AIM Portfolio's Record
Holders upon the exchange of their shares of the AIM Portfolio for
shares of the BlackRock Portfolio in liquidation of the AIM Portfolio;

(5) The aggregate tax basis of the shares of the BlackRock Portfolio
received by each Record Holder of the AIM Portfolio pursuant to the
Reorganization will be the same as the aggregate tax basis of the
shares of the AIM Portfolio held by such Record Holder immediately
prior to the Reorganization, and the holding period of the shares of
the BlackRock Portfolio received by each Record Holder of the AIM
Portfolio will include the period during which the shares of the AIM
Portfolio exchanged therefor were held (provided that the shares of
the AIM Portfolio were held as a capital asset on the date of the
Reorganization);

(6) The tax basis of the assets of the AIM Portfolio acquired by the
BlackRock Portfolio will be the same as the tax basis of such assets
to the AIM Portfolio immediately prior to the Reorganization, and the
holding period of such assets in the hands of the BlackRock Portfolio
will include the period during which the assets were held by the AIM
Portfolio; and

(7) The BlackRock Portfolio will succeed to and take into account the
capital loss carryovers, if any, of the AIM Portfolio described in
Section 381(c) of the Code. The BlackRock Portfolio will take any
capital loss carryovers into account subject to the conditions and
limitations specified in Sections 381, 382, 383 and 384 of the Code
and the regulations thereunder.

Opinions of counsel are not binding upon the Internal Revenue Service or
the courts. If the Reorganization is consummated but does not qualify as a
tax-free reorganization under the Code, each Record Holder of the AIM Portfolio
would recognize a taxable gain or loss equal to the difference between its tax
basis in its AIM Portfolio shares and the fair market value of the shares of the
BlackRock Portfolio it received. However, assuming each Contract that holds
interests in a Record Holder is treated as a variable annuity for federal income
tax purposes, each Contract holder would not recognize taxable income in that
event.

The BlackRock Portfolio's utilization after the Reorganization of any
pre-Reorganization realized or built-in losses of the AIM Portfolio to offset
gains realized by the BlackRock Portfolio could be subject to limitation in
future years.

Pro Forma Capitalization

The following table sets forth the capitalization of the AIM Portfolio and
the BlackRock Portfolio as of December 31, 2008 and the capitalization of the
BlackRock Portfolio on a pro forma basis as of that date, giving effect to the
proposed acquisition of assets at net asset value. The pro forma data reflects
an exchange ratio of approximately 0.40 Class A and 0.40 Class E shares of the
BlackRock Portfolio for each Class A and Class E share of the AIM Portfolio.

Capitalization of AIM Portfolio, BlackRock Portfolio and BlackRock Portfolio Pro Forma*
----------------------- --------------------- ----------------------- --------------------- ------------------------------

BlackRock Portfolio
BlackRock Portfolio Pro Forma (After
---------
AIM Portfolio Adjustments Reorganization)
------------- ----------- ---------------
----------------------- --------------------- ----------------------- --------------------- ------------------------------
Net Assets
Class A $97,722,871 $209,248,010 ($87,979)* $306,882,902
Class B - $63,611,194 ($18,231)* $ 63,592,963
Class E $10,534,843 $30,601,755 ($11,790)* $ 41,124,808
----------------------- --------------------- ----------------------- --------------------- ------------------------------
----------------------- --------------------- ----------------------- --------------------- ------------------------------
Total Net Assets $108,257,714 $303,460,959 ($118,000)* $411,600,673
----------------------- --------------------- ----------------------- --------------------- ------------------------------
Net Asset Value Per
Share
Class A $6.81 $16.91 $16.90
Class B - $16.61 $16.61
Class E $6.70 $16.75 $16.75
--------------------- ------------------------------
----------------------- --------------------- ----------------------- --------------------- ------------------------------
Shares
Outstanding
Class A 14,347.221 12,375,701 (8,567,529)** 18,155,393
Class B - 3,828,265 - 3,829,265
Class E 1,572,132 1,826,571 ( 943,324)** 2,455,379
----------------------- --------------------- ----------------------- --------------------- ------------------------------
----------------------- --------------------- ----------------------- --------------------- ------------------------------
Total Shares 15,919,353 18,030,537 (9,510,853)** 24,440,037
Outstanding
----------------------- --------------------- ----------------------- --------------------- ------------------------------

* Reflects merger related expenses of $118,000.

** Reflects change in shares outstanding due to issuance of Class A and
Class E shares of the BlackRock Portfolio in exchange for Class A and
Class E shares of the AIM Portfolio based upon the net asset value of
BlackRock Portfolio's Class A and Class E shares at December 31, 2008.

The table set forth above should not be relied upon to reflect the number
of shares to be received in the Reorganization; the actual number of shares to
be received will depend upon the net asset value and number of shares
outstanding of each Portfolio at the time of the Reorganization.

Distribution of Shares

All portfolios of the Fund mainly sell shares to the separate accounts of
the Insurance Company as a funding vehicle for the Contracts offered by the
Insurance Company. Expenses of the BlackRock Portfolio are passed through to the
Insurance Company's separate accounts and are ultimately borne by Contract
Owners. In addition, other fees and expenses are assessed by the Insurance
Company at the separate account level. (The Contract Prospectus describes all
fees and charges relating to a Contract.) The BlackRock Portfolio may also offer
shares to other separate accounts of other insurers if approved by the Board of
Directors of the Fund.

MetLife Investors Distribution Company ("MID"), an affiliate of MetLife,
serves as the distributor for the Fund's shares. Under a distribution agreement
with the Fund, MID serves as the general distributor of shares of each class of
the Fund's portfolios, including the BlackRock Portfolio, which are sold at net
asset value of such class without any sales charges. The offering of the
BlackRock Portfolio's shares is continuous. Shares are offered only to certain
insurance company separate accounts and qualified plans. The distribution
agreement does not obligate MID to sell a specific number of shares.

The AIM Portfolio currently offers Class A and Class E shares. The
BlackRock Portfolio currently offers Class A, Class B and Class E shares. Each
Class bears its own distribution expenses, if any.

In the proposed Reorganization, shareholders of the AIM Portfolio owning
Class A shares will receive Class A shares of the BlackRock Portfolio. Class A
shares of each Portfolio are sold at net asset value without any initial or
deferred sales charges and are not subject to distribution-related or
shareholder servicing-related fees.

In the proposed reorganization, shareholders of the AIM Portfolio owning
Class E shares will receive Class E shares of the BlackRock Portfolio. Class E
shares of each Portfolio are sold at net asset value without any initial or
deferred sales charges. A Rule 12b-1 Plan has been adopted for Class E shares of
the BlackRock Portfolio under which the Portfolio may pay for
distribution-related expenses at an annual rate of 0.15% of average daily net
assets attributable to Class E shares.

In connection with the Reorganization, no sales charges are imposed.
Certain sales or other charges are imposed by the Contracts for which the
BlackRock Portfolio serves as an investment vehicle. More detailed descriptions
of the Class A and Class E shares and the distribution arrangement applicable to
each class of shares are contained in the Prospectus and Statement of Additional
Information relating to the BlackRock Portfolio.

Purchase and Redemption Procedures

The Prospectus for your Contract describes the procedures for investing
your purchase payments or premiums in shares of each Portfolio. No fee is
charged by either Portfolio for selling (redeeming) shares. The Contract
Prospectus describes whether the Insurance Company charges any fees for
redeeming your interest in a Contract. Each Portfolio buys or sells shares at
net asset value per share of the Portfolio for orders received on a given day,
and the Insurance Company uses this value to calculate the value of your
interest in your Contract.

MID and its affiliates place orders for the purchase or redemption of
shares of each Portfolio based on, among other things, the amount of net
Contract premiums or purchase payments transferred to the separate accounts,
transfers to or from a separate account investment division and benefit payments
to be effected on a given date pursuant to the terms of the Contracts. Orders
are effected at the net asset value per share for the Portfolio determined on
that same date, without the imposition of any sales commission or redemption
charge. The Insurance Company uses this net asset value to calculate the value
of your interest in your Contract.

Exchange Privileges

The Contract Prospectus indicates whether the Insurance Company charges any
fees for moving your assets from one investment option to another. No fees for
exchanges are charged by the Trust or the Fund.

Dividend Policy

Each Portfolio has the same distribution policy. Each Portfolio declares
and distributes its dividends from net investment income, including any
short-term capital gains, to the Insurance Company separate accounts at least
once a year and not to you, the Contract Owner. These distributions are in the
form of additional shares of stock and not cash. The result is that a
Portfolio's investment performance, including the effect of dividends, is
reflected in the cash value of the Contracts. All net realized long- or
short-term capital gains of each Portfolio are also declared and distributed
once a year and reinvested in the Portfolio.

Each Portfolio has qualified, and the BlackRock Portfolio intends to
continue to qualify, to be treated as a regulated investment company under the
Code. To remain qualified as a regulated investment company, a Portfolio must
distribute 90% of its taxable and tax-exempt income and diversify its holdings
as required by the 1940 Act and the Code. While so qualified, so long as each
Portfolio distributes all of its net investment company taxable and tax-exempt
income and any net realized gains to its shareholders of record, it is expected
that a Portfolio will not be required to pay any federal income taxes on the
amounts distributed to its shareholders of record.

COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS

The operations of the Fund are governed by its Articles of Incorporation
and By-Laws, and applicable Maryland law. The operations of the Trust are
governed by its Agreement and Declaration of Trust and By-Laws of the Trust, and
Delaware and federal law. The Agreement and Declaration of Trust is referred to
in this Prospectus/Proxy Statement as the "Declaration of Trust." As discussed
below, certain of the differences between the Trust and the Fund derive from
provisions of the Trust's Declaration of Trust and By-Laws and the Fund's
Articles of Incorporation and By-Laws. Shareholders entitled to instruct an
Insurance Company to vote at the Meeting may obtain a copy of the Fund's
Articles of Incorporation and By-Laws, without charge, upon written or oral
request to the Fund at the address and telephone number set forth on the cover
of this Prospectus/Proxy Statement.

Form of Organization

As noted above, the Fund is organized as a Maryland corporation, and the
Trust is organized as a Delaware statutory trust. The Fund and the Trust are
both open-end management investment companies registered with the SEC under the
1940 Act, and each is organized as a "series company" as that term is used in
Rule 18f-2 under the 1940 Act. The series of the Fund consist of the BlackRock
Portfolio and other mutual funds of various asset classes; the series of the
Trust consist of the AIM Portfolio and other mutual funds of various asset
classes. The Fund and the Trust currently offer shares of their portfolios
primarily to insurance company separate accounts to serve as investment vehicles
for variable annuity, and group annuity contracts and variable life insurance
policies issued by the Insurance Company and its affiliates. The Trust and the
Fund also offer shares of their portfolios to qualified pension and retirement
plans. Each is governed by its applicable Declaration of Trust or Articles of
Incorporation, By-Laws, and a Board of Trustees/Directors, and by applicable
Maryland or Delaware and federal law.

Capitalization

The beneficial interests in the Trust are represented by an unlimited
number of shares of beneficial interest, par value $.001 per share, of one or
more series. The beneficial interests in the Fund are represented by 4.75
billion shares of common stock with a par value of $0.01 each, of one or more
series. Both the Declaration of Trust of the Trust and the Articles of
Incorporation of the Fund permit the Trustees/Directors to allocate shares into
one or more series, and classes thereof, with rights determined by the
Trustees/Directors, all without shareholder approval. Fractional shares may be
issued by each Portfolio.

Shares of the AIM Portfolio are offered in two classes (Class A and Class
E) and represent an equal proportionate interest in the Portfolio. Shares of the
BlackRock Portfolio are currently offered in three classes (Class A, Class B and
Class E). Shares of the classes of the BlackRock Portfolio represent an equal
pro rata interest in the Portfolio and generally have identical voting,
dividend, liquidation and other rights, other than the payment of distribution
fees. Shareholders of each Portfolio are entitled to receive dividends and other
amounts as determined by the Trustees/Directors, as applicable. Shareholders of
each Portfolio vote separately, by Portfolio, as to matters, such as changes in
fundamental investment restrictions, that affect only their particular
Portfolio. Shareholders of each Portfolio vote by class as to matters, such as
approval of or amendments to Rule 12b-1 distribution plans, that affect only
their particular class.

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 Trust or a shareholder is subject
to the jurisdiction of courts in other states, it is possible that a court may
not apply Delaware law and may thereby subject shareholders of the Trust to
liability. To guard against this risk, the Declaration of Trust of the Trust (a)
provides that any written obligation of the Trust may contain a statement that
such obligation may only be enforced against the assets of the Trust or the
particular series in question and the obligation is not binding upon the
shareholders of the Trust; however, the omission of such a disclaimer will not
operate to create personal liability for any shareholder; and (b) provides for
indemnification out of Trust property of any shareholder held personally liable
for the obligations of the Trust. Accordingly, the risk of a shareholder of the
Trust incurring financial loss beyond that shareholder's investment because of
shareholder liability 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 Trust itself is unable to meet its obligations. In light of
Delaware law, the nature of the Trust's business, and the nature of its assets,
the risk of personal liability to a shareholder of the Trust is remote.

Under Maryland law, shareholders of the BlackRock Portfolio have no
personal liability as such for the acts or obligations of the Portfolio or the
Fund, as the case may be.

Shareholder Meetings and Voting Rights

Neither the Fund on behalf of the BlackRock Portfolio nor the Trust on
behalf of the AIM Portfolio is required to hold annual meetings of shareholders.
However, in the case of the Trust, a meeting of shareholders for the purpose of
voting upon the question of removal of a Trustee must be called when requested
in writing by the holders of at least 10% of the outstanding shares of the
Trust. In addition, both the Trust and the Fund are each required to call a
meeting of shareholders for the purpose of electing Trustees/Directors if, at
any time, less than a majority of the Trustees/Directors then holding office
were elected by shareholders. Neither the Fund nor the Trust currently intends
to hold regular shareholder meetings. The By-Laws of the Fund require an annual
meeting of shareholders only in years in which shareholder action is needed on
the election of Directors. The Fund's By-Laws permit a special meeting of the
shareholders to be called for any purpose by a majority of the Directors, the
Chairman of the Board or the President of the Fund. Cumulative voting is not
permitted in the election of Directors of the Fund or of Trustees of the Trust.
Like shareholders of the Trust, shareholders of the Fund are also entitled,
under the 1940 Act, to vote on certain matters specified in the 1940 Act.

The By-Laws 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 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. Approval of a matter by the shareholders of the Fund generally
requires the affirmative vote of a majority of the votes cast at a meeting at
which a quorum is present. A Director of the Fund must be elected by the
affirmative vote of a plurality of the votes cast by holders of shares entitled
to vote in such election. For the Trust, when a quorum is present at a meeting,
a majority (greater than 50%) of the shares voted is sufficient to act on a
matter and a plurality of the shares voted is required to elect a Trustee
(unless otherwise specifically required by the applicable governing documents or
other law, including the 1940 Act). A Director of the Fund may be removed with
or without cause by the shareholders holding a majority of the votes entitled to
be cast at an election of Directors at a meeting of shareholders at which a
quorum is present. A Trustee of the Trust may be removed at a meeting of
shareholders, duly called, by a vote of two-thirds of the outstanding shares of
the Trust, or with or without cause by the vote of two-thirds of the number of
Trustees prior to removal.

Under the Declaration of Trust/Articles of Incorporation of the Trust and
the Fund, respectively, each whole share of beneficial interest or common stock
of a Portfolio is entitled to one vote, and each fractional share is entitled to
a proportionate vote, in each case irrespective of class. The Declaration of
Trust of the Trust provides that unless otherwise required by applicable law
(including the 1940 Act), the Board of Trustees may, without obtaining a
shareholder vote: (1) reorganize the Trust as a corporation or other entity, (2)
merge the Trust into another entity, or merge, consolidate or transfer the
assets and liabilities of a Portfolio or class of shares to another entity, and
(3) combine the assets and liabilities held with respect to two or more series
or classes into assets and liabilities held with respect to a single series or
class. The Trustees of the Trust may also terminate the Trust, a Portfolio, or a
class of shares upon written notice to the shareholders.

Liquidation

In the event of liquidation of the Fund, the shareholders of each of the
Fund's Portfolios that has been established and designated, including of the
BlackRock Portfolio, shall be entitled to receive, as a group, the excess of the
assets belonging to that Portfolio over the liabilities belonging to that
Portfolio. The assets so distributable to the shareholders of any particular
portfolio that has but a single class of outstanding shares will be distributed
among such stockholders in proportion to the number of shares of that portfolio
held by them and recorded on the books of the Fund. Any assets not readily
identifiable as belonging to any particular portfolio will be allocated by or
under the supervision of the Directors to and among any one or more of the
portfolios established and designated. Any such allocation by the Directors is
conclusive and binding for all purposes. In the event of the liquidation of the
Trust, the same provisions discussed above would apply.

Liability and Indemnification of Trustees/Directors

Pursuant to Maryland law and its By-Laws, the Fund shall indemnify current
and former Directors and officers of the Fund to the extent permitted or
required by Maryland corporate law, provided, however, that other than for
Directors and except as specifically required by Maryland corporate law, the
Fund is required to indemnify or advance expenses only to the extent
specifically approved by resolution of the Fund's Board of Directors. No
indemnification or advance payment of expenses is provided to Directors or
officers who engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of duty. The By-Laws also provide that the Fund will not
advance payment of legal expenses to a Director or officer, unless the Director
or officer undertakes to repay the advance unless (A) it is determined that such
director or officer is entitled to the indemnification, and (B)(i) the Director
or officer provides a security for the undertaking, (ii) the Fund is insured
against losses arising from any unlawful advance, or (iii) a majority of a
quorum of the disinterested non-party Directors, or an independent legal counsel
by written opinion, determines that there is reason to believe that the person
ultimately will be found to be entitled to the indemnification.

Under the Declaration of Trust of the Trust, a Trustee is liable to any
person in connection with the assets or affairs of the Trust or any Portfolio
only for such Trustee's own willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of the office of
Trustee or the discharge of such Trustee's functions. As provided in the
Declaration of Trust, each Trustee of the 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 (1) did not act in good faith in the
reasonable belief that such Trustee's action was in or not opposed to the best
interests of the Trust; (2) had acted with willful misfeasance, bad faith, gross
negligence or reckless disregard of such Trustee's duties; and (3) in a criminal
proceeding, had reasonable cause to believe that such Trustee's conduct was
unlawful (collectively, "disabling conduct"). A determination that the Trustee
did not engage in disabling conduct and is, therefore, entitled to
indemnification may be based upon the outcome of a court action or
administrative proceeding or by (a) a vote of a majority of a quorum of those
Trustees who are neither "interested persons" within the meaning of the 1940 Act
nor parties to the proceeding or (b) an independent legal counsel in a written
opinion. The Portfolio may also advance money for such litigation expenses
provided that the Trustee undertakes to repay the Portfolio if his or her
conduct is later determined to preclude indemnification and certain other
conditions are met.

The foregoing is only a summary of certain characteristics of the
operations of the Declaration of Trust of the Trust and the Articles of
Incorporation of the Fund, their By-Laws and Delaware or Maryland law and is not
a complete description of those documents or law. Shareholders should refer to
the provisions of such Declaration of Trust/Articles of Incorporation, By-Laws
and Delaware or Maryland law directly for more complete information.

VOTING INFORMATION CONCERNING THE MEETING

This Prospectus/Proxy Statement is being sent to shareholders of the AIM
Portfolio in connection with a solicitation of voting instructions by the
Trustees of the Trust, to be used at the Meeting to be held at 10:00 a.m.
Eastern time, April 30, 2009, at the offices of the Met Investors Series Trust,
1095 Avenue of the Americas, 40th Floor, New York, New York 10036, and at any
adjournments thereof. This Prospectus/Proxy Statement, along with a Notice of
the Meeting and a voting instructions form, is first being mailed to
shareholders of the AIM Portfolio on or about March 2, 2009.

The Board of Trustees of the Trust has fixed the close of business on
January 30, 2009 as the record date (the "Record Date") for determining the
shareholders of the AIM Portfolio entitled to receive notice of the Meeting and
to give voting instructions, and for determining the number of shares for which
such instructions may be given, with respect to the Meeting or any adjournment
thereof. The Insurance Company, through its separate accounts, owns all of the
shares of the AIM Portfolio, and is the Record Holder of the Portfolio at the
close of business on the Record Date. The Insurance Company is entitled to be
present and vote at the Meeting with respect to such shares of the AIM
Portfolio. The Insurance Company has undertaken to vote its shares or abstain
from voting its shares of the AIM Portfolio for the Contract Owners of the
Portfolio in accordance with voting instructions received on a timely basis from
those Contract Owners. In connection with the solicitation of such voting
instructions, the Insurance Company will furnish a copy of this Prospectus/Proxy
Statement to Contract Owners.

The number of shares as to which voting instructions may be given under a
Contract is determined by the number of full and fractional shares of the AIM
Portfolio held in a separate account with respect to that particular Contract.
In voting for the Reorganization, each full share of the AIM Portfolio is
entitled to one vote and any fractional share is entitled to a fractional vote.

Voting instructions may be revoked by executing and delivering later-dated
signed voting instructions to the Insurance Company, or by attending the Meeting
in person and instructing the Insurance Company how to vote your shares. Unless
revoked, all valid voting instructions will be voted, or the Insurance Company
will abstain from voting, in accordance with the specifications thereon or, in
the absence of such specifications, FOR approval of the Plan and the
Reorganization contemplated thereby.

If you wish to participate in the Meeting, you may submit the voting
instructions form included with this Prospectus/Proxy Statement, vote by
telephone or through the Internet or attend in person and provide your voting
instructions to the Insurance Company. Guidelines on providing voting
instructions are immediately after the Notice of Special Meeting.

If the enclosed voting instructions form is properly executed and returned
in time to be voted at the Meeting, the shares of beneficial interest
represented by the voting instructions form will be voted, or the Insurance
Company will abstain from voting, in accordance with the instructions marked on
the returned voting instructions form.

o Voting instructions forms which are properly executed and returned but
are not marked with voting instructions will be voted FOR the proposed
Reorganization and FOR any other matters deemed appropriate.

Interests in Contracts for which no timely voting instructions are received
will be voted, or the Insurance Company will abstain from voting, in the same
proportion as the Insurance Company votes shares for which it has received
voting instructions from other Contract Owners. The Insurance Company will also
vote, or abstain from voting, any shares in its general account which are not
attributable to Contracts in the same proportion as it votes shares held in all
of the Insurance Company's registered separate accounts, in the aggregate.
Neither the SEC nor the Insurance Company requires any specific minimum
percentage of Contract Owners to vote in order for the Insurance Company to echo
vote the remaining unvoted votes. The Insurance Company seeks to obtain a
reasonable level of turnout given the particular voting trend. The Insurance
Company may use various methods of encouraging Contract Owners to vote,
including additional solicitations. The practice of echo voting means that a
minority of Contract Owners may, in practice, determine whether an item passes
or fails.

Approval of the Reorganization will require the affirmative vote of a
majority of the outstanding voting securities (as defined in the 1940 Act) of
the AIM Portfolio cast at a shareholders' meeting duly called and at which a
quorum is present (the presence in person or by proxy of holders entitled to
cast at least a majority of the votes at any shareholders' meeting). A vote of a
majority of the outstanding voting securities is defined in the 1940 Act as the
lesser of (a) 67% or more of the shares of the AIM Portfolio that are present or
represented by proxy at the Meeting, if more than 50% of the outstanding shares
of the AIM Portfolio are present in person or by proxy at the Meeting; or (b)
more than 50% of the outstanding shares of the AIM Portfolio. Abstentions will
be counted for purposes of determining a quorum, but will not be included in the
amount of shares voted. As of the Record Date, the Record Holder of the AIM
Portfolio was the Insurance Company. Since the Insurance Company's separate
accounts are the legal owners of the AIM Portfolio's shares, attendance by the
Insurance Company at the Meeting will constitute a quorum under the Declaration
of Trust of the Trust.

Voting instructions solicitations will be made primarily by mail, but
beginning on or about April 13, 2009 voting instructions solicitations may also
be made by telephone, through the Internet or personal solicitations conducted
by officers and employees of Met Investors Advisory, LLC, its affiliates or
other representatives of the AIM Portfolio (who will not be paid for their
soliciting activities). In addition, proxy solicitations may be made by
Computershare Fund Services, the Trust's proxy solicitor. The costs of
solicitation and the expenses incurred in connection with preparing this
Prospectus/Proxy Statement and its enclosures (estimated at $118,000) will be
borne by the AIM Portfolio. Neither the BlackRock Portfolio nor that Portfolio's
shareholders will bear any costs associated with the Meeting, this proxy
solicitation or any adjourned session.

If shareholders of the AIM Portfolio do not vote to approve the
Reorganization, the Trustees of the Trust will consider other possible courses
of action in the best interests of shareholders. If sufficient votes to approve
the Reorganization are not received, the persons named as proxies on a proxy
form sent to the Record Holder may propose one or more adjournments of the
Meeting to permit further solicitation of voting instructions. In determining
whether to adjourn the Meeting, the following factors may be considered: the
percentage of votes actually cast, the percentage of negative votes actually
cast, the nature of any further solicitation and the information to be provided
to shareholders with respect to the reasons for the solicitation. Any
adjournment will require an affirmative vote of a majority of those shares
represented at the Meeting in person or by proxy. The persons named as proxies
will vote upon such adjournment after consideration of all circumstances which
may bear upon a decision to adjourn the Meeting.

A shareholder of the AIM Portfolio who objects to the proposed
Reorganization will not be entitled under either Delaware law or the Declaration
of Trust, to demand payment for, or an appraisal of, his or her shares. However,
shareholders should be aware that the Reorganization as proposed is not expected
to result in recognition of gain or loss to the Record Holders or Contract
Owners for federal income tax purposes. In addition, if the Reorganization is
consummated, the rights of shareholders to transfer their account balances among
investment options available under the Contracts or to make withdrawals under
the Contracts will not be affected.

The Trust does not hold annual shareholder meetings. If the Reorganization
is not approved, shareholders wishing to submit proposals to be considered for
inclusion in a proxy statement for a subsequent shareholder meeting should send
their written proposals to the Secretary of the Trust at the address set forth
on the cover of this Prospectus/Proxy Statement so that they will be received by
the Trust in a reasonable period of time prior to that meeting.

The votes of the shareholders of the BlackRock Portfolio are not being
solicited by this Prospectus/Proxy Statement and are not required to carry out
the Reorganization.

Shareholder Information

The Record Holders of the AIM Portfolio at the close of business on January
30, 2009 (previously defined as the Record Date) will be entitled to be present
and vote at the Meeting with respect to shares of the AIM Portfolio owned as of
the Record Date. As of the Record Date, the total number of Class A and Class E
shares of the AIM Portfolio outstanding and entitled to vote were 14,138,832.721
and 1,553,999.069, respectively.

As of the Record Date, the officers and Trustees/Directors of the Trust and
of the Fund beneficially owned as a group less than 1% of the outstanding shares
of the AIM Portfolio and the BlackRock Portfolio, respectively.

Control Persons and Principal Holders of Securities

On the Record Date, to the knowledge of the Trustees and management of the
Trust, the following separate accounts collectively owned of record 100% of the
shares of the AIM Portfolio: First MetLife Investors Variable Annuity Account
One, MetLife Investors USA Separate Account A, General American Separate Account
29, MetLife of Connecticut Separate Account QPN for Variable Annuities, MetLife
of Connecticut Separate Account CPPVUL1, MetLife of Connecticut Fund UL III for
Variable Life Insurance, MetLife of Connecticut Separate Account Eleven for
Variable Annuities, MetLife of Connecticut Fund UL for Variable Life Insurance,
MetLife Investors Variable Annuity Account One, MetLife Investors Variable Life
Account One, MetLife Investors Variable Annuity Account Five, MetLife Investors
Variable Life Account Five, Metropolitan Life Variable Annuity Separate Account
I, Metropolitan Life Variable Annuity Separate Account II, and Metropolitan Life
Separate Account DCVL.

The Insurance Companies have advised the Fund and the Trust that as of the
Record Date, there were no persons owning Contracts which would entitle them to
instruct the Insurance Companies with respect to more than 5% of the shares of
the AIM Portfolio or the BlackRock Portfolio, respectively.

As of the date of this Prospectus/Proxy Statement, MetLife and its
affiliates owned 100% of the outstanding shares of the Trust and the Fund and as
a result MetLife may be deemed to be a control person with respect to the Trust
and the Fund.

FINANCIAL STATEMENTS AND EXPERTS

The Annual Report of each of the AIM Portfolio and the BlackRock Portfolio
as of and for the year ended December 31, 2008, and the financial statements and
financial highlights for the periods indicated therein, has been incorporated by
reference in the Registration Statement of which this Prospectus/Proxy Statement
is a part. The financial statements and financial highlights for the period
indicated therein that have been incorporated by reference in the Registration
Statement of which this Prospectus/Proxy Statement is a part have been audited
by Deloitte & Touche LLP, an independent registered public accounting firm, as
stated in their reports, which are incorporated by reference herein, and have
been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.

LEGAL MATTERS

Certain legal matters concerning the issuance of shares of the BlackRock
Portfolio will be passed upon by Ropes & Gray LLP.

ADDITIONAL INFORMATION

The Trust and the Fund are each subject to the informational requirements
of the Securities Exchange Act of 1934 and the 1940 Act, and in accordance
therewith file reports and other information including proxy material and
charter documents with the SEC. These items can be inspected and copied at the
Public Reference Facilities maintained by the SEC at 100 F Street, N.E.,
Washington, D.C. 20549, and at the SEC's Chicago Regional Office located at 175
W. Jackson Boulevard, Suite 900, Chicago, IL 60604 and the SEC's New York
Regional Office located at 3 World Financial Center, Suite 400, New York, NY
10281-1022. Copies of such materials can also be obtained at prescribed rates
from the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, Washington, D.C. 20549.

OTHER BUSINESS

The Trustees of the Trust do not intend to present any other business at
the Meeting. If, however, any other matters are properly brought before the
Meeting, the persons named in the accompanying form of proxy will vote thereon
in accordance with their judgment.

THE TRUSTEES OF THE TRUST RECOMMEND APPROVAL OF THE PLAN AND ANY UNMARKED
VOTING INSTRUCTIONS WILL BE VOTED IN FAVOR OF APPROVAL OF THE PLAN.

March 5, 2009

Exhibit A

FORM OF AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated as of
January 30, 2009, by and between (i) Met Investors Series Trust (the "Trust"), a
Delaware statutory trust established under an Agreement and Declaration of Trust
dated July 27, 2000, as amended and restated (the "Declaration of Trust") and in
effect on the date hereof on behalf of Met/AIM Capital Application Portfolio
(the "Acquired Fund"), and (ii) Metropolitan Series Fund, Inc. (the "Acquiring
Company"), a Maryland corporation formed on November 23, 1982, on behalf of
BlackRock Legacy Large Cap Growth Portfolio (the "Acquiring Fund"), a series of
the Acquiring Company.

This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the "Code"), and any successor
provision. The reorganization will consist of the transfer of all of the assets
of the Acquired Fund in exchange solely for shares of common stock of the
Acquiring Fund, the assumption by the Acquiring Fund of the liabilities of the
Acquired Fund and the distribution of such shares of the Acquiring Fund to the
shareholders of the Acquired Fund in liquidation of the Acquired Fund, all upon
the terms and conditions set forth in this Agreement.

In consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:

1. TRANSFER OF ASSETS OF ACQUIRED FUND IN EXCHANGE FOR ASSUMPTION OF
LIABILITIES AND ACQUIRING SHARES AND LIQUIDATION OF ACQUIRED FUND.

1.1 Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein:

(a) The Trust, on behalf of the Acquired Fund, will transfer and
deliver to the Acquiring Fund, and the Acquiring Fund will
acquire, all the assets of the Acquired Fund as set forth in
paragraph 1.2;

(b) The Acquiring Fund will assume all of the Acquired Fund's
liabilities and obligations of any kind whatsoever, whether
absolute, accrued, contingent or otherwise in existence on the
Closing Date (as defined in paragraph 1.2 hereof), including
without limitation any indemnification obligations of the
Acquired Fund, including indemnification of the officers and
directors of the Acquired Fund in connection with their actions
related to this transaction (collectively, the "Obligations");
and

(c) The Acquiring Fund will issue and deliver to the Acquired Fund in
exchange for such assets the number of full and fractional shares
of each class of the Acquiring Fund determined by dividing the
net asset value of the respective class of shares of the Acquired
Fund, computed in the manner and as of the time and date set
forth in paragraph 2.1, by the net asset value of one share of
the respective class of the Acquiring Fund, computed in the
manner and as of the time and date set forth in paragraph 2.2
(with the shares of the Acquiring Fund to be issued and delivered
in accordance with this subparagraph (c) being referred to herein
as the "Acquiring Shares"). Holders of Class A or Class E shares
of the Acquired Fund will receive Class A or Class E shares,
respectively, of the Acquiring Fund. Such transactions shall take
place at the closing provided for in paragraph 3.1 (the
"Closing").

1.2 The assets of the Acquired Fund to be acquired by the Acquiring Fund
shall consist of all cash, securities, dividends and interest
receivable, receivables for shares sold and all other assets which are
owned by the Acquired Fund on the closing date provided in paragraph
3.1 (the "Closing Date"), including any deferred expenses, other than
unamortized organizational expenses, shown as an asset on the books of
the Acquired Fund on the Closing Date.

1.3 As provided in paragraph 3.4, as soon after the Closing Date as is
conveniently practicable (the "Liquidation Date"), the Acquired Fund
will liquidate and distribute to its shareholders of record (the
"Acquired Fund Shareholders"), determined as of the close of business
on the Valuation Date (as defined in paragraph 2.1), the Acquiring
Shares received by the Acquired Fund pursuant to paragraph 1.1. Each
Acquired Fund Shareholder shall be entitled to receive that proportion
of each class of Acquiring Shares (consisting, in the case of each
Acquired Fund Shareholder, of Acquiring Shares of the same designated
class as the shares of the Acquired Fund which such Acquired Fund
Shareholder holds) which the number of shares of that class of the
Acquired Fund held by such Acquired Fund Shareholder bears to the
total number of shares of that class of the Acquired Fund outstanding
on the Valuation Date. Such liquidation and distribution will be
accomplished by the transfer of the Acquiring Shares then credited to
the account of the Acquired Fund on the books of the Acquiring Fund to
open accounts on the share records of the Acquiring Fund in the names
of the Acquired Fund Shareholders and representing the respective
number of Acquiring Shares due such shareholders. The Acquiring Fund
shall not be obligated to issue certificates representing Acquiring
Shares in connection with such exchange.

1.4 With respect to Acquiring Shares distributable pursuant to paragraph
1.3 to an Acquired Fund Shareholder holding a certificate or
certificates for shares of the Acquired Fund, if any, on the Valuation
Date, the Acquiring Company will not permit such Shareholder to
receive Acquiring Share certificates therefor, exchange such Acquiring
Shares for shares of other investment companies, effect an account
transfer of such Acquiring Shares, or pledge or redeem such Acquiring
Shares until the Acquiring Company has been notified by the Acquired
Fund or its agent that such Shareholder has surrendered all his or her
outstanding certificates for Acquired Fund shares or, in the event of
lost certificates, posted adequate bond.

1.5 Any obligation of the Acquired Fund to make filings with governmental
authorities is and shall remain the responsibility of the Acquired
Fund through the Closing Date and up to and including such later date
on which the Acquired Fund is terminated.

1.6 As promptly as practicable, but in any case within 60 days after the
Closing Date, the Acquired Fund shall furnish to the Acquiring Fund,
in such form as is reasonably satisfactory to the Acquiring Fund, a
statement of the earnings and profits of the Acquired Fund for federal
income tax purposes that will be carried over by the Acquiring Fund as
a result of Section 381 of the Code and certified by the Treasurer of
the Acquired Fund.

1.7 As promptly as possible after the Closing Date, the Acquired Fund
shall be terminated pursuant to the provisions of the laws of the
State of Delaware, and, after the Closing Date, the Acquired Fund
shall not conduct any business except in connection with its
liquidation.

2. VALUATION.

2.1 For the purpose of paragraph 1, the value of the assets of a class of
shares of the Acquired Fund shall be the net asset value of such class
of the Acquired Fund computed as of the close of regular trading on
the New York Stock Exchange on the business day next preceding the
Closing (such time and date being herein called the "Valuation Date")
using the valuation procedures as adopted by the Board of Directors of
the Acquiring Company, and shall be certified by an authorized officer
of the Trust.

2.2 For the purpose of paragraph 1, the net asset value of a share of a
class of the Acquiring Fund shall be the net asset value per share of
such class computed as of the close of regular trading on the New York
Stock Exchange on the Valuation Date, using the valuation procedures
as adopted by the Board of Directors of the Acquiring Company.

3. CLOSING AND CLOSING DATE.

3.1 The Closing Date shall be on May 1, 2009, or on such other date as the
parties may agree in writing. The Closing shall be held at 9:00 a.m.
on the Closing Date at the offices of Metropolitan Life Insurance
Company, located at 1095 Madison Avenue, 40th Floor, New York, New
York 10036, or at such other time and/or place as the parties may
agree.

3.2 The portfolio securities of the Acquired Fund shall be made available
by the Acquired Fund to State Street Bank and Trust Company, as
custodian for the Acquiring Fund (the "Custodian"), for examination no
later than five business days preceding the Valuation Date. On the
Closing Date, such portfolio securities and all the Acquired Fund's
cash shall be delivered by the Acquired Fund to the Custodian for the
account of the Acquiring Fund, such portfolio securities to be duly
endorsed in proper form for transfer in such manner and condition as
to constitute good delivery thereof in accordance with the custom of
brokers or, in the case of portfolio securities held in the U.S.
Treasury Department's book-entry system or by the Depository Trust
Company, Participants Trust Company or other third party depositories,
by transfer to the account of the Custodian in accordance with Rule
17f-4 or Rule 17f-5, as the case may be, under the Investment Company
Act of 1940, as amended (the "1940 Act") and accompanied by all
necessary federal and state stock transfer stamps or a check for the
appropriate purchase price of such transfer stamps. The cash delivered
shall be in the form of currency or certified or official bank checks,
payable to the order of "State Street Bank and Trust Company,
custodian for BlackRock Legacy Large Cap Growth Portfolio, a series of
Metropolitan Series Fund, Inc."

3.3 In the event that on the Valuation Date (a) the New York Stock
Exchange shall be closed to trading or general trading thereon shall
be restricted, or (b) trading or the reporting of trading on said
Exchange or elsewhere shall be disrupted so that accurate appraisal of
the value of the net assets of the Acquired Fund or the Acquiring Fund
is impracticable, the Valuation Date shall be postponed until the
first business day after the day when trading shall have been fully
resumed and reporting shall have been restored; provided that if
trading shall not be fully resumed and reporting restored within three
business days after the original Valuation Date, this Agreement may be
terminated by either of the Trust or the Acquiring Company upon the
giving of written notice to the other party.

3.4 At the Closing, the Acquired Fund or its transfer agent shall deliver
to the Acquiring Fund or its designated agent a list of the names and
addresses of the Acquired Fund Shareholders and the number of
outstanding shares of beneficial interest of each class of the
Acquired Fund owned by each Acquired Fund Shareholder, all as of the
close of business on the Valuation Date, certified by the Secretary or
Assistant Secretary of the Trust. The Acquiring Company shall provide
to the Acquired Fund evidence satisfactory to the Acquired Fund that
the Acquiring Shares issuable pursuant to paragraph 1.1 have been
credited to the Acquired Fund's account on the books of the Acquiring
Fund. On the Liquidation Date, the Acquiring Company shall provide to
the Acquired Fund evidence satisfactory to the Acquired Fund that such
Acquiring Shares have been credited pro rata to open accounts in the
names of the Acquired Fund Shareholders as provided in paragraph 1.3.

3.5 At the Closing each party shall deliver to the other such bills of
sale, instruments of assumption of liabilities, checks, assignments,
stock certificates, receipts or other documents as such other party or
its counsel may reasonably request in connection with the transfer of
assets, assumption of liabilities and liquidation contemplated by
paragraph 1.

4. REPRESENTATIONS AND WARRANTIES.

4.1 The Trust, on behalf of the Acquired Fund, represents and warrants the
following to the Acquiring Company and to the Acquiring Fund as of the
date hereof and agrees to confirm the continuing accuracy and
completeness in all material respects of the following on the Closing
Date:

(a) The Trust is a statutory trust duly organized, validly existing
and in good standing under the laws of the State of Delaware and
has the power to own all of its property and assets and to
conduct its business as currently conducted;

(b) The Trust is a duly registered investment company classified as a
management company of the open-end type and its registration with
the Securities and Exchange Commission as an investment company
under the 1940 Act is in full force and effect, and the Acquired
Fund is a separate series thereof duly established, designated
and existing in accordance with the applicable provisions of the
Declaration of Trust of the Trust and the 1940 Act;

(c) The Trust is not in violation in any material respect of any
provision of its Declaration of Trust or By-laws or of any
agreement, indenture, instrument, contract, lease or other
undertaking to which the Trust is a party or by which the
Acquired Fund is bound, and the execution, delivery and
performance of this Agreement will not result in any such
violation;

(d) The Trust has no material contracts or other commitments (other
than this Agreement and such other contracts as may be entered
into in the ordinary course of its business) which if terminated
may result in material liability to the Acquired Fund or under
which (whether or not terminated) any material payments for
periods subsequent to the Closing Date will be due from the
Acquired Fund;

(e) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or
threatened against the Acquired Fund, any of its properties or
assets, or any person whom the Acquired Fund may be obligated to
indemnify in connection with such litigation, proceeding or
investigation. The Acquired Fund knows of no facts which might
form the basis for the institution of such proceedings, and is
not a party to or subject to any order, decree or judgment of any
court or governmental body which materially and adversely affects
its business or its ability to consummate the transactions
contemplated hereby;

(f) The statement of assets and liabilities as of December 31, 2008,
the statement of operations for the fiscal year ended December
31, 2008, the statement of changes in net assets for the fiscal
year ended December 31, 2008, and the schedule of investments as
of December 31, 2008, of the Acquired Fund, copies of which will
be furnished to the Acquiring Fund prior to the Closing Date,
fairly reflect the financial condition and results of operations
of the Acquired Fund as of such dates and for the periods then
ended in accordance with generally accepted accounting principles
consistently applied, and the Acquired Fund has no known
liabilities of a material amount, contingent or otherwise, other
than those shown on the statement of assets referred to above or
those incurred in the ordinary course of its business since
December 31, 2008;

(g) Since December 31, 2008, there has not been any material adverse
change in the Acquired Fund's financial condition, assets,
liabilities or business (other than changes occurring in the
ordinary course of business), or any incurrence by the Acquired
Fund of indebtedness, except as disclosed in writing to the
Acquiring Fund. For the purposes of this subparagraph (g),
distributions of net investment income and net realized capital
gains, changes in portfolio securities, changes in the market
value of portfolio securities or net redemptions shall be deemed
to be in the ordinary course of business;

(h) By the Closing Date, all federal and other tax returns and
reports of the Acquired Fund required by law to have been filed
by such date (giving effect to extensions) shall have been filed,
all federal and other taxes shown to be due on said returns and
reports and any assessments received by the Acquired Fund shall
have been paid so far as due, or provision shall have been made
for the payment thereof, and to the best of the Acquired Fund's
knowledge no such return is currently under audit by the Internal
Revenue Service or any state or local tax authority and no
assessment has been asserted with respect to any such return;

(i) For all taxable years and all applicable quarters of such years
from the date of its inception, the Acquired Fund has met, and
will continue to meet through the Closing Date, the requirements
of Subchapter M of the Code, for treatment as a "regulated
investment company" within the meaning of Sections 851 and 852 of
the Code and the diversification requirements of Section 817(h)
of the Code and the regulations thereunder. Neither the Trust nor
the Acquired Fund has at any time since its inception been liable
for nor is now liable for any material excise tax pursuant to
Sections 852 or 4982 of the Code. The Acquired Fund is in
compliance in all material respects with applicable regulations
of the Internal Revenue Service pertaining to the reporting of
dividends and other distributions on and redemptions of its
shares of beneficial interest and to withholding in respect of
dividends and other distributions to shareholders, and is not
liable for any material penalties which could be imposed
thereunder;

(j) The authorized capital of the Trust consists of an unlimited
number of shares of beneficial interest, par value $0.001 per
share. The outstanding shares of beneficial interest in the
Acquired Fund are, and at the Closing Date will be, Class A and
Class E shares, having the characteristics described in the
Acquired Fund's then current prospectus or prospectuses and
statement of additional information or statements of additional
information (collectively, as amended or supplemented from time
to time, the "Acquired Fund Prospectus"). All issued and
outstanding shares of the Acquired Fund are, and at the Closing
Date will be, duly and validly issued and outstanding, fully paid
and (except as set forth in the Acquired Fund Prospectus),
non-assessable by the Acquired Fund and will have been issued in
compliance with all applicable registration or qualification
requirements of federal and state securities laws. No options,
warrants or other rights to subscribe for or purchase, or
securities convertible into, any shares of beneficial interest of
the Acquired Fund are outstanding and none will be outstanding on
the Closing Date;

(k) The Acquired Fund's investment operations from inception to the
date hereof have been in compliance in all material respects with
the investment policies and investment restrictions set forth in
the Acquired Fund Prospectus, except as previously disclosed in
writing to and accepted by the Acquiring Fund;

(l) The execution, delivery and performance of this Agreement has
been duly authorized by the Trustees of the Trust, and, upon
approval thereof by the required majority of the shareholders of
the Acquired Fund, this Agreement will constitute the valid and
binding obligation of the Acquired Fund enforceable in accordance
with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and other equitable
principles;

(m) The Acquiring Shares to be issued to the Acquired Fund pursuant
to paragraph 1 will not be acquired for the purpose of making any
distribution thereof other than to the Acquired Fund Shareholders
as provided in paragraph 1.3;

(n) The information provided by the Acquired Fund for use in the
Registration Statement and Prospectus/Proxy Statement referred to
in paragraph 5.3 and any information provided by the Acquired
Fund for use in any governmental filings in connection with the
transactions contemplated hereby, including without limitation
applications for exemption orders or no-action letters, shall be
accurate and complete in all material respects and shall comply
with federal securities and other laws and regulations applicable
thereto;

(o) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the
Acquired Fund of the transactions contemplated by this Agreement,
except such as may be required under the Securities Act of 1933,
as amended (the "1933 Act"), the Securities Exchange Act of 1934,
as amended (the "1934 Act"), the 1940 Act and state insurance,
securities or blue sky laws (which term as used in this Agreement
shall include the laws of the District of Columbia and of Puerto
Rico);

(p) At the Closing Date, the Trust, on behalf of the Acquired Fund,
will have good and marketable title to its assets to be
transferred to the Acquiring Fund pursuant to paragraph 1.1 and
will have full right, power and authority to sell, assign,
transfer and deliver the Investments (as defined below) and any
other assets and liabilities of the Acquired Fund to be
transferred to the Acquiring Fund pursuant to this Agreement. At
the Closing Date, subject only to the delivery of the Investments
and any such other assets and liabilities and payment therefor as
contemplated by this Agreement, the Acquiring Fund will acquire
good and marketable title thereto and will acquire the
Investments and any such other assets and liabilities subject to
no encumbrances, liens or security interests whatsoever and
without any restrictions upon the transfer thereof, except as
previously disclosed to and accepted by the Acquiring Fund. As
used in this Agreement, the term "Investments" shall mean the
Acquired Fund's investments shown on the schedule of its
investments as of December 31, 2008, referred to in Section
4.1(f) hereof, as supplemented with such changes in the portfolio
as the Acquired Fund shall make, and changes resulting from stock
dividends, stock splits, mergers and similar corporate actions
through the Closing Date;

(q) At the Closing Date, the Acquired Fund will have sold such of its
assets, if any, as are necessary to assure that, after giving
effect to the acquisition of the assets of the Acquired Fund
pursuant to this Agreement, the Acquiring Fund will remain in
compliance with such mandatory investment restrictions as are set
forth in the then current prospectus or prospectuses and the
statement of additional information or statements of additional
information of the Acquiring Fund (collectively, as from time to
time amended and supplemented, the "Acquiring Fund Prospectus"),
as amended through the Closing Date; and

(r) No registration of any of the Investments under the 1933 Act or
under any state securities or blue sky laws would be required if
they were, as of the time of such transfer, the subject of a
public distribution by either of the Acquiring Fund or the
Acquired Fund, except as previously disclosed by the Acquired
Fund to and accepted by the Acquiring Fund.

4.2 The Acquiring Company, on behalf of the Acquiring Fund, represents and
warrants the following to the Trust and to the Acquired Fund as of the
date hereof and agrees to confirm the continuing accuracy and
completeness in all material respects of the following on the Closing
Date:

(a) The Acquiring Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Maryland and has the power to own all of its property and assets
and to conduct its business as currently conducted;

(b) The Acquiring Company is a duly registered investment company
classified as a management company of the open-end type and its
registration with the Securities and Exchange Commission as an
investment company under the 1940 Act is in full force and
effect, and the Acquiring Fund is a separate series thereof duly
established, designated and existing in accordance with the
applicable provisions of the Articles of Incorporation of the
Acquiring Company and the 1940 Act;

(c) The Acquiring Fund Prospectus conforms in all material respects
to the applicable requirements of the 1933 Act and the rules and
regulations of the Securities and Exchange Commission thereunder
and does not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and
there are no material contracts to which the Acquiring Fund is a
party that are not referred to in such Prospectus or in the
registration statement of which it is a part;

(d) At the Closing Date, the Acquiring Fund will have good and
marketable title to its assets;

(e) The Acquiring Company is not in violation in any material respect
of any provisions of its Articles of Incorporation or By-laws or
of any agreement, indenture, instrument, contract, lease or other
undertaking to which the Acquiring Company is a party or by which
the Acquiring Fund is bound, and the execution, delivery and
performance of this Agreement will not result in any such
violation;

(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or
threatened against the Acquiring Fund or any of its properties or
assets. The Acquiring Fund knows of no facts which might form the
basis for the institution of such proceedings, and is not a party
to or subject to any order, decree or judgment of any court or
governmental body which materially and adversely affects its
business or its ability to consummate the transactions
contemplated hereby;

(g) The statement of assets and liabilities as of December 31, 2008,
the statement of operations for the fiscal year ended December
31, 2008, the statement of changes in net assets for the fiscal
year ended December 31, 2008, and the schedule of investments as
of December 31, 2008, of the Acquiring Fund, copies of which will
be furnished to the Acquired Fund prior to the Closing Date,
fairly reflect the financial condition and results of operations
of the Acquiring Fund as of such dates and for the periods then
ended in accordance with generally accepted accounting principles
consistently applied, and the Acquiring Fund has no known
liabilities of a material amount, contingent or otherwise, other
than those shown on the statement of assets referred to above or
those incurred in the ordinary course of its business since
December 31, 2008;

(h) Since December 31, 2008, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets,
liabilities or business (other than changes occurring in the
ordinary course of business), or any incurrence by the Acquiring
Fund of indebtedness. For the purposes of this subparagraph (h),
changes in portfolio securities, changes in the market value of
portfolio securities or net redemptions shall be deemed to be in
the ordinary course of business;

(i) By the Closing Date, all federal and other tax returns and
reports of the Acquiring Fund required by law to have been filed
by such date (giving effect to extensions) shall have been filed,
all federal and other taxes shown to be due on said returns and
reports and any assessments received by the Acquiring Fund shall
have been paid so far as due, or provision shall have been made
for the payment thereof, and to the best of the Acquiring Fund's
knowledge no such return is currently under audit by the Internal
Revenue Service or any state or local tax authority and no
assessment has been asserted with respect to any such return;

(j) For all taxable years and all applicable quarters of such years
from the date of its inception, the Acquiring Fund has met, and
will continue to meet through the Closing Date, the requirements
of Subchapter M of the Code for qualification as a regulated
investment company within the meaning of Sections 851 and 852 of
the Code and the diversification requirements of Section 817(h)
of the Code and the regulations thereunder;

(k) The authorized capital of the Acquiring Company consists of 4.75
billion shares of common stock, par value $0.01 per share, of
which 40 million shares are authorized for the Acquiring Fund.
The outstanding shares of common stock in the Acquiring Fund are,
and at the Closing Date will be Class A, Class B and Class E
shares, having the characteristics described in the Acquiring
Fund Prospectus. All issued and outstanding shares of the
Acquiring Fund are, and at the Closing Date will be, duly and
validly issued and outstanding, fully paid and non-assessable
(except as set forth in the Acquiring Fund Prospectus) by the
Acquiring Company, and will have been issued in compliance with
all applicable registration or qualification requirements of
federal and state securities laws. No options, warrants or other
rights to subscribe for or purchase, or securities convertible
into, any shares of common stock in the Acquiring Fund of any
class are outstanding and none will be outstanding on the Closing
Date (except such rights as the Acquiring Fund may have pursuant
to this Agreement);

(l) The Acquiring Fund's investment operations from inception to the
date hereof have been in compliance in all material respects with
the investment policies and investment restrictions set forth in
the Acquiring Fund Prospectus;

(m) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action on the part of the
Acquiring Company, and this Agreement constitutes the valid and
binding obligation of the Acquiring Company and the Acquiring
Fund enforceable in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights
generally and other equitable principles;

(n) The Acquiring Shares to be issued and delivered to the Acquired
Fund pursuant to the terms of this Agreement will at the Closing
Date have been duly authorized and, when so issued and delivered,
will be duly and validly issued Class A or Class E shares of
common stock in the Acquiring Fund, and will be fully paid and
non-assessable (except as set forth in the Acquiring Fund
Prospectus) by the Acquiring Company, and no shareholder of the
Acquiring Company will have any preemptive right of subscription
or purchase in respect thereof;

(o) The information to be furnished by the Acquiring Fund for use in
the Registration Statement and Prospectus/Proxy Statement
referred to in paragraph 5.3 and any information furnished by the
Acquiring Fund for use in any governmental filings in connection
with the transactions contemplated hereby, including without
limitation applications for exemption orders or no-action
letters, shall be accurate and complete in all material respects
and shall comply with federal securities and other laws and
regulations applicable thereto; and

(p) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the
Acquiring Fund of the transactions contemplated by this
Agreement, except such as may be required under 1933 Act, the
1934 Act, the 1940 Act and state insurance, securities or blue
sky laws.

5. COVENANTS OF THE ACQUIRED FUND AND THE ACQUIRING FUND.

The Acquiring Company, on behalf of the Acquiring Fund, and the Trust, on
behalf of the Acquired Fund, each hereby covenants and agrees with the other as
follows:

5.1 The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the
Closing Date, it being understood that such ordinary course of
business will include regular and customary periodic dividends and
distributions and any trading activities in anticipation of the
transactions contemplated hereby.

5.2 The Acquired Fund will call a meeting of its shareholders to be held
prior to the Closing Date to consider and act upon this Agreement and
take all other reasonable action necessary to obtain the required
shareholder approval of the transactions contemplated hereby.

5.3 In connection with the meeting of the Acquired Fund Shareholders
referred to in paragraph 5.2, the Acquired Fund will prepare a
Prospectus/Proxy Statement for such meeting, to be included in a
Registration Statement on Form N-14 (the "Registration Statement")
which the Acquiring Company will prepare and file for the registration
under the 1933 Act of the Acquiring Shares to be distributed to the
Acquired Fund Shareholders pursuant hereto, all in compliance with the
applicable requirements of the 1933 Act, the 1934 Act, and the 1940
Act.

5.4 The Acquiring Fund will advise the Acquired Fund promptly if at any
time prior to the Closing Date the Acquiring Fund becomes aware that
the assets of the Acquired Fund include any securities which the
Acquiring Fund is not permitted to acquire.

5.5 Subject to the provisions of this Agreement, the Acquired Fund and the
Acquiring Fund will each take, or cause to be taken, all action, and
do or cause to be done, all things reasonably necessary, proper or
advisable to cause the conditions to the other party's obligations to
consummate the transactions contemplated hereby to be met or fulfilled
and otherwise to consummate and make effective such transactions.

5.6 The Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act
and such of the state securities or blue sky laws as it may deem
appropriate in order to continue its operations after the Closing
Date.

6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.

The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Company and the Acquiring Fund of all the obligations to be performed
by them hereunder on or before the Closing Date and, in addition thereto, to the
following further conditions:

6.1 The Acquiring Company, on behalf of the Acquiring Fund, shall have
delivered to the Trust a certificate executed in its name by its
President or Vice President and its Treasurer or Assistant Treasurer,
in form and substance satisfactory to the Trust and dated as of the
Closing Date, to the effect that the representations and warranties of
the Acquiring Company on behalf of the Acquiring Fund made in this
Agreement are true and correct at and as of the Closing Date, except
as they may be affected by the transactions contemplated by this
Agreement, and that the Acquiring Company and the Acquiring Fund have
complied with all the covenants and agreements and satisfied all of
the conditions on their parts to be performed or satisfied under this
Agreement at or prior to the Closing Date.

6.2 The Acquiring Company, on behalf of the Acquiring Fund, shall have
executed and delivered to the Acquired Fund an Assumption of
Liabilities dated as of the Closing Date pursuant to which the
Acquiring Fund will assume all of the liabilities of the Acquired Fund
existing at the Valuation Date in connection with the transactions
contemplated by this Agreement, other than liabilities pursuant to
this Agreement.

6.3 The Trust shall have received a favorable opinion from Ropes and Gray
LLP, counsel to the Acquiring Company for the transactions
contemplated hereby, dated the Closing Date and, in a form
satisfactory to the Trust, to the following effect:

(a) the Acquiring Company is a corporation duly organized and validly
existing under the laws of the State of Maryland and has power
and authority necessary to own all of its properties and assets
and to carry on its business substantially as described in the
Registration Statement referred to in paragraph 5.3, and the
Acquiring Fund is a separate series thereof duly constituted in
accordance with the applicable provisions of the 1940 Act and the
Articles of Incorporation and By-laws of the Acquiring Company;

(b) this Agreement has been duly authorized, executed and delivered
on behalf of the Acquiring Fund and, assuming the
Prospectus/Proxy Statement and Registration Statement referred to
in paragraph 5.3 comply with applicable federal securities laws
and assuming the due authorization, execution and delivery of
this Agreement by the Trust on behalf of the Acquired Fund, is
the valid and binding obligation of the Acquiring Fund
enforceable against the Acquiring Fund in accordance with its
terms, except (i) as the same may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and general equitable
principles and (ii) insofar as rights to indemnity thereunder may
be limited by federal or state securities laws;

(d) the Acquiring Shares to be issued for transfer to the
shareholders of the Acquired Fund as provided by this Agreement
are duly authorized and upon such transfer and delivery will be
validly issued and outstanding and fully paid and nonassessable
Class A or Class E shares of common stock of the Acquiring Fund,
assuming that as consideration for such shares not less than the
net asset value of such shares has been paid and that the
conditions set forth in this Agreement have been satisfied, and
no shareholder of the Acquiring Fund has any preemptive right of
subscription or purchase in respect of such shares;

(e) the execution and delivery of this Agreement by the Acquiring
Company on behalf of the Acquiring Fund did not, and the
performance by the Acquiring Company and the Acquiring Fund of
their respective obligations hereunder will not, violate the
Acquiring Company's Articles of Incorporation or By-laws, or any
provision of any agreement known to such counsel to which the
Acquiring Company or the Acquiring Fund is a party or by which
either of them is bound or, to the knowledge of such counsel,
result in the acceleration of any obligation or the imposition of
any penalty under any agreement, judgment, or decree to which the
Acquiring Company or the Acquiring Fund is a party or by which
either of them is bound;

(f) to the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority is
required for the consummation by the Acquiring Company or the
Acquiring Fund of the transactions contemplated by this
Agreement, except such as may be required under state securities
or blue sky laws or such as have been obtained;

(g) such counsel does not know of any legal or governmental
proceedings relating to the Acquiring Company or the Acquiring
Fund existing on or before the date of mailing of the
Prospectus/Proxy Statement referred to in paragraph 5.3 or the
Closing Date required to be described in the Registration
Statement referred to in paragraph 5.3 which are not described
therein;

(h) the Acquiring Company is registered with the Securities and
Exchange Commission as an investment company under the 1940 Act;
and

(i) to the knowledge of such counsel, no litigation or administrative
proceeding or investigation of or before any court or
governmental body is presently pending or threatened as to the
Acquiring Company or the Acquiring Fund or any of their
properties or assets that would impair the Acquiring Company's
ability to perform its obligations under this Agreement, and, to
the knowledge of such counsel, neither the Acquiring Company nor
the Acquiring Fund is a party to or subject to the provisions of
any order, decree or judgment of any court or governmental body,
which materially and adversely affects its business.

7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.

The obligations of the Acquiring Fund to complete the transactions provided
for herein shall be subject, at its election, to the performance by the Acquired
Fund of all the obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, to the following further conditions:

7.1 The Trust, on behalf of the Acquired Fund, shall have delivered to the
Acquiring Company a certificate executed in its name by its President
or Vice President and its Treasurer or Assistant Treasurer, in form
and substance satisfactory to the Acquiring Company and dated as of
the Closing Date, to the effect that the representations and
warranties of the Acquired Fund made in this Agreement are true and
correct at and as of the Closing Date, except as they may be affected
by the transactions contemplated by this Agreement, and that the Trust
and the Acquired Fund have complied with all the covenants and
agreements and satisfied all of the conditions on their parts to be
performed or satisfied under this Agreement at or prior to the Closing
Date;

7.2 The Acquiring Company shall have received a favorable opinion from
Sullivan & Worcester LLP counsel to the Trust for the transactions
contemplated hereby, dated the Closing Date and in a form satisfactory
to the Acquiring Company, to the following effect:

(a) the Trust is a statutory trust duly organized and validly
existing under the laws of the State of Delaware and has power
and authority necessary to own all of its properties and assets
and to carry on its business substantially as described in the
Registration Statement referred to in paragraph 5.3, and the
Acquired Fund is a separate series thereof duly constituted in
accordance with the applicable provisions of the 1940 Act and
Declaration of Trust and By-laws of the Trust;

(b) this Agreement has been duly authorized, executed and delivered
on behalf of the Acquired Fund and, assuming the Prospectus/Proxy
Statement referred to in paragraph 5.3 complies with applicable
federal securities laws and assuming the due authorization,
execution and delivery of this Agreement by the Acquiring Company
on behalf of the Acquiring Fund, is the valid and binding
obligation of the Acquired Fund enforceable against the Acquired
Fund in accordance with its terms, except (i) as the same may be
limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights
generally and general equitable principles and (ii) insofar as
rights to indemnity thereunder may be limited by federal or state
securities laws;

(c) the Acquired Fund has the power to sell, assign, transfer and
deliver the assets to be transferred by it hereunder, and, upon
consummation of the transactions contemplated hereby, the
Acquired Fund will have duly transferred such assets to the
Acquiring Fund;

(d) the execution and delivery of this Agreement by the Trust on
behalf of the Acquired Fund did not, and the performance by the
Trust and the Acquired Fund of their respective obligations
hereunder will not, violate the Trust's Declaration of Trust or
By-laws, or any provision of any agreement known to such counsel
to which the Trust or the Acquired Fund is a party or by which
either of them is bound or, to the knowledge of such counsel,
result in the acceleration of any obligation or the imposition of
any penalty under any agreement, judgment, or decree to which the
Trust or the Acquired Fund is a party or by which either of them
is bound;

(e) to the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority is
required for the consummation by the Trust or the Acquired Fund
of the transactions contemplated by this Agreement, except such
as may be required under state securities or blue sky laws or
such as have been obtained;

(f) to such counsel's knowledge there is no legal or governmental
proceeding relating to the Trust or the Acquired Fund existing on
or before the date of mailing of the Prospectus/Proxy Statement
referred to in paragraph 5.3 or the Closing Date required to be
described in the Registration Statement referred to in paragraph
5.3 which are not described therein;

(g) the Trust is registered with the Securities and Exchange
Commission as an investment company under the 1940 Act;

(h) to such counsel's knowledge, there is no litigation or
administrative proceeding or investigation of or before any court
or governmental body presently pending or threatened as to the
Trust or the Acquired Fund or any of their properties or assets
that would impair the Trust's ability to perform its obligations
under this Agreement, and, to such counsel's knowledge, neither
the Trust nor the Acquired Fund is a party to or subject to the
provisions of any order, decree or judgment of any court or
governmental body, which materially and adversely affects its
business; and

(i) all issued and outstanding shares of the Acquired Fund are
legally issued, fully paid and non-assessable, assuming that as
consideration for such shares not less than the net asset value
of such shares has been paid, and assuming that such shares were
issued in accordance with the terms of the Acquired Fund's
registration statement, or any amendments thereto, in effect at
the time of such issuance.

7.3 The Acquired Fund shall have furnished to the Acquiring Fund tax
returns, signed by a partner of Deloitte & Touche LLP for the fiscal
year ended December 31, 2008.

7.4 Prior to the Closing Date, the Acquired Fund shall have declared a
dividend or dividends which, together with all previous dividends,
shall have the effect of distributing all of the Acquired Fund's
investment company taxable income for its taxable years ending on or
after December 31, 2008 and on or prior to the Closing Date (computed
without regard to any deduction for dividends paid), and all of its
net capital gains realized in each of its taxable years ending on or
after December 31, 2008 and on or prior to the Closing Date.

7.5 The Acquired Fund shall have furnished to the Acquiring Fund a
certificate, signed by the President (or any Vice President) and the
Treasurer of the Trust, as to the adjusted tax basis in the hands of
the Acquired Fund of the securities delivered to the Acquiring Fund
pursuant to this Agreement.

7.6 The custodian of the Acquired Fund shall have delivered to the
Acquiring Fund a certificate identifying all of the assets of the
Acquired Fund held by such custodian as of the Valuation Date, and the
Acquired Fund shall have delivered to the Acquiring Fund a statement
of assets and liabilities of the Acquired Fund as of the Valuation
Date, prepared in accordance with generally accepted accounting
principles consistently applied from the prior audited period,
certified by the Treasurer of the Acquired Fund.

8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH OF THE ACQUIRING FUND AND
THE ACQUIRED FUND.

The respective obligations of the Trust and the Acquiring Company hereunder
are each subject to the further conditions that on or before the Closing Date:

8.1 This Agreement and the transactions contemplated herein shall have
been approved by the vote of the required majority of the holders of
the outstanding shares of the Acquired Fund of record on the record
date for the meeting of its shareholders referred to in paragraph 5.2;

8.2 On the Closing Date no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought
to restrain or prohibit, or obtain damages or other relief in
connection with, this Agreement or the transactions contemplated
hereby;

8.3 All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including
those of the Securities and Exchange Commission and of state blue sky
and securities authorities) deemed necessary by the Trust or the
Acquiring Company to permit consummation, in all material respects, of
the transactions contemplated hereby shall have been obtained, except
where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or
properties of the Acquiring Fund or the Acquired Fund.

8.4 The Registration Statement referred to in paragraph 5.3 shall have
become effective under the 1933 Act and no stop order suspending the
effectiveness thereof shall have been issued and, to the best
knowledge of the parties hereto, no investigation or proceeding for
that purpose shall have been instituted or be pending, threatened or
contemplated under the 1933 Act;

8.5 The Trust and the Acquiring Company shall have received a favorable
opinion of Sullivan & Worcester LLP satisfactory to the Trust and the
Acquiring Company substantially to the effect that, for federal income
tax purposes, and while the matter is not entirely free from doubt:

(a) The transfer of all of the Acquired Fund assets in exchange
solely for the Acquiring Shares and the assumption by the
Acquiring Fund of the liabilities of the Acquired Fund followed
by the distribution of the Acquiring Shares to the Acquired Fund
Shareholders in dissolution and liquidation of the Acquired Fund
will constitute a "reorganization" within the meaning of Section
368(a) of the Code, and the Acquiring Fund and the Acquired Fund
will each be a "party to a reorganization" within the meaning of
Section 368(b) of the Code;

(b) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for
the Acquiring Shares and the assumption by the Acquiring Fund of
the liabilities of the Acquired Fund;

(c) No gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund assets to the Acquiring Fund in
exchange for the Acquiring Shares and the assumption by the
Acquiring Fund of the liabilities of the Acquired Fund or upon
the distribution (whether actual or constructive) of the
Acquiring Shares to the separate accounts as shareholders of
Acquired Fund in exchange for their shares of the Acquired Fund;

(d) No gain or loss will be recognized by the separate accounts as
shareholders of the Acquired Fund upon the exchange of their
Acquired Fund shares for the Acquiring Shares in liquidation of
the Acquired Fund;

(e) The aggregate tax basis of the Acquiring Shares received by each
separate account as a shareholder of the Acquired Fund pursuant
to the Reorganization will be the same as the aggregate tax basis
of the Acquired Fund shares held by such separate account as a
shareholder of the Acquired Fund immediately prior to the
Closing, and the holding period of the Acquiring Shares received
by each separate account as a shareholder of the Acquired Fund
will include the period during which the Acquired Fund shares
exchanged therefor were held (provided the Acquired Fund shares
were held as capital assets on the date of the Closing);

(f) The tax basis of the Acquired Fund assets acquired by the
Acquiring Fund will be the same as the tax basis of such assets
to the Acquired Fund immediately prior to the Closing, and the
holding period of the assets of the Acquired Fund in the hands of
the Acquiring Fund will include the period during which those
assets were held by the Acquired Fund; and

(g) The Acquiring Fund will succeed to and take into account capital
loss carryover, if any, of the Acquired Fund described in Section
381(c) of the Code. The Acquiring Fund will take any capital loss
carryovers into account subject to the conditions and limitations
specified in Sections 381, 382, 383 and 384 of the Code and
regulations thereunder.

8.6 At any time prior to the Closing, any of the foregoing conditions of
this Agreement may be waived jointly by the Board of Directors of the
Acquiring Company and the Board of Trustees of the Trust if, in their
judgment, such waiver will not have a material adverse effect on the
interests of the shareholders of the Acquired Fund and the Acquiring
Fund.

9. FEES AND EXPENSES.

9.1 Except as otherwise provided for herein, all expenses of the
transactions contemplated by this Agreement incurred by the Acquired
Fund and the Acquiring Fund, whether incurred before or after the date
of this Agreement, will be borne by the Acquired Fund. Such expenses
include, without limitation, (a) expenses incurred in connection with
the entering into and the carrying out of the provisions of this
Agreement; (b) expenses associated with the preparation and filing of
the Registration Statement under the 1933 Act covering the Acquiring
Fund Shares to be issued pursuant to the provisions of this Agreement;
(c) registration or qualification fees and expenses of preparing and
filing such forms as are necessary under applicable state securities
laws to qualify the Acquiring Fund Shares to be issued in connection
herewith in each state in which the Acquired Fund Shareholders are
resident as of the date of the mailing of the Prospectus/Proxy
Statement to such shareholders; (d) postage; (e) printing; (f)
accounting fees; (g) legal fees; and (h) solicitation costs of the
transaction. Notwithstanding the foregoing, the Acquiring Fund shall
pay its own federal and state registration fees.

9.2 In the event the transactions contemplated by this Agreement are not
consummated, then MetLife Advisers, LLC agrees that it shall bear all
of the costs and expenses incurred by both the Acquiring Fund and the
Acquired Fund in connection with such transactions.

9.3 Notwithstanding any other provisions of this Agreement, if for any
reason the transactions contemplated by this Agreement are not
consummated, neither the Acquiring Fund nor the Acquired Fund shall be
liable to the other for any damages resulting therefrom, including,
without limitation, consequential damages.

9.4 Notwithstanding any of the foregoing, costs and expenses will in any
event be paid by the party directly incurring them if and to the
extent that the payment by another party of such costs and expenses
would result in the disqualification of such party as a "regulated
investment company" within the meaning of Section 851 of the Code.

10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES.

10.1 The Trust on behalf of the Acquired Fund and the Acquiring Company on
behalf of the Acquiring Fund agree that neither party has made any
representation, warranty or covenant not set forth herein and that
this Agreement constitutes the entire agreement between the parties.

10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in
connection herewith shall not survive the consummation of the
transactions contemplated hereunder, except paragraphs 1.1, 1.3, 1.5,
1.6, 1.7, 3.4, 7.3, 9, 10, 13 and 14.

11. TERMINATION.

This Agreement may be terminated by the mutual agreement of the Acquiring
Company and the Trust. In addition, either the Acquiring Company or the Trust
may at its option terminate this Agreement at or prior to the Closing Date:

(a) Because of a material breach by the other of any representation,
warranty, covenant or agreement contained herein to be performed
by the other party at or prior to the Closing Date;

(b) If a condition herein expressed to be precedent to the
obligations of the terminating party has not been met and it
reasonably appears that it will not or cannot be met;

(c) If the transactions contemplated by this Agreement have not been
substantially completed by December 31, 2009, this Agreement
shall automatically terminate on that date unless a later date is
agreed to by both the Trust and the Acquiring Company; or

(d) If the Board of Directors of the Acquiring Fund or the Board of
Trustees of the Acquired Fund, as the case may be, determines
that the termination of this Agreement is in the best interests
of its shareholders.

12. AMENDMENTS.

This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the Trust
on behalf of the Acquired Fund and the Acquiring Company on behalf of the
Acquiring Fund; provided, however, that following the shareholders' meeting
called by the Acquired Fund pursuant to paragraph 5.2, no such amendment may
have the effect of changing the provisions for determining the number of the
Acquiring Shares to be issued to the Acquired Fund Shareholders under this
Agreement to the detriment of such Shareholders without their further approval.

13. NOTICES.

Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to: (i) Metropolitan Series
Fund, Inc., 501 Boylston Street, Boston, MA 02116, attn: Secretary; or (ii) Met
Investors Series Trust, 5 Park Place, Suite 1900, Irving, CA 92614, attn:
Secretary.

14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; NON-RECOURSE; FINDERS'
FEES.

14.1 The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.

14.3 This Agreement shall be governed by and construed in accordance with
the domestic substantive laws of the State of Maryland, without giving
effect to any choice or conflicts of law rule or provision that would
result in the application of the domestic substantive laws of any
other jurisdiction.

14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment
or transfer hereof or of any rights or obligations hereunder shall be
made by any party without the written consent of the other party.
Nothing herein expressed or implied is intended or shall be construed
to confer upon or give any person, firm or corporation, other than the
parties hereto and their respective successors and assigns, any rights
or remedies under or by reason of this Agreement.

14.5 A copy of the Articles of Incorporation of the Acquiring Company is on
file with the Secretary of State of the State of Maryland and a
Certificate of Trust of the Trust is on file with the Secretary of
State of the State of Delaware, and notice is hereby given that no
trustee, director, officer, agent or employee of either the Acquiring
Company or the Trust shall have any personal liability under this
Agreement, and that this Agreement is binding only upon the assets and
properties of the Acquired Fund and the Acquiring Fund.

14.6 The Trust, on behalf of the Acquired Fund, and the Acquiring Company,
on behalf of the Acquiring Fund, each represents and warrants to the
other that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed as a sealed instrument by its President or Vice President and its
corporate seal to be affixed thereto and attested by its Secretary or Assistant
Secretary.

METROPOLITAN SERIES FUND, INC.,
on behalf of its BlackRock Legacy Large Cap Growth
Portfolio

By:
--------------------------------------------------

Name:
--------------------------------------------

Title:
--------------------------------------------

MET INVESTORS SERIES TRUST,
on behalf of its Met/AIM Capital Appreciation
Portfolio

By:
--------------------------------------------------

Name:
--------------------------------------------

Title:
--------------------------------------------

Agreed and accepted as to paragraph 9 only:

METLIFE ADVISERS, LLC

By:
-----------------------------------------------

Name:
----------------------------------------------

Title:
---------------------------------------------

STATEMENT OF ADDITIONAL INFORMATION

Acquisition of Assets of

MET/AIM CAPITAL APPRECIATION PORTFOLIO
a series of
Met Investors Series Trust
5 Park Plaza, Suite 1900
Irvine, California 92614
(800) 848-3854

BY AND IN EXCHANGE FOR SHARES OF

BLACKROCK LEGACY LARGE CAP GROWTH PORTFOLIO
a series of
Metropolitan Series Fund, Inc.
501 Boylston Street,
Boston, Massachusetts 02116
(800) 638-7732

This Statement of Additional Information, dated March 5, 2009, relating
specifically to the proposed transfer of the assets and liabilities of the
Met/AIM Capital Appreciation Portfolio (the "AIM Portfolio"), a series of the
Met Investors Series Trust (the "Trust"), to the BlackRock Legacy Large Cap
Growth Portfolio (the "BlackRock Portfolio"), a series of Metropolitan Series
Fund, Inc. (the "Fund"), in exchange for Class A and Class E shares of common
stock, par value $0.01 per share, of the BlackRock Portfolio to be issued to the
holders of Class A and Class E shares, respectively, of the AIM Portfolio,
consists of the information set forth below pertaining to the AIM Portfolio and
the BlackRock Portfolio and the following described documents, each of which is
attached hereto and incorporated by reference herein:

(1) Statement of Additional Information of the Trust relating to the AIM
Portfolio dated April 28, 2008, as supplemented;

(2) Statement of Additional Information of the Fund relating to the BlackRock
Portfolio dated April 28, 2008, as supplemented;

(3) Annual Report of the Trust relating to the AIM Portfolio for the year ended
December 31, 2008 [To be filed by amendment];

(4) Annual Report of the Fund relating to the BlackRock Portfolio for the year
ended December 31, 2008 [To be filed by amendment]; and

(5) Pro Forma Financial Statements dated as of December 31, 2008.

This Statement of Additional Information, which is not a prospectus,
supplements, and should be read in conjunction with, the Prospectus/Proxy
Statement of the AIM Portfolio and the BlackRock Portfolio dated March 5, 2009.
A copy of the Prospectus/Proxy Statement may be obtained without charge by
calling or writing to the Fund at the telephone number or address set forth
above.

MET INVESTORS SERIES TRUST

5 Park Plaza
Suite 1900
Irvine, California 92614
800-848-3854

Statement of Additional Information

April 28, 2008

Portfolios

Met/AIM Capital Appreciation Portfolio Lord Abbett Growth and Income Portfolio
Met/AIM Small Cap Growth Portfolio Lord Abbett Mid Cap Value Portfolio
Batterymarch Growth and Income Portfolio MFS(R) Emerging Markets Equity
Portfolio BlackRock High Yield Portfolio MFS(R) Research International Portfolio
BlackRock Large Cap Core Portfolio Oppenheimer Capital Appreciation Portfolio
Clarion Global Real Estate Portfolio (formerly Neuberger PIMCO Inflation Protected Bond Portfolio
Berman Real Estate Portfolio)

Dreman Small Cap Value Portfolio PIMCO Total Return Portfolio
Met/Franklin Income Portfolio Pioneer Fund Portfolio
Met/Franklin Mutual Shares Portfolio Pioneer Strategic Income Portfolio
Goldman Sachs Mid Cap Value Portfolio RCM Technology Portfolio
Harris Oakmark International Portfolio Rainier Large Cap Equity Portfolio
Janus Forty Portfolio T. Rowe Price Mid Cap Growth Portfolio
Lazard Mid Cap Portfolio Met/Templeton Growth Portfolio
Legg Mason Partners Aggressive Growth Portfolio Third Avenue Small Cap Value Portfolio
Legg Mason Partners Managed Assets Portfolio Turner Mid Cap Growth Portfolio
Legg Mason Value Equity Portfolio Van Kampen Comstock Portfolio
Loomis Sayles Global Markets Portfolio Van Kampen Mid Cap Growth Portfolio
Lord Abbett Bond Debenture Portfolio

Asset Allocation Portfolios

American Funds Balanced Allocation Portfolio
American Funds Growth Allocation Portfolio
American Funds Moderate Allocation Portfolio
MetLife Aggressive Strategy Portfolio
MetLife Balanced Strategy Portfolio
MetLife Defensive Strategy Portfolio
MetLife Growth Strategy Portfolio
MetLife Moderate Strategy Portfolio
Strategic Conservative Growth Portfolio
Strategic Growth Portfolio
Strategic Growth and Income Portfolio
Met/Franklin Templeton Founding Strategy Portfolio

This Statement of Additional Information provides supplementary
information pertaining to shares of 47 investment portfolios ("Portfolios") of
Met Investors Series Trust (the "Trust"), an open-end, management investment
company. This Statement of Additional Information is not a prospectus and should
be read in conjunction with the Prospectuses dated April 28, 2008 for, as
applicable, the Class A, Class B, Class C and Class E shares of the Portfolios
listed above. The Prospectuses may be obtained by writing to the Trust at the
address above or by calling 800-848-3854.

The Portfolios listed under the heading Allocation Portfolios are
collectively referred to herein as the "Allocation Portfolios" and individually,
an "Allocation Portfolio". Unless otherwise defined herein, capitalized terms
have the meanings given to them in the Prospectus.

The audited financial statements described in "Financial Statements"
herein for the periods ended December 31, 2007, including the financial
highlights, appearing in the Trust's Annual Report to Shareholders, filed
electronically with the Securities and Exchange Commission on March 6, 2008
(File No. 811-10183), are incorporated by reference and made part of this
document.

No person has been authorized to give any information or to make any
representation not contained in this Statement of Additional Information or in
the Prospectus and, if given or made, such information or representation must
not be relied upon as having been authorized. This Statement of Additional
Information does not constitute an offering of any securities other than the
registered securities to which it relates or an offer to any person in any state
or other jurisdiction of the United States or any country where such offer would
be unlawful.

TABLE OF CONTENTS

Page

INVESTMENT OBJECTIVES AND POLICIES................................................................................5
Asset-Backed Securities..................................................................................5
Brady Bonds..............................................................................................6
Collateralized Debt Obligations..........................................................................7
Convertible Securities...................................................................................8
Credit Default Swaps.....................................................................................9
Depositary Receipts......................................................................................9
Dollar Roll Transactions................................................................................10
Event-Linked Bonds......................................................................................10
Floaters................................................................................................11
Foreign Currency Transactions...........................................................................11
Foreign Securities......................................................................................15
Forward Commitments, When-Issued and Delayed Delivery ..................................................20
High Yield/High Risk Debt Securities....................................................................20
Hybrid Instruments......................................................................................22
Illiquid Securities.....................................................................................23
Inflation-Indexed Bonds.................................................................................23
Interest Rate Transactions..............................................................................24
Investment Grade Corporate Debt Securities..............................................................26
Loans and Other Direct Indebtedness.....................................................................26
Money Market Securities.................................................................................26
Mortgage-Backed Securities..............................................................................28
Municipal Fixed Income Securities.......................................................................30
Options and Futures Strategies..........................................................................31
Other Investment Companies..............................................................................36
Portfolio Turnover......................................................................................38
Real Estate Investment Trusts...........................................................................39
Repurchase Agreements...................................................................................40
Reverse Repurchase Agreements...........................................................................40
Rights and Warrants.....................................................................................41
Securities Loans........................................................................................41
Short Sales.............................................................................................42
Structured Notes........................................................................................43
Swaps...................................................................................................43
U.S. Government Securities..............................................................................45
Zero Coupon Bonds, Deferred Interest Bonds and PIK Bonds................................................45
INVESTMENT RESTRICTIONS..........................................................................................46
Fundamental Policies....................................................................................46
Non-Fundamental Policies................................................................................47

PERFORMANCE INFORMATION..........................................................................................51
Total Return............................................................................................51
Yield...................................................................................................52
Non-Standardized Performance............................................................................53

PORTFOLIO TRANSACTIONS...........................................................................................53

MANAGEMENT OF THE TRUST..........................................................................................58
Trustees and Officers...................................................................................58
Committees of the Board.................................................................................62
Compensation of the Trustees............................................................................63
Indemnification of Trustees and Officers................................................................64
Trustees' and Officers' Share Ownership.................................................................64
Proxy Voting Policies and Procedures....................................................................64
Proxy Voting Records....................................................................................65
Portfolio Holdings Disclosure Policy....................................................................65

INVESTMENT ADVISORY AND OTHER SERVICES...........................................................................66
The Manager.............................................................................................66
The Advisers............................................................................................80
Portfolio Management....................................................................................85
The Administrator.......................................................................................85
The Distributor.........................................................................................85
Code of Ethics..........................................................................................90
Custodian...............................................................................................90
Transfer Agent..........................................................................................90
Legal Matters...........................................................................................90
Independent Registered Public Accounting Firm...........................................................90

REDEMPTION OF SHARES.............................................................................................90

NET ASSET VALUE..................................................................................................91

FEDERAL INCOME TAXES.............................................................................................92
ORGANIZATION AND CAPITALIZATION OF THE TRUST.....................................................................95

FINANCIAL STATEMENTS.............................................................................................97

APPENDIX A (Securities Ratings).................................................................................A-1

APPENDIX B (Proxy Voting Policies and Procedures)...............................................................B-1

APPENDIX C (Portfolio Manager Disclosure).......................................................................C-1

INVESTMENT OBJECTIVES AND POLICIES

The following information supplements the discussion of the investment
objectives and policies of the Portfolios in the Prospectus. If a Portfolio is
not identified below in connection with a particular strategy or technique, its
Adviser, as of the effective date of this Statement of Additional Information,
does not currently intend to invest any of the Portfolio's assets in that
strategy or technique although it has the ability to do so and may do so in the
future.

Each Allocation Portfolio operates under a "fund of funds" structure,
investing substantially all of its assets in other mutual funds managed by the
Manager or its affiliates or unaffiliated third party investment advisers
("Third Party Funds"), as applicable (collectively, the "Underlying
Portfolios"). In addition to investments in shares of the Underlying Portfolios,
an Allocation Portfolio may invest for cash management purposes in U.S.
government securities and in money market securities. In addition to the fees
directly associated with an Allocation Portfolio, an investor in that Portfolio
will also indirectly bear the fees of the Underlying Portfolios in which an
Allocation Portfolio invests. This Statement of Additional Information contains
information about Underlying Portfolios that are series of the Trust. For
additional information about Underlying Portfolios that are series of
Metropolitan Series Fund, Inc., please see the April 28, 2008 prospectus and
statement of additional information of Metropolitan Series Fund, Inc. (SEC File
No. 811-03618). For additional information about Underlying Portfolios that are
Third Party Funds, please see the current prospectus and statement of additional
information applicable to such Third Party Fund.

Each Allocation Portfolio invests in shares of the Underlying
Portfolios and its performance is directly related to the ability of the
Underlying Portfolios to meet their respective investment objectives, as well as
the Manager's or Adviser's, as applicable, allocation among the Underlying
Portfolios. Accordingly, each Allocation Portfolio's investment performance will
be influenced by the investment strategies of and risks associated with the
Underlying Portfolios, as described below, in direct proportion to the amount of
assets each Allocation Portfolio allocates to the Underlying Portfolios
utilizing such strategies. However, information in "Money Market Securities",
"Other Investment Companies" and "U.S. Government Securities" also applies
generally to direct investments that may be made by the Allocation Portfolios.

Asset-Backed Securities. (Met/AIM Capital Appreciation,
Met/AIM Small Cap Growth, BlackRock High Yield, Met/Franklin Income,
Met/Franklin Mutual Shares, Goldman Sachs Mid Cap Value, Janus Forty,
Lazard Mid Cap, Legg Mason Partners Managed Assets, Legg Mason Value
Equity, Loomis Sayles Global Markets, Lord Abbett Bond Debenture, PIMCO
Inflation Protected Bond, PIMCO Total Return, Pioneer Fund, Pioneer
Strategic Income, T. Rowe Price Mid Cap Growth and Third Avenue Small
Cap Value Portfolios)

Asset-backed securities include interests in pools of receivables, such
as motor vehicle installment purchase obligations and credit card receivables.
Such securities are generally issued as pass-through certificates, which
represent undivided fractional ownership interests in the underlying pools of
assets.

Asset-backed securities are not issued or guaranteed by the U.S.
government or its agencies or government-sponsored entities; however, the
payment of principal and interest on such obligations may be guaranteed up to
certain amounts and for a certain time period by a letter of credit issued by a
financial institution (such as a bank or insurance company) unaffiliated with
the issuers of such securities. In addition, such securities generally will have
remaining estimated lives at the time of purchase of five years or less. Due to
the possibility that prepayments (on automobile loans and other collateral) will
alter the cash flow on asset-backed securities, it is not possible to determine
in advance the actual final maturity date or average life. Faster prepayment
will shorten the average life and shorter prepayments will lengthen it.

The purchase of asset-backed securities raises considerations peculiar
to the financing of the instruments underlying such securities. For example,
most organizations that issue asset-backed securities relating to motor vehicle
installment purchase obligations perfect their interests in their respective
obligations only by filing a financing statement and by having the servicer of
the obligations, which is usually the originator, take custody thereof. In such
circumstances, if the servicer were to sell the same obligations to another
party, in violation of its duty not to do so, there is a risk that such party
could acquire an interest in the obligations superior to that of holders of the
asset-backed securities. Also, although most such obligations grant a security
interest in the motor vehicle being financed, in most states the security
interest in a motor vehicle must be noted on the certificate of title to perfect
such security interest against competing claims of other parties. Due to the
large number of vehicles involved, however, the certificate of title to each
vehicle financed, pursuant to the obligations underlying the asset-backed
securities, usually is not amended to reflect the assignment of the seller's
security interest for the benefit of the holders of the asset-backed securities.
Therefore, there is the possibility that recoveries on repossessed collateral
may not, in some cases, be available to support payments on those securities. In
addition, various state and federal laws give the motor vehicle owner the right
to assert against the holder of the owner's obligation certain defenses such
owner would have against the seller of the motor vehicle. The assertion of such
defenses could reduce payments on the related asset-backed securities. Insofar
as credit card receivables are concerned, credit card holders are entitled to
the protection of a number of state and federal consumer credit laws, many of
which give such holders the right to set off certain amounts against balances
owed on the credit card, thereby reducing the amounts paid on such receivables.
In addition, unlike most other asset-backed securities, credit card receivables
are unsecured obligations of the card holder.

In the case of privately issued asset-backed securities, the Trust
takes the position that such instruments do not represent interests in any
particular industry or group of industries.

Brady Bonds. (Met/AIM Capital Appreciation, BlackRock Large
Cap Core, Dreman Small Cap Value, Met/Franklin Income, Janus Forty,
Legg Mason Partners Managed Assets, Loomis Sayles Global Markets, Lord
Abbett Bond Debenture, MFS(R) Emerging Markets Equity, PIMCO Inflation
Protected Bond, PIMCO Total Return and Pioneer Strategic Income
Portfolios)

Brady Bonds are securities created through the exchange of existing
commercial bank loans to public and private entities in certain emerging markets
for new bonds in connection with debt restructurings under a debt restructuring
plan introduced by former U.S. Secretary of the Treasury, Nicholas F. Brady (the
"Brady Plan"). Brady Plan debt restructurings have been implemented to date in
Argentina, Brazil, Bulgaria, Costa Rica, Croatia, Dominican Republic, Ecuador,
Jordan, Mexico, Morocco, Nigeria, Panama, Peru, the Philippines, Poland,
Slovenia, Uruguay and Venezuela. Brady Bonds have been issued only in the last
decade, and for that reason do not have a long payment history. Brady Bonds may
be collateralized or uncollateralized, are issued in various currencies (but
primarily the U.S. dollar) and are actively traded in over-the-counter secondary
markets. U.S. dollar-denominated, collateralized Brady Bonds, which may be fixed
rate bonds or floating-rate bonds, are generally collateralized in full as to
principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds. Brady Bonds are often viewed as having three or four valuation
components: the collateralized repayment of principal at maturity; the
collateralized interest payments; the uncollateralized interest payments; and
any uncollateralized repayment of principal at maturity (the uncollateralized
amounts constituting the "residual risk"). In light of the residual risk of
Brady Bonds and the history of defaults of countries issuing Brady Bonds with
respect to commercial bank loans by public and private entities, investments in
Brady Bonds may be viewed as speculative.

Collateralized Debt Obligations. (BlackRock High Yield, Janus Forty, Legg
Mason Partners Managed Assets, Legg Mason Value Equity, Loomis Sayles
Global Markets, MFS(R) Value, PIMCO Inflation Protected Bond, PIMCO Total
Return, Pioneer Fund and Pioneer Strategic Income Portfolios)

A Portfolio may invest in collateralized debt obligations ("CDOs"),
which includes collateralized bond obligations ("CBOs"), collateralized loan
obligations ("CLOs") and other similarly structured securities. CBOs and CLOs
are types of asset-backed securities. A CBO is a trust which is backed by a
diversified pool of high risk, below investment grade fixed income securities. A
CLO is a trust typically collateralized by a pool of loans, which may include,
among others, domestic and foreign senior secured loans, senior unsecured loans,
and subordinate corporate loans, including loans that may be rated below
investment grade or equivalent unrated loans.

For both CBOs and CLOs, the cashflows from the trust are split into two
or more portions, called tranches, varying in risk and yield. The riskiest
portion is the "equity" tranche which bears the bulk of defaults from the bonds
or loans in the trust and services to protect the other, more senior tranches
from default in all but the most severe circumstances. Since it is partially
protected from defaults, a senior tranche from a CBO trust or CLO trust
typically have higher ratings and lower yields than their underlying securities,
and can be rated investment grade. Despite the protection from the equity
tranche, CBO or CLO tranches can experience substantial losses due to actual
defaults, increased sensitivity to defaults due to collateral default and
disappearance of protecting tranches, market anticipation of defaults, as well
as aversion to CBO or CLO securities as a class.

The risks of an investment in a CDO depend largely on the type of the
collateral securities and the class of the CDO in which a Portfolio invests.
Normally, CBOs, CLOs and other CDOs are privately offered and sold, and thus,
are not registered under the securities laws. As a result, investments in CDOs
may be characterized by the Portfolio as illiquid securities, however an active
dealer market may exist for CDOs allowing a CDO to qualify for Rule 144A
transactions. In addition to the normal risks associated with fixed income
securities discussed elsewhere in this Statement of Additional Information and
the Portfolios' Prospectus (e.g., interest rate risk and default risk), CDOs
carry additional risks including, but are not limited to: (i) the possibility
that distributions from collateral securities will not be adequate to make
interest or other payments; (ii) the quality of the collateral may decline in
value or default; (iii) the Portfolio may invest in CDOs that are subordinate to
other classes; and (iv) the complex structure of the security may not be fully
understood at the time of investment and may produce disputes with the issuer or
unexpected investment results.

Convertible Securities. (All Portfolios except Batterymarch Growth and
Income and Turner Mid Cap Growth Portfolios)

A Portfolio may invest in convertible securities of domestic and,
subject to the Portfolio's investment strategy, foreign issuers. The convertible
securities in which a Portfolio may invest include any debt securities or
preferred stock which may be converted into common stock or which carry the
right to purchase common stock. Convertible securities entitle the holder to
exchange the securities for a specified number of shares of common stock,
usually of the same company, at specified prices within a certain period of
time.

Convertible securities may be converted at either a stated price or
stated rate into underlying shares of common stock. Although to a lesser extent
than with fixed-income securities, the market value of convertible securities
tends to decline as interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stock. A unique feature of convertible
securities is that as the market price of the underlying common stock declines,
convertible securities tend to trade increasingly on a yield basis, and so may
not experience market value declines to the same extent as the underlying common
stock. When the market price of the underlying common stock increases, the
prices of the convertible securities tend to rise as a reflection of the value
of the underlying common stock. While no securities investments are without
risk, investments in convertible securities generally entail less risk than
investments in common stock of the same issuer.

Convertible securities are investments that provide for a stable stream
of income with generally higher yields than common stocks. There can be no
assurance of current income because the issuers of the convertible securities
may default on their obligations. A convertible security, in addition to
providing fixed income, offers the potential for capital appreciation through
the conversion feature, which enables the holder to benefit from increases in
the market price of the underlying common stock. There can be no assurance of
capital appreciation, however, because securities prices fluctuate. Convertible
securities, however, generally offer lower interest or dividend yields than
non-convertible securities of similar quality because of the potential for
capital appreciation.

Subsequent to purchase by a Portfolio, convertible securities may cease
to be rated or a rating may be reduced below the minimum required for purchase
for that Portfolio. Neither event will require the sale of such securities,
although a Portfolio's investment adviser will consider such event in its
determination of whether the Portfolio should continue to hold the securities.

Credit Default Swaps. (BlackRock High Yield, Met/Franklin Income,
Met/Franklin Mutual Shares, Janus Forty, Legg Mason Partners Managed
Assets, Lord Abbett Bond Debenture, PIMCO Inflation Protected Bond, PIMCO
Total Return and Pioneer Strategic Income Portfolios)

A Portfolio may enter into credit default swap contracts for investment
purposes. As the seller in a credit default swap contract, the Portfolio would
be required to pay the par (or other agreed-upon) value of a referenced debt
obligation to the counterparty in the event of a default by a third party, such
as a U.S. or foreign corporate issuer, on the debt obligation. In return, the
Portfolio would receive from the counterparty a periodic stream of payments over
the term of the contract provided that no event of default has occurred. If no
default occurs, the Portfolio would keep the stream of payments and would have
no payment obligations. As the seller, the Portfolio would be subject to
investment exposure on the notional amount of the swap.

A Portfolio may also purchase credit default swap contracts in order to
hedge against the risk of default of debt securities held in its portfolio, in
which case the Portfolio would function as the counterparty referenced in the
preceding paragraph. This would involve the risk that the investment may expire
worthless and would only generate income in the event of an actual default by
the issuer of the underlying obligation (as opposed to a credit downgrade or
other indication of financial instability). It would also involve credit risk -
that the seller may fail to satisfy its payment obligations to the Portfolio in
the event of a default.

Depositary Receipts. (All Portfolios)

A Portfolio may purchase foreign securities in the form of American
Depositary Receipts, European Depositary Receipts, Global Depositary Receipts or
other securities convertible into securities of corporations in which the
Portfolio is permitted to invest pursuant to its investment objectives and
policies. These securities may not necessarily be denominated in the same
currency into which they may be converted. Depositary receipts are receipts
typically issued by a U.S. or foreign bank or trust company and evidence
ownership of underlying securities issued by a foreign corporation. Because
American Depositary Receipts are listed on a U.S. securities exchange, the
investment advisers of the following Portfolios do not treat them as foreign
securities.

o Batterymarch Growth and Income
o BlackRock High Yield
o Goldman Sachs Mid Cap Value
o Legg Mason Partners Aggressive Growth
o Legg Mason Partners Managed Assets
o Legg Mason Value Equity
o Lord Abbett Bond Debenture
o Lord Abbett Growth and Income
o Lord Abbett Mid Cap Value
o RCM Technology

However, like other depositary receipts, American Depositary Receipts
are subject to many of the risks of foreign securities such as changes in
exchange rates and more limited information about foreign issuers.

o Turner Mid Cap Growth Portfolio does not expect to invest more than
10% of its total assets in American Depositary Receipts.

Dollar Roll Transactions. (Met/AIM Capital Appreciation, Met/AIM Small Cap
Growth, BlackRock High Yield, Met/Franklin Income, Lazard Mid Cap, Legg
Mason Partners Managed Assets, Legg Mason Value Equity, Loomis Sayles
Global Markets, Lord Abbett Bond Debenture, Oppenheimer Capital
Appreciation, PIMCO Inflation Protected Bond, PIMCO Total Return, Pioneer
Fund and Pioneer Strategic Income Portfolios)

Mortgage dollar rolls are transactions in which the Portfolio sells
securities for delivery in the current month and simultaneously contracts with
the same counter-party to repurchase similar (same type, coupon and maturity)
but not identical securities on a specified future date. During the roll period,
the Portfolio loses the right to receive principal (including prepayments of
principal) and interest paid on the securities sold. However, the Portfolio
would benefit to the extent of any difference between the price received for the
securities sold and the lower forward price for the future purchase (often
referred to as the "drop") or fee income plus the interest earned on the cash
proceeds of the securities sold until the settlement date of the forward
purchase. Unless such benefits exceed the income, capital appreciation and gain
or loss due to mortgage prepayments that would have been realized on the
securities sold as part of the mortgage dollar roll, the use of this technique
will diminish the investment performance of the Portfolio compared with what
such performance would have been without the use of mortgage dollar rolls.
Accordingly, the benefits derived from the use of mortgage dollar rolls depend
upon the Adviser's ability to manage mortgage prepayments. There is no assurance
that mortgage dollar rolls can be successfully employed. All cash proceeds will
be invested in instruments that are permissible investments for the Portfolio.
The Portfolio will maintain until the settlement date the segregation, either on
the records of the Adviser or with the Trust's custodian, of cash or other
liquid securities in an amount equal to the forward purchase price.

Event-Linked Bonds. (BlackRock High Yield, Met/Franklin Income, PIMCO
Inflation Protected Bond, PIMCO Total Return and Pioneer Strategic Income
Portfolios)

Each Portfolio may invest up to 5% of its net assets in "event-linked
bonds," which are fixed income securities for which the return of principal and
payment of interest is contingent on the non-occurrence of a specific "trigger"
event, such as a hurricane, earthquake, or other physical or weather-related
phenomenon. Some even-linked bonds are commonly referred to as "catastrophe
bonds." If a trigger event occurs, the Portfolio may lose a portion or all of
its principal invested in the bond. Event-linked bonds often provide for an
extension of maturity to process and audit loss claims where a trigger event
has, or possibly has, occurred. An extension of maturity may increase
volatility. Event-linked bonds may also expose the Portfolio to certain
unanticipated risks including credit risk, adverse regulatory or jurisdictional
interpretations, and adverse tax consequences. Event-linked bonds may also be
subject to liquidity risk.

Floaters. (BlackRock High Yield, BlackRock Large Cap Core, Met/Franklin
Income, Goldman Sachs Mid Cap Value, Janus Forty, Legg Mason Partners
Aggressive Growth, Legg Mason Partners Managed Assets, Legg Mason Value
Equity, Loomis Sayles Global Markets, Lord Abbett Bond Debenture, PIMCO
Inflation Protected Bond, PIMCO Total Return, Pioneer Fund and Pioneer
Strategic Income Portfolios)

A Portfolio may invest in floaters, which are fixed income securities
with a floating or variable rate of interest, i.e., the rate of interest varies
with changes in specified market rates or indices, such as the prime rate, or at
specified intervals. Certain floaters may carry a demand feature that permits
the holder to tender them back to the issuer of the underlying instrument, or to
a third party, at par value prior to maturity. When the demand feature of
certain floaters represents an obligation of a foreign entity, the demand
feature will be subject to certain risks discussed under "Foreign Securities."

Foreign Currency Transactions. (Met/AIM Capital Appreciation, Met/AIM Small
Cap Growth, BlackRock High Yield, BlackRock Large Cap Core, Clarion Global
Real Estate, Dreman Small Cap Value, Met/Franklin Mutual Shares, Goldman
Sachs Mid Cap Value, Harris Oakmark International, Janus Forty, Lazard Mid
Cap, Legg Mason Partners Aggressive Growth, Legg Mason Value Equity, Loomis
Sayles Global Markets, MFS(R) Emerging Markets Equity, MFS(R) Research
International, Oppenheimer Capital Appreciation, PIMCO Inflation Protected
Bond, PIMCO Total Return, Pioneer Fund, Pioneer Strategic Income, RCM
Technology, T. Rowe Price Mid Cap Growth, Met/Templeton Growth, Third
Avenue Small Cap Value and Van Kampen Mid Cap Growth Portfolios)

Foreign Currency Exchange Transactions. A Portfolio may engage in
foreign currency exchange transactions to protect against uncertainty in the
level of future exchange rates. The investment adviser to a Portfolio may engage
in foreign currency exchange transactions in connection with the purchase and
sale of portfolio securities ("transaction hedging"), and to protect the value
of specific portfolio positions ("position hedging").

A Portfolio may engage in "transaction hedging" to protect against a
change in the foreign currency exchange rate between the date on which the
Portfolio contracts to purchase or sell the security and the settlement date, or
to "lock in" the U.S. dollar equivalent of a dividend or interest payment in a
foreign currency. For that purpose, a Portfolio may purchase or sell a foreign
currency on a spot (or cash) basis at the prevailing spot rate in connection
with the settlement of transactions in portfolio securities denominated in or
exposed to that foreign currency.

If conditions warrant, a Portfolio may also enter into contracts to
purchase or sell foreign currencies at a future date ("forward contracts") and
purchase and sell foreign currency futures contracts as a hedge against changes
in foreign currency exchange rates between the trade and settlement dates on
particular transactions and not for speculation. A foreign currency forward
contract is a negotiated agreement to exchange currency at a future time at a
rate or rates that may be higher or lower than the spot rate. Foreign currency
futures contracts are standardized exchange-traded contracts and have margin
requirements.

For transaction hedging purposes, a Portfolio may also purchase
exchange-listed and over-the-counter call and put options on foreign currency
futures contracts and on foreign currencies. A put option on a futures contract
gives a Portfolio the right to assume a short position in the futures contract
until expiration of the option. A put option on currency gives a Portfolio the
right to sell a currency at an exercise price until the expiration of the
option. A call option on a futures contract gives a Portfolio the right to
assume a long position in the futures contract until the expiration of the
option. A call option on currency gives a Portfolio the right to purchase a
currency at the exercise price until the expiration of the option.

A Portfolio may engage in "position hedging" to protect against a
decline in the value relative to the U.S. dollar of the currencies in which its
portfolio securities are denominated, or quoted or exposed (or an increase in
the value of currency for securities which the Portfolio intends to buy, when it
holds cash reserves and short-term investments). For position hedging purposes,
a Portfolio may purchase or sell foreign currency futures contracts and foreign
currency forward contracts, and may purchase put or call options on foreign
currency futures contracts and on foreign currencies on exchanges or
over-the-counter markets. In connection with position hedging, a Portfolio may
also purchase or sell foreign currency on a spot basis.

The precise matching of the amounts of foreign currency exchange
transactions and the value of the portfolio securities involved will not
generally be possible since the future value of such securities in foreign
currencies will change as a consequence of market movements in the value of
those securities between the dates the currency exchange transactions are
entered into and the dates they mature.

It is impossible to forecast with precision the market value of
portfolio securities at the expiration or maturity of a forward or futures
contract. Accordingly, it may be necessary for a Portfolio to purchase
additional foreign currency on the spot market (and bear the expense of such
purchase) if the market value of the security or securities being hedged is less
than the amount of foreign currency the Portfolio is obligated to deliver and if
a decision is made to sell the security or securities and make delivery of the
foreign currency. Conversely, it may be necessary to sell on the spot market
some of the foreign currency received upon the sale of the portfolio security or
securities if the market value of such security or securities exceeds the amount
of foreign currency the Portfolio is obligated to deliver.

Hedging transactions involve costs and may result in losses. A
Portfolio may write covered call options on foreign currencies to offset some of
the costs of hedging those currencies. A Portfolio will engage in
over-the-counter transactions only when appropriate exchange-traded transactions
are unavailable and when, in the opinion of the Portfolio's investment adviser,
the pricing mechanism and liquidity are satisfactory and the participants are
responsible parties likely to meet their contractual obligations. A Portfolio's
ability to engage in hedging and related option transactions may be limited by
tax considerations.

Transaction and position hedging do not eliminate fluctuations in the
underlying prices of the securities which a Portfolio owns or intends to
purchase or sell. They simply establish a rate of exchange which one can achieve
at some future point in time. Additionally, although these techniques tend to
minimize the risk of loss due to a decline in the value of the hedged currency,
they tend to limit any potential gain which might result from the increase in
the value of such currency.

Currency Forward and Futures Contracts. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days from the date of the
contract as agreed by the parties, at a price set at the time of the contract.
In the case of a cancelable forward contract, the holder has the unilateral
right to cancel the contract at maturity by paying a specified fee. The
contracts are traded in the interbank market conducted directly between currency
traders (usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are charged at any
stage for trades. A foreign currency futures contract is a standardized contract
for the future delivery of a specified amount of a foreign currency at a future
date at a price set at the time of the contract. Foreign currency futures
contracts traded in the U.S. are designed by and traded on exchanges regulated
by the Commodity Futures Trading Commission ("CFTC"), such as the New York
Mercantile Exchange. A Portfolio would enter into foreign currency futures
contracts solely for hedging or other appropriate investment purposes as defined
in CFTC regulations. Open positions in forwards used for non-hedging purposes
will be covered if the Portfolio earmarks liquid assets or by the segregation
with the Trust's custodian of liquid assets and marked to market daily.

Forwards will be used primarily to adjust the foreign exchange exposure
of each Portfolio with a view to protecting against uncertainty in the level of
future foreign exchange rates, and the Portfolios might be expected to enter
into such contracts under the following circumstances:

Lock In. When the Adviser desires to lock in the U.S. dollar price on the
purchase or sale of a security denominated in a foreign currency.

Cross Hedge. If a particular currency is expected to decrease against
another currency, a Portfolio may sell the currency expected to decrease and
purchase a currency which is expected to increase against the currency sold in
an amount approximately equal to some or all of the Portfolio's holdings
denominated in the currency sold.

Direct Hedge. If the Adviser wants to eliminate substantially all of
the risk of owning a particular currency, and/or if the Adviser thinks that a
Portfolio can benefit from price appreciation in a given country's bonds but
does not want to hold the currency, it may employ a direct hedge back into the
U.S. dollar. In either case, a Portfolio would enter into a forward contract to
sell the currency in which a portfolio security is denominated and purchase U.S.
dollars at an exchange rate established at the time it initiated the contract.
The cost of the direct hedge transaction may offset most, if not all, of the
yield advantage offered by the foreign security, but a Portfolio would hope to
benefit from an increase (if any) in value of the bond.

Proxy Hedge. The Adviser might choose to use a proxy hedge, which may
be less costly than a direct hedge. In this case, a Portfolio, having purchased
a security, will sell a currency whose value is believed to be closely linked to
the currency in which the security is denominated. Interest rates prevailing in
the country whose currency was sold would be expected to be closer to those in
the U.S. and lower than those of securities denominated in the currency of the
original holding. This type of hedging entails greater risk than a direct hedge
because it is dependent on a stable relationship between the two currencies
paired as proxies and the relationships can be very unstable at times.

Forward foreign currency exchange contracts differ from foreign
currency futures contracts in certain respects. For example, the maturity date
of a forward contract may be any fixed number of days from the date of the
contract agreed upon by the parties, rather than a predetermined date in any
given month. Forward contracts may be in any amounts agreed upon by the parties
rather than predetermined amounts. Also, forward foreign exchange contracts are
traded directly between currency traders so that no intermediary is required. A
forward contract generally requires no margin or other deposit.

At the maturity of a forward or futures contract, a Portfolio may
either accept or make delivery of the currency specified in the contract, or at
or prior to maturity enter into a closing transaction involving the purchase or
sale of an offsetting contract. Closing transactions with respect to forward
contracts are usually effected with the currency trader who is a party to the
original forward contract. Closing transactions with respect to futures
contracts are effected on a commodities exchange; a clearing corporation
associated with the exchange assumes responsibility for closing out such
contracts.

Positions in foreign currency futures contracts may be closed out only
on an exchange or board of trade which provides a secondary market in such
contracts. Although a Portfolio intends to purchase or sell foreign currency
futures contracts only on exchanges or boards of trade where there appears to be
an active secondary market, there can be no assurance that a secondary market on
an exchange or board of trade will exist for any particular contract or at any
particular time. In such event, it may not be possible to close a futures
position and, in the event of adverse price movements, a Portfolio would
continue to be required to make daily cash payments of variation margin.

Foreign Currency Options. Options on foreign currencies operate
similarly to options on securities, and are traded primarily in the
over-the-counter market, although options on foreign currencies have recently
been listed on several exchanges. Such options will be purchased or written only
when a Portfolio's Adviser believes that a liquid secondary market exists for
such options. There can be no assurance that a liquid secondary market will
exist for a particular option at any specific time. Options on foreign
currencies are affected by all of those factors which influence foreign exchange
rates and investments generally.

The value of a foreign currency option is dependent upon the value of
the foreign currency and the U.S. dollar, and may have no relationship to the
investment merits of a foreign security. Because foreign currency transactions
occurring in the interbank market involve substantially larger amounts than
those that may be involved in the use of foreign currency options, investors may
be disadvantaged by having to deal in an odd lot market (generally consisting of
transactions of less than $1 million) for the underlying foreign currencies at
prices that are less favorable than for round lots.

There is no systematic reporting of last sale information for foreign
currencies and there is no regulatory requirement that quotations available
through dealers or other market sources be firm or revised on a timely basis.
Available quotation information is generally representative of very large
transactions in the interbank market and thus may not reflect relatively smaller
transactions (less than $1 million) where rates may be less favorable. The
interbank market in foreign currencies is a global, around-the-clock market. To
the extent that the U.S. options markets are closed while the markets for the
underlying currencies remain open, significant price and rate movements may take
place in the underlying markets that cannot be reflected in the options markets.

Foreign Currency Conversion. Although foreign exchange dealers do not
charge a fee for currency conversion, they do realize a profit based on the
difference (the "spread") between prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign currency to a
Portfolio at one rate, while offering a lesser rate of exchange should a
Portfolio desire to resell that currency to the dealer.

Foreign Securities. (All Portfolios)

A Portfolio may invest in foreign equity and debt securities or U.S.
securities traded in foreign markets. In addition to securities issued by
foreign companies, permissible investments may also consist of obligations of
foreign branches of U.S. banks and of foreign banks, including European
certificates of deposit, European time deposits, Canadian time deposits, Yankee
certificates of deposit, Eurodollar bonds and Yankee bonds. A Portfolio may also
invest in Canadian commercial paper and Europaper. These instruments may subject
a Portfolio to additional investment risks from those related to investments in
obligations of U.S. issuers. In addition, foreign branches of U.S. banks and
foreign banks may be subject to less stringent reserve requirements than those
applicable to domestic branches of U.S. banks.

Foreign investments involve certain risks that are not present in
domestic securities. For example, foreign securities may be subject to currency
risks or to foreign government taxes which reduce their attractiveness. There
may be less information publicly available about a foreign issuer than about a
U.S. issuer, and a foreign issuer is not generally subject to uniform
accounting, auditing and financial reporting standards and practices comparable
to those in the U.S. Other risks of investing in such securities include
political or economic instability in the country involved, the difficulty of
predicting international trade patterns and the possibility of imposition of
exchange controls. The prices of such securities may be more volatile than those
of domestic securities. With respect to certain foreign countries, there is a
possibility of expropriation of assets or nationalization, imposition of
withholding taxes on dividend or interest payments, difficulty in obtaining and
enforcing judgments against foreign entities or diplomatic developments which
could affect investment in these countries. Losses and other expenses may be
incurred in converting between various currencies in connection with purchases
and sales of foreign securities.

Foreign stock markets are generally not as developed or efficient as,
and may be more volatile than, those in the U.S. While growing in volume, they
usually have substantially less volume than U.S. markets and a Portfolio's
investment securities may be less liquid and subject to more rapid and erratic
price movements than securities of comparable U.S. companies. Equity securities
may trade at price/earnings multiples higher than comparable U.S. securities and
such levels may not be sustainable. There is generally less government
supervision and regulation of foreign stock exchanges, brokers, banks and listed
companies abroad than in the U.S. Moreover, settlement practices for
transactions in foreign markets may differ from those in U.S. markets. Such
differences may include delays beyond periods customary in the U.S. and
practices, such as delivery of securities prior to receipt of payment, which
increase the likelihood of a "failed settlement", which can result in losses to
a Portfolio.

The value of foreign investments and the investment income derived from
them may also be affected unfavorably by changes in currency exchange control
regulations. Although the Portfolios will invest only in securities denominated
in foreign currencies that are fully exchangeable into U.S. dollars without
legal restriction at the time of investment, there can be no assurance that
currency controls will not be imposed subsequently. In addition, the value of
foreign fixed income investments may fluctuate in response to changes in U.S.
and foreign interest rates.

Foreign brokerage commissions, custodial expenses and other fees are
also generally higher than for securities traded in the U.S. Consequently, the
overall expense ratios of international or global funds are usually somewhat
higher than those of typical domestic stock funds.

Fluctuations in exchange rates may also affect the earning power and
asset value of the foreign entity issuing a security, even one denominated in
U.S. dollars. Dividend and interest payments will be repatriated based on the
exchange rate at the time of disbursement, and restrictions on capital flows may
be imposed.

The debt obligations of foreign governments and entities may or may not
be supported by the full faith and credit of the foreign government. A Portfolio
may buy securities issued by certain "supra-national" entities, which include
entities designated or supported by governments to promote economic
reconstruction or development, international banking organizations and related
government agencies. Examples are the International Bank for Reconstruction and
Development (commonly called the "World Bank"), the Asian Development Bank and
the Inter-American Development Bank.

The governmental members of these supra-national entities are
"stockholders" that typically make capital contributions and may be committed to
make additional capital contributions if the entity is unable to repay its
borrowings. A supra-national entity's lending activities may be limited to a
percentage of its total capital, reserves and net income. There can be no
assurance that the constituent foreign governments will continue to be able or
willing to honor their capitalization commitments for those entities. Set forth
below is information regarding the percentage of each Portfolio's assets that
may be invested in foreign securities.

-------------------------------------------- ---------------------------------------------------
Intends to Invest No More Than the Following
Percentage of its Total Assets in Foreign
Portfolio Securities
-------------------------------------------- ---------------------------------------------------
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Met/AIM Capital Appreciation 25%
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Met/AIM Small Cap Growth 25%
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Batterymarch Growth and Income 20%

Clarion Global Real Estate No limit

Goldman Sachs Mid Cap Value 25% (of net assets)

Janus Forty No limit; however the Adviser currently intends to
invest up to 25% of its assets in foreign
securities. The Adviser does not consider
securities of companies domiciled outside the U.S.
but which conduct a majority of their business in
the U.S. and whose securities are traded on a U.S.
exchange to be "foreign securities."

Legg Mason Value Equity 25% (of net assets)

Lord Abbett Bond Debenture 20% (of net assets). The Adviser does not consider
securities of companies domiciled outside the U.S.
but whose principal trading market is in the U.S.
to be "foreign securities."

- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
Lord Abbett Growth and Income 20%. The Adviser does not consider securities of
companies domiciled outside the U.S. but whose
principal trading market is in the U.S. to be
"foreign securities."
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Lord Abbett Mid Cap Value 10%. The Adviser does not consider securities of
companies domiciled outside the U.S. but whose
principal trading market is in the U.S. to be
"foreign securities."
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- ------------------------------------------------------------------------------------------------------
MFS(R) Emerging Markets Equity No limit

Pioneer Fund 20%, no more than 5% in emerging markets

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Rainier Large Cap Equity Portfolio 25% . The Adviser intends to limit its investments
in foreign securities to U.S. dollar denominated
securities of foreign issuers or American
Depositary Receipts.
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T. Rowe Price Mid Cap Growth 25%

Van Kampen Comstock 25% (of net assets)

Securities of companies domiciled in Canada, Puerto Rico and the Caribbean
Islands, if primarily traded in the U.S. securities markets, are not considered
to be foreign securities. Eurodollar bank obligations are U.S.
dollar-denominated certificates of deposit and time deposits issued outside the
U.S. capital markets by foreign branches of U.S. banks and by foreign banks.
Yankee dollar bank obligations are U.S. dollar-denominated obligations issued in
the U.S. capital markets by foreign banks.

Eurodollar and Yankee dollar obligations are subject to the same risks
that pertain to domestic issues, notably credit risk. Additionally, Eurodollar
(and to a limited extent, Yankee dollar) obligations are subject to certain
sovereign risks in addition to the risks of foreign investments described below.

Emerging Market Securities. Investments in emerging market country
securities involve special risks. Political and economic structures in many of
such countries may be undergoing significant evolution and rapid development,
and such countries may lack the social, political and economic stability
characteristic of more developed countries. Certain of such countries may have
in the past failed to recognize private property rights and have at times
nationalized or expropriated the assets of private companies. As a result, the
risks described above, including the risks of nationalization or expropriation
of assets, may be heightened. In addition, unanticipated political or social
developments may affect the values of a Portfolio's investments in those
countries and the availability to a Portfolio of additional investments in those
countries. The small size and inexperience of the securities markets in certain
of such countries and the limited volume of trading in securities in those
countries may make a Portfolio's investments in such countries illiquid and more
volatile than investment in more developed countries, and a Portfolio may be
required to establish special custodial or other arrangements before making
certain investments in those countries. There may be little financial or
accounting information available with respect to issuers located in certain of
such countries, and it may be difficult as a result to assess the value or
prospects of an investment in such issuers.

Transaction costs in emerging markets may be higher than in the U.S.
and other developed securities markets. As legal systems in emerging markets
develop, foreign investors may be adversely affected by new or amended laws and
regulations or may not be able to obtain swift and equitable enforcement of
existing law.

A Portfolio may make investments denominated in emerging markets
currencies. Some countries in emerging markets also may have managed currencies,
which are not free floating against the U.S. dollar. In addition, emerging
markets are subject to the risk of restrictions upon the free conversion of
their currencies into other currencies. Any devaluations relative to the U.S.
dollar in the currencies in which the Portfolio's securities are quoted would
reduce the Portfolio's net asset value.

Certain emerging markets limit, or require governmental approval prior
to, investments by foreign persons. Repatriation of investment income and
capital from certain emerging markets is subject to certain governmental
consents. Even where there is no outright restriction on repatriation of
capital, the mechanics of repatriation may affect the operation of a Portfolio.

Forward Commitments, When-Issued and Delayed Delivery Securities (All
Portfolios except Met/Franklin Mutual Shares, Legg Mason Partners
Aggressive Growth and Met/Templeton Growth Portfolios)

A Portfolio may purchase securities on a when-issued or delayed
delivery basis and may purchase or sell securities on a forward commitment
basis. Settlement of such transactions normally occurs within a month or more
after the purchase or sale commitment is made.

A Portfolio may purchase securities under such conditions only with the
intention of actually acquiring them, but may enter into a separate agreement to
sell the securities before the settlement date. Since the value of securities
purchased may fluctuate prior to settlement, the Portfolio may be required to
pay more at settlement than the security is worth. In addition, the purchaser is
not entitled to any of the interest earned prior to settlement.

Upon making a commitment to purchase a security on a when-issued,
delayed delivery or forward commitment basis the Portfolio will hold liquid
assets in a segregated account at the Portfolio's custodian bank worth at least
the equivalent of the amount due. The liquid assets will be monitored on a daily
basis and adjusted as necessary to maintain the necessary value.

Purchases made under such conditions may involve the risk that yields
secured at the time of commitment may be lower than otherwise available by the
time settlement takes place, causing an unrealized loss to the Portfolio. In
addition, when the Portfolio engages in such purchases, it relies on the other
party to consummate the sale. If the other party fails to perform its
obligations, the Portfolio may miss the opportunity to obtain a security at a
favorable price or yield. Although a Portfolio will generally enter into forward
commitments to purchase securities with the intention of actually acquiring the
security for its portfolio (or for delivery pursuant to options contracts it has
entered into), the Portfolio may dispose of a security prior to settlement if
its investment adviser deems it advisable to do so. The Portfolio may realize
short-term gains or losses in connection with such sales.

High Yield/High Risk Debt Securities. (BlackRock High Yield, BlackRock
Large Cap Core, Dreman Small Cap Value, Met/Franklin Income,
Met/Franklin Mutual Shares, Goldman Sachs Mid Cap Value, Janus Forty,
Legg Mason Partners Managed Assets, Legg Mason Value Equity, Loomis
Sayles Global Markets, Lord Abbett Bond Debenture, MFS(R) Emerging
Markets Equity, PIMCO Inflation Protected Bond, PIMCO Total Return,
Pioneer Fund, Pioneer Strategic Income and Third Avenue Small Cap
Value Portfolios)

Certain lower rated securities purchased by a Portfolio, such as those
rated Ba or B by Moody's Investors Service, Inc. ("Moody's") or BB or B by
Standard & Poor's Ratings Services ("Standard & Poor's") (commonly known as junk
bonds), may be subject to certain risks with respect to the issuing entity's
ability to make scheduled payments of principal and interest and to greater
market fluctuations. While generally providing greater income than investments
in higher quality securities, lower quality fixed income securities involve
greater risk of loss of principal and income, including the possibility of
default or bankruptcy of the issuers of such securities, and have greater price
volatility, especially during periods of economic uncertainty or change. These
lower quality fixed income securities tend to be affected by economic changes
and short-term corporate and industry developments to a greater extent than
higher quality securities, which react primarily to fluctuations in the general
level of interest rates. To the extent that a Portfolio invests in such lower
quality securities, the achievement of its investment objective may be more
dependent on the Adviser's own credit analysis.

Lower quality fixed income securities are affected by the market's
perception of their credit quality, especially during times of adverse
publicity, and the outlook for economic growth. Economic downturns or an
increase in interest rates may cause a higher incidence of default by the
issuers of these securities, especially issuers that are highly leveraged. The
market for these lower quality fixed income securities is generally less liquid
than the market for investment grade fixed income securities. It may be more
difficult to sell these lower rated securities to meet redemption requests, to
respond to changes in the market, or to value accurately a Portfolio's portfolio
securities for purposes of determining the Portfolio's net asset value.

In determining suitability of investment in a particular unrated
security, the Adviser takes into consideration asset and debt service coverage,
the purpose of the financing, history of the issuer, existence of other rated
securities of the issuer, and other relevant conditions, such as comparability
to other issuers.

Set forth below is information regarding the policies of certain
Portfolios with respect to investments in high yield debt securities.

-------------------------------------------- --------------------------------------------------------
Portfolio
-------------------------------------------- --------------------------------------------------------
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BlackRock High Yield The high yield securities acquired by the Portfolio
will generally be in the lower rating categories of the
major rating services (BB or lower by Standard & Poor's
or Ba or lower by Moody's) or will be determined by the
Portfolio management team to be of similar quality.
Split rated bonds will be considered to have a higher
credit rating
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Janus Forty Intends to invest no more than 35% of its assets in high
yield debt securities
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Legg Mason Partners Managed The Portfolio has adopted an operating policy that Assets
prohibits it from purchasing any securities rated lower than
BBB by Standard & Poor's, Baa by Moody's or, if unrated by
such services, are, in the Adviser's opinion, of equivalent
quality, if as a result more than 10% of the Portfolio's
assets that are invested in debt securities would be
invested in such securities and the Portfolio does not
purchase any debt securities rated B or lower by either
service or their equivalent - for this purpose, debt
securities do not include convertible securities

- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Legg Mason Value Equity Intends to invest no more than 10% of its total assets
in high yield debt securities
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
MFS(R) Emerging Markets Equity Intends to invest no more than 10% of its net assets in
high yield debt securities
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Pioneer Fund Intends to invest no more than 5% of its total assets in
high yield debt securities
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Pioneer Strategic Income Intends to invest no more than 70% of its total assets
in high yield debt securities, but not more than 20% of
total assets will be invested in debt securities rated
below CCC by Standard & Poor's or the equivalent by
another nationally recognized statistical rating
organization, or determined to be of equivalent credit
quality by the Adviser
- ----------------------------------------------------------------------------------------------------------

Hybrid Instruments. (Met/AIM Capital Appreciation, Met/AIM Small Cap
Growth, BlackRock Large Cap Core, Met/Franklin Income, Met/Franklin
Mutual Shares, Goldman Sachs Mid Cap Value, Janus Forty, Lazard Mid
Cap, Legg Mason Partners Managed Assets, Legg Mason Value Equity,
Loomis Sayles Global Markets, PIMCO Inflation Protected Bond, PIMCO
Total Return, Pioneer Fund, Pioneer Strategic Income, RCM Technology,
T. Rowe Price Mid Cap Growth and Third Avenue Small Cap Value
Portfolios)

Although there are no percentage limitations on the amount of assets
that may be invested in hybrid instruments, the investment advisers to the
Portfolios do not anticipate that such investments will exceed 5% (10% with
respect to Pioneer Strategic Income and T. Rowe Price Mid Cap Growth Portfolios)
of each Portfolio's total assets. Hybrid instruments are a form of derivative
and combine the elements of futures contracts or options with those of debt,
preferred equity or a depository instrument. Often these hybrid instruments are
indexed to the price of a commodity, particular currency, or a domestic or
foreign debt or equity securities index. Hybrid instruments may take a variety
of forms, including, but not limited to, debt instruments with interest or
principal payments or redemption terms determined by reference to the value of a
currency or commodity or securities index at a future point in time, preferred
stock with dividend rates determined by reference to the value of a currency, or
convertible securities with the conversion terms related to a particular
commodity. Hybrid instruments may bear interest or pay dividends at below market
(or even relatively nominal) rates. Under certain conditions, the redemption
value of such an instrument could be zero. Hybrid instruments can have volatile
prices and limited liquidity and their use by a Portfolio may not be successful.

Illiquid Securities. (All Portfolios except Turner Mid Cap Growth
Portfolio)

Each Portfolio may invest up to 15% of its net assets in illiquid
securities and other securities which are not readily marketable, including
non-negotiable time deposits, certain restricted securities not deemed by the
Trust's Board of Trustees to be liquid and repurchase agreements with maturities
longer than seven days. Securities eligible for resale pursuant to Rule 144A
under the Securities Act of 1933, which have been determined to be liquid, will
not be considered by the Portfolios' investment advisers to be illiquid or not
readily marketable and, therefore, are not subject to the 15% limit. The
inability of a Portfolio to dispose of illiquid or not readily marketable
investments readily or at a reasonable price could impair the Portfolio's
ability to raise cash for redemptions or other purposes. The liquidity of
securities purchased by a Portfolio which are eligible for resale pursuant to
Rule 144A will be monitored by the Portfolios' investment advisers on an ongoing
basis, subject to the oversight of the Trustees. In the event that such a
security is deemed to be no longer liquid, a Portfolio's holdings will be
reviewed to determine what action, if any, is required to ensure that the
retention of such security does not result in a Portfolio having more than 15%
of its assets invested in illiquid or not readily marketable securities.

Inflation-Indexed Bonds. (BlackRock High Yield, Met/Franklin Income,
Met/Franklin Mutual Shares, Janus Forty, Legg Mason Partners Managed
Assets, Loomis Sayles Global Markets, PIMCO Inflation Protected Bond,
PIMCO Total Return, Pioneer Strategic Income and Met/Templeton Growth
Portfolios)

Inflation-indexed bonds are fixed income securities whose principal
value is periodically adjusted according to the rate of inflation. Two
structures are common. The U.S. Treasury and some other issuers use a structure
that accrues inflation into the principal value of the bond. Most other issuers
pay out the Consumer Price Index accruals as part of a semiannual coupon.

Inflation-indexed securities issued by the U.S. Treasury have
maturities of five, ten or thirty years, although it is possible that securities
with other maturities will be issued in the future. The U.S. Treasury securities
pay interest on a semi-annual basis, equal to a fixed percentage of the
inflation-adjusted principal amount. For example, if a Portfolio purchased an
inflation-indexed bond with a par value of $1,000 and a 3% real rate of return
coupon (payable 1.5% semi-annually), and inflation over the first six months was
1%, the mid-year par value of the bond would be $1,010 and the first semi-annual
interest payment would be $15.15 ($1,010 times 1.5%). If inflation during the
second half of the year resulted in the whole year's inflation equaling 3%, the
end-of-year par value of the bond would be $1,030 and the second semi-annual
interest payment would be $15.45 ($1,030 times 1.5%).

If the periodic adjustment rate measuring inflation falls, the
principal value of inflation-indexed bonds will be adjusted downward, and
consequently the interest payable on these securities (calculated with respect
to a smaller principal amount) will be reduced. Repayment of the original bond
principal upon maturity (as adjusted for inflation) is guaranteed in the case of
U.S. Treasury inflation-indexed bonds, even during a period of deflation.
However, the current market value of the bonds is not guaranteed, and will
fluctuate. The Portfolio may also invest in other inflation related bonds which
may or may not provide a similar guarantee. If a guarantee of principal is not
provided, the adjusted principal value of the bond repaid at maturity may be
less than the original principal.

The value of inflation-indexed bonds is expected to change in response
to changes in real interest rates. Real interest rates in turn are tied to the
relationship between nominal interest rates and the rate of inflation.
Therefore, if inflation were to rise at a faster rate than nominal interest
rates, real interest rates might decline, leading to an increase in value of
inflation-indexed bonds. In contrast, if nominal interest rates increased at a
faster rate than inflation, real interest rates might rise, leading to a
decrease in value of inflation-indexed bonds.

While these securities are expected to be protected from long-term
inflationary trends, short-term increases in inflation may lead to a decline in
value. If interest rates rise due to reasons other than inflation (for example,
due to changes in currency exchange rates), investors in these securities may
not be protected to the extent that the increase is not reflected in the bond's
inflation measure.

The periodic adjustment of U.S. inflation-indexed bonds is tied to the
Consumer Price Index for Urban Consumers ("CPI-U"), which is calculated monthly
by the U.S. Bureau of Labor Statistics. The CPI-U is a measurement of changes in
the cost of living, made up of components such as housing, food, transportation
and energy. Inflation-indexed bonds issued by a foreign government are generally
adjusted to reflect a comparable inflation index, calculated by that government.
There can be no assurance that the CPI-U or any foreign inflation index will
accurately measure the real rate of inflation in the prices of goods and
services. Moreover, there can be no assurance that the rate of inflation in a
foreign country will be correlated to the rate of inflation in the United
States.

Interest Rate Transactions. (Met/AIM Capital Appreciation, BlackRock
High Yield, Met/Franklin Income, Janus Forty, Legg Mason Partners
Managed Assets, Loomis Sayles Global Markets, Oppenheimer Capital
Appreciation, PIMCO Inflation Protected Bond, PIMCO Total Return and
Pioneer Strategic Income Portfolios)

Among the strategic transactions into which the Portfolios may enter
are interest rate swaps and the purchase or sale of related caps and floors. A
Portfolio expects to enter into these transactions primarily to preserve a
return or spread on a particular investment or portion of its portfolio, to
protect against currency fluctuations, as a duration management technique or to
protect against any increase in the price of securities the Portfolio
anticipates purchasing at a later date. A Portfolio intends to use these
transactions as hedges and not as speculative investments and will not sell
interest rate caps or floors where it does not own securities or other
instruments providing the income stream the Portfolio may be obligated to pay.
Interest rate swaps involve the exchange by a Portfolio with another party of
their respective commitments to pay or receive interest, e.g., an exchange of
floating rate payments for fixed rate payments with respect to a notional amount
of principal. A currency swap is an agreement to exchange cash flows on a
notional amount of two or more currencies based on the relative value
differential among them and an index swap is an agreement to swap cash flows on
a notional amount based on changes in the values of the reference indices. The
purchase of a cap entitles the purchaser, to the extent that a specific index
exceeds a predetermined interest rate, to receive payments of interest on a
notional principal amount from the party selling such cap. The purchase of a
floor entitles the purchaser to receive payments on a notional principal amount
from the party selling such floor to the extent that a specified index falls
below a predetermined interest rate or amount.

A Portfolio will usually enter into swaps on a net basis, i.e., the two
payment streams are netted out in a cash settlement on the payment date or dates
specified in the instrument, with the Portfolio receiving or paying, as the case
may be, only the net amount of the two payments. Inasmuch as these swaps, caps
and floors are entered into for good faith hedging purposes, the Advisers to the
Portfolios and the Trust believe such obligations do not constitute senior
securities under the 1940 Act and, accordingly, will not treat them as being
subject to its borrowing restrictions. A Portfolio will not enter into any swap,
cap and floor transaction unless, at the time of entering into such transaction,
the unsecured long-term debt of the counterparty, combined with any credit
enhancements, is rated at least "A" by Standard & Poor's or Moody's or has an
equivalent rating from another nationally recognized statistical rating
organization ("NRSRO") or is determined to be of equivalent credit quality by
the investment adviser. For a description of the NRSROs and their ratings, see
the Appendix. If there is a default by the counterparty, a Portfolio may have
contractual remedies pursuant to the agreements related to the transaction. The
swap market has grown substantially in recent years with a large number of banks
and investment banking firms acting both as principals and as agents utilizing
standardized swap documentation. As a result, the swap market has become
relatively liquid. Caps and floors are more recent innovations for which
standardized documentation has not yet been fully developed and, accordingly,
they are less liquid than swaps.

With respect to swaps, a Portfolio will accrue the net amount of the
excess, if any, of its obligations over its entitlements with respect to each
swap on a daily basis and will segregate an amount of cash or liquid high grade
securities having a value equal to the accrued excess. Caps and floors require
segregation of assets with a value equal to the Portfolio's net obligations, if
any.

For purposes of applying a Portfolio's investment policies and
restrictions (as stated in the Prospectus and this Statement of Additional
Information) swap agreements are generally valued by the Portfolio at market
value. In the case of a credit default swap sold by a Portfolio (i.e., where the
Portfolio is selling credit default protection), however, the Portfolio will
generally value the swap at its notional amount. The manner in which certain
securities or other instruments are valued by the Portfolio for purposes of
applying investment policies and restrictions may differ from the manner in
which those investments are valued by other types of investors.

Investment Grade Corporate Debt Securities. (Met/AIM Capital
Appreciation, Met/AIM Small Cap Growth, BlackRock High Yield,
BlackRock Large Cap Core, Clarion Global Real Estate, Dreman Small Cap
Value, Met/Franklin Income, Met/Franklin Mutual Shares, Goldman Sachs
Mid Cap Value, Janus Forty, Lazard Mid Cap, Legg Mason Partners
Aggressive Growth, Legg Mason Partners Managed Assets, Legg Mason
Value Equity, Loomis Sayles Global Markets, Lord Abbett Bond
Debenture, Lord Abbett Growth and Income, MFS(R) Emerging Markets
Equity, MFS(R) Research International, Oppenheimer Capital
Appreciation, PIMCO Inflation Protected Bond, PIMCO Total Return,
Pioneer Fund, Pioneer Strategic Income, RCM Technology, T. Rowe Price
Mid Cap Growth, Met/Templeton Growth, Third Avenue Small Cap Value,
and Van Kampen Comstock Portfolios)

Debt securities are rated by NRSROs. Securities rated BBB by Standard &
Poor's or Baa by Moody's are considered investment grade securities, but are
somewhat riskier than higher rated investment grade obligations because they are
regarded as having only an adequate capacity to pay principal and interest, and
are considered to lack outstanding investment characteristics and may be
speculative. See Appendix A for a description of the various securities ratings.

Loans and Other Direct Indebtedness. (BlackRock High Yield,
Met/Franklin Income, Met/Franklin Mutual Shares, Janus Forty, Lord
Abbett Bond Debenture, Loomis Sayles Global Markets, MFS(R) Emerging
Markets Equity, Oppenheimer Capital Appreciation, PIMCO Inflation
Protected Bond, PIMCO Total Return, Pioneer Fund, Pioneer Strategic
Income, T. Rowe Price Mid Cap Growth and Met/Templeton Growth
Portfolios)

By purchasing a loan, a Portfolio acquires some or all of the interest
of a bank or other lending institution in a loan to a corporate borrower. Many
such loans are secured, and most impose restrictive covenants which must be met
by the borrower. These loans are made generally to finance internal growth,
mergers, acquisitions, stock repurchases, leveraged buy-outs and other corporate
activities. Such loans may be in default at the time of purchase. A Portfolio
may also purchase trade or other claims against companies, which generally
represent money owed by the company to a supplier of goods or services. These
claims may also be purchased at a time when the company is in default. Certain
of the loans acquired by a Portfolio may involve revolving credit facilities or
other standby financing commitments which obligate the Portfolio to pay
additional cash on a certain date or on demand.

The highly leveraged nature of many such loans may make such loans
especially vulnerable to adverse changes in economic or market conditions. Loans
and other direct investments may not be in the form of securities or may be
subject to restrictions on transfer, and only limited opportunities may exist to
resell such instruments. As a result, a Portfolio may be unable to sell such
investments at an opportune time or may have to resell them at less than fair
market value.

Money Market Securities. (All Portfolios)

Money market securities in which the Portfolios may invest include U.S.
government securities, U.S. dollar denominated instruments (such as bankers'
acceptances, commercial paper, domestic or Yankee certificates of deposit and
Eurodollar obligations) issued or guaranteed by bank holding companies in the
U.S., their subsidiaries and their foreign branches. These bank obligations may
be general obligations of the parent bank holding company or may be limited to
the issuing entity by the terms of the specific obligation or by government
regulation.

Other money market securities in which a Portfolio may invest also
include certain variable and floating rate instruments and participations in
corporate loans to corporations in whose commercial paper or other short-term
obligations a Portfolio may invest. Because the bank issuing the participations
does not guarantee them in any way, they are subject to the credit risks
generally associated with the underlying corporate borrower. To the extent that
a Portfolio may be regarded as a creditor of the issuing bank (rather than of
the underlying corporate borrower under the terms of the loan participation),
the Portfolio may also be subject to credit risks associated with the issuing
bank. The secondary market, if any, for these loan participations is extremely
limited and any such participations purchased by a Portfolio will be regarded as
illiquid.

A Portfolio may also invest in bonds and notes with remaining
maturities of thirteen months or less, variable rate notes and variable amount
master demand notes. A variable amount master demand note differs from ordinary
commercial paper in that it is issued pursuant to a written agreement between
the issuer and the holder, its amount may be increased from time to time by the
holder (subject to an agreed maximum) or decreased by the holder or the issuer,
it is payable on demand, the rate of interest payable on it varies with an
agreed formula and it is typically not rated by a rating agency. Transfer of
such notes is usually restricted by the issuer, and there is no secondary
trading market for them. Any variable amount master demand note purchased by a
Portfolio will be regarded as an illiquid security.

Generally, the Portfolios will invest only in high quality money market
instruments, i.e., securities which have been assigned the highest quality
ratings by NRSROs such as "A-1" by Standard & Poor's or "Prime-1" by Moody's, or
if not rated, determined to be of comparable quality by the Portfolio's
investment adviser.

The following Portfolios may invest in money market instruments rated
A-3 by Standard & Poor's and Prime-3 by Moody's.

o Dreman Small Cap
o Harris Oakmark International
o Janus Forty
o Legg Mason Partners Aggressive Growth
o Loomis Sayles Global Markets
o Lord Abbett Bond Debenture
o Lord Abbett Growth and Income
o Lord Abbett Mid Cap Value

o PIMCO Inflation Protected Bond Portfolio

o PIMCO Total Return
o Goldman Sachs Mid Cap Value Portfolio may invest in money
market instruments rated A-2 by Standard & Poor's and Prime-2
by Moody's.
o Pioneer Fund and Pioneer Strategic Income may also invest in
these instruments if they are rated below investment grade in
accordance with their investment objective, policies and
restrictions

Met/Franklin Income generally will only invest in money market
instruments that have been assigned at least a "Caa" by Moody's or a "CCC" by
Standard & Poor's, or if not rated, determined to be of comparable quality by
the Portfolio's investment adviser.

Mortgage-Backed Securities. (Met/AIM Capital Appreciation, Met/AIM
Small Cap Growth, BlackRock High Yield, Met/Franklin Income,
Met/Franklin Mutual Shares, Goldman Sachs Mid Cap Value, Janus Forty,
Lazard Mid Cap, Legg Mason Partners Managed Assets, Legg Mason Value
Equity, Loomis Sayles Global Markets, Lord Abbett Bond Debenture,
MFS(R) Research International, PIMCO Inflation Protected Bond, PIMCO
Total Return, Pioneer Fund, Pioneer Strategic Income, T. Rowe Price
Mid Cap Growth and Third Avenue Small Cap Value Portfolios)

A mortgage-backed security may be an obligation of the issuer backed by
a mortgage or pool of mortgages or a direct interest in an underlying pool of
mortgages. Certain Portfolios may invest in CMOs and stripped mortgage-backed
securities that represent a participation in, or are secured by, mortgage loans.
Some mortgage-backed securities, such as CMOs, make payments of both principal
and interest at a variety of intervals; others make semi-annual interest
payments at a predetermined rate and repay principal at maturity (like a typical
bond). Mortgage-backed securities are based on different types of mortgages
including those on commercial real estate or residential properties.

CMOs may be issued by a U.S. government agency or instrumentality or by
a private issuer. Although payment of the principal of, and interest on, the
underlying collateral securing privately issued CMOs may be guaranteed by the
U.S. government or its agencies or instrumentalities, these CMOs represent
obligations solely of the private issuer and are not insured or guaranteed by
the U.S. government, its agencies or instrumentalities or any other person or
entity. Prepayments could cause early retirement of CMOs. CMOs are designed to
reduce the risk of prepayment for investors by issuing multiple classes of
securities (or "tranches"), each having different maturities, interest rates and
payment schedules, and with the principal and interest on the underlying
mortgages allocated among the several classes in various ways. Payment of
interest or principal on some classes or series of CMOs may be subject to
contingencies or some classes or series may bear some or all of the risk of
default on the underlying mortgages. CMOs of different classes or series are
generally retired in sequence as the underlying mortgage loans in the mortgage
pool are repaid. If enough mortgages are repaid ahead of schedule, the classes
or series of a CMO with the earliest maturities generally will be retired prior
to their maturities. Thus, the early retirement of particular classes or series
of a CMO held by a Portfolio would have the same effect as the prepayment of
mortgages underlying other mortgage-backed securities. Conversely, slower than
anticipated prepayments can extend the effective maturities of CMOs subjecting
them to a greater risk of decline in market value in response to rising interest
rates than traditional debt securities, and, therefore, potentially increasing
the volatility of a Portfolio that invests in CMOs.

The value of mortgage-backed securities may change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues. Mortgage-backed securities have yield and maturity
characteristics corresponding to the underlying assets. Unlike traditional debt
securities, which may pay a fixed rate of interest until maturity, when the
entire principal amount comes due, payments on certain mortgage-backed
securities include both interest and a partial repayment of principal. Besides
the scheduled repayment of principal, repayments of principal may result from
the voluntary prepayment, refinancing, or foreclosure of the underlying mortgage
loans.

Mortgage-backed securities are subject to prepayment risk. Prepayment,
which occurs when unscheduled or early payments are made on the underlying
mortgages, may shorten the effective maturities of these securities and may
lower their returns. If property owners make unscheduled prepayments of their
mortgage loans, these prepayments will result in early payment of the applicable
mortgage-related securities. In that event, the Portfolios, may be unable to
invest the proceeds from the early payment of the mortgage-related securities in
an investment that provides as high a yield as the mortgage-related securities.
Consequently, early payment associated with mortgage-related securities may
cause these securities to experience significantly greater price and yield
volatility than that experienced by traditional fixed income securities. The
occurrence of mortgage prepayments is affected by factors including the level of
interest rates, general economic conditions, the location and age of the
mortgage and other social and demographic conditions. During periods of falling
interest rates, the rate of mortgage prepayments tends to increase, thereby
tending to decrease the life of mortgage-related securities. During periods of
rising interest rates, the rate of mortgage prepayments usually decreases,
thereby tending to increase the life of mortgage-related securities. If the life
of a mortgage-related security is inaccurately predicted, a Portfolio may not be
able to realize the rate of return it expected.

Mortgage-backed securities are less effective than other types of
securities as a means of "locking in" attractive long-term interest rates. One
reason is the need to reinvest prepayments of principal; another is the
possibility of significant unscheduled prepayments resulting from declines in
interest rates. Prepayments may cause losses on securities purchased at a
premium. At times, some of the mortgage-backed securities in which a Portfolio
may invest will have higher than market interest rates and, therefore, will be
purchased at a premium above their par value. Unscheduled prepayments, which are
made at par, will cause a Portfolio to experience a loss equal to any
unamortized premium.

Stripped mortgage-backed securities are created when a U.S. government
agency or a financial institution separates the interest and principal
components of a mortgage-backed security and sells them as individual
securities. The securities may be issued by agencies or instrumentalities of the
U.S. government and private originators of, or investors in, mortgage loans,
including savings and loan associations, mortgage banks, commercial banks,
investment banks and special purpose entities of the foregoing. Stripped
mortgage-backed securities are usually structured with two classes that receive
different portions of the interest and principal distributions on a pool of
mortgage loans. The holder of the "principal-only" security ("PO") receives the
principal payments made by the underlying mortgage-backed security while the
holder of the "interest-only" security ("IO") receives interest payments from
the same underlying security. The Portfolios may invest in both the IO class and
the PO class. The prices of stripped mortgage-backed securities may be
particularly affected by changes in interest rates. The yield to maturity on an
IO class of stripped mortgage-backed securities is extremely sensitive not only
to changes in prevailing interest rates but also to the rate of the principal
payments (including prepayments) on the underlying assets. As interest rates
fall, prepayment rates tend to increase, which tends to reduce prices of IOs and
increase prices of POs. Rising interest rates can have the opposite effect.

Prepayments may also result in losses on stripped mortgage-backed
securities. A rapid rate of principal prepayments may have a measurable adverse
effect on a Portfolio's yield to maturity to the extent it invests in IOs. If
the assets underlying the IO experience greater than anticipated prepayments of
principal, a Portfolio may fail to recoup fully its initial investments in these
securities. Conversely, POs tend to increase in value if prepayments are greater
than anticipated and decline if prepayments are slower than anticipated. The
secondary market for stripped mortgage-backed securities may be more volatile
and less liquid than that for other mortgage-backed securities, potentially
limiting the Portfolios' ability to buy and sell those securities at any
particular time.

In the case of privately issued mortgage-related securities, the Trust
takes the position that such instruments do not represent interests in any
particular industry or group of industries.

Municipal Fixed Income Securities. (BlackRock High Yield, Met/Franklin
Income, Legg Mason Partners Managed Assets, Loomis Sayles Global
Markets, PIMCO Inflation Protected Bond, PIMCO Total Return, Pioneer
Fund and Pioneer Strategic Income Portfolios)

A Portfolio may invest in municipal bonds of any state, territory or
possession of the U.S., including the District of Columbia. The Portfolio may
also invest in municipal bonds of any political subdivision, agency or
instrumentality (e.g., counties, cities, towns, villages, districts,
authorities) of the U.S. or its possessions. Municipal bonds are debt
instruments issued by or for a state or local government to support its general
financial needs or to pay for special projects such as airports, bridges,
highways, public transit, schools, hospitals, housing and water and sewer works
including residual interest bonds. Interest payments received by holders of
these securities are generally tax-free. Municipal bonds may also be issued to
refinance public debt.

Municipal bonds are mainly divided between "general obligation" and
"revenue" bonds. General obligation bonds are backed by the full faith and
credit of governmental issuers with the power to tax. They are repaid from the
issuer's general revenues. Payment, however, may be dependent upon legislative
approval and may be subject to limitations on the issuer's taxing power.
Enforcement of payments due under general obligation bonds varies according to
the law applicable to the issuer. In contrast, revenue bonds are supported only
by the revenues generated by the project or facility.

A Portfolio may also invest in industrial development bonds. Such bonds
are usually revenue bonds issued to pay for facilities with a public purpose
operated by private corporations. The credit quality of industrial development
bonds is usually directly related to the credit standing of the owner or user of
the facilities. To qualify as a municipal bond, the interest paid on an
industrial development bond must qualify as fully exempt from federal income
tax. However, the interest paid on an industrial development bond may be subject
to the federal alternative minimum tax.

The yields on municipal bonds depend on such factors as market
conditions, the financial condition of the issuer and the issue's size, maturity
date and rating. Municipal bonds are rated by Standard & Poor's, Moody's and
Fitch Investor Services, Inc. Such ratings, however, are opinions, not absolute
standards of quality. Municipal bonds with the same maturity, interest rates and
rating may have different yields, while municipal bonds with the same maturity
and interest rate, but different ratings, may have the same yield. Once
purchased by the Portfolio, a municipal bond may cease to be rated or receive a
new rating below the minimum required for purchase by the Portfolio. Neither
event would require the Portfolio to sell the bond, but the Portfolio's
investment adviser would consider such events in determining whether the
Portfolio should continue to hold it.

The ability of the Portfolio to achieve its investment objective
depends upon the continuing ability of the issuers of municipal bonds to pay
interest and principal when due. Municipal bonds are subject to the provisions
of bankruptcy, insolvency and other laws affecting the rights and remedies of
creditors. Such laws extend the time for payment of principal and/or interest,
and may otherwise restrict the Portfolio's ability to enforce its rights in the
event of default. Since there is generally less information available on the
financial condition of municipal bond issuers compared to other domestic issuers
of securities, the Portfolio's investment adviser may lack sufficient knowledge
of an issue's weaknesses. Other influences, such as litigation, may also
materially affect the ability of an issuer to pay principal and interest when
due. In addition, the market for municipal bonds is often thin and can be
temporarily affected by large purchases and sales, including those by the
Portfolio.

From time to time, Congress has considered restricting or eliminating
the federal income tax exemption for interest on municipal bonds. Such actions
could materially affect the availability of municipal bonds and the value of
those already owned by the Portfolio. If such legislation were passed, the
Trust's Board of Trustees may recommend changes in the Portfolio's investment
objectives and policies.

Options and Futures Strategies. (All Portfolios)

A Portfolio may seek to increase the current return on its investments
by writing covered call or covered put options. In addition, a Portfolio may at
times seek to hedge against either a decline in the value of its portfolio
securities or an increase in the price of securities which its Adviser plans to
purchase through the writing and purchase of options including options on stock
indices and the purchase and sale of futures contracts and related options.
Expenses and losses incurred as a result of such hedging strategies will reduce
a Portfolio's current return.

The Advisers to the following Portfolios do not presently intend to
utilize options or futures contracts and related options but may do so in the
future.

o Harris Oakmark International
o Legg Mason Partners Aggressive Growth
o Lord Abbett Bond Debenture
o Lord Abbett Growth and Income
o Lord Abbett Mid Cap Value

The ability of a Portfolio to engage in the options and futures
strategies described below will depend on the availability of liquid markets in
such instruments. Markets in options and futures with respect to stock indices
and U.S. government securities are relatively new and still developing. It is
impossible to predict the amount of trading interest that may exist in various
types of options or futures. Therefore no assurance can be given that a
Portfolio will be able to utilize these instruments effectively for the purposes
stated below.

Writing Covered Options on Securities. A Portfolio may write covered
call options and covered put options on optionable securities of the types in
which it is permitted to invest from time to time as its investment adviser
determines is appropriate in seeking to attain the Portfolio's investment
objective. Call options written by a Portfolio give the holder the right to buy
the underlying security from the Portfolio at a stated exercise price; put
options give the holder the right to sell the underlying security to the
Portfolio at a stated price.

A Portfolio may only write call options on a covered basis or for
cross-hedging purposes and will only write covered put options. A put option
would be considered "covered" if the Portfolio owns an option to sell the
underlying security subject to the option having an exercise price equal to or
greater than the exercise price of the "covered" option at all times while the
put option is outstanding. A call option is covered if the Portfolio owns or has
the right to acquire the underlying securities subject to the call option (or
comparable securities satisfying the cover requirements of securities exchanges)
at all times during the option period. A call option is for cross-hedging
purposes if it is not covered, but is designed to provide a hedge against
another security which the Portfolio owns or has the right to acquire. In the
case of a call written for cross-hedging purposes or a put option, the Portfolio
will maintain in a segregated account at the Trust's custodian bank or earmark
liquid assets with a value equal to or greater than the Portfolio's obligation
under the option. A written call option is also covered if the Portfolio
maintains in a segregated bank account at the Trust's custodian bank or earmarks
liquid assets with the value equal to or greater than the Portfolio's obligation
under the option. A Portfolio may also write combinations of covered puts and
covered calls on the same underlying security.

A Portfolio will receive a premium from writing an option, which
increases the Portfolio's return in the event the option expires unexercised or
is terminated at a profit. The amount of the premium will reflect, among other
things, the relationship of the market price of the underlying security to the
exercise price of the option, the term of the option, and the volatility of the
market price of the underlying security. By writing a call option, a Portfolio
will limit its opportunity to profit from any increase in the market value of
the underlying security above the exercise price of the option. By writing a put
option, a Portfolio will assume the risk that it may be required to purchase the
underlying security for an exercise price higher than its then current market
price, resulting in a potential capital loss if the purchase price exceeds the
market price plus the amount of the premium received.

A Portfolio may terminate an option which it has written prior to its
expiration by entering into a closing purchase transaction in which it purchases
an option having the same terms as the option written. The Portfolio will
realize a profit (or loss) from such transaction if the cost of such transaction
is less (or more) than the premium received from the writing of the option.
Because increases in the market price of a call option will generally reflect
increases in the market price of the underlying security, any loss resulting
from the repurchase of a call option may be offset in whole or in part by
unrealized appreciation of the underlying security owned by the Portfolio.

Purchasing Put and Call Options on Securities. A Portfolio may purchase
put options to protect its portfolio holdings in an underlying security against
a decline in market value. This protection is provided during the life of the
put option since the Portfolio, as holder of the put, is able to sell the
underlying security at the exercise price regardless of any decline in the
underlying security's market price. For the purchase of a put option to be
profitable, the market price of the underlying security must decline
sufficiently below the exercise price to cover the premium and transaction
costs. By using put options in this manner, any profit which the Portfolio might
otherwise have realized on the underlying security will be reduced by the
premium paid for the put option and by transaction costs.

A Portfolio may also purchase a call option to hedge against an
increase in price of a security that it intends to purchase. This protection is
provided during the life of the call option since the Portfolio, as holder of
the call, is able to buy the underlying security at the exercise price
regardless of any increase in the underlying security's market price. For the
purchase of a call option to be profitable, the market price of the underlying
security must rise sufficiently above the exercise price to cover the premium
and transaction costs. By using call options in this manner, any profit which
the Portfolio might have realized had it bought the underlying security at the
time it purchased the call option will be reduced by the premium paid for the
call option and by transaction costs.

Except for the following Portfolios, no Portfolio intends to purchase
put or call options if, as a result of any such transaction, the aggregate cost
of options held by the Portfolio at the time of such transaction would exceed 5%
of its total assets.

o Met/AIM Capital Appreciation Portfolio - no specific limitation
(but not for speculative purposes)
o Dreman Small Cap (but not if, as a result of any such
transaction, the aggregate cost of options held by the
Portfolio at the time of such transaction would exceed 10% of
its total assets)
o Goldman Sachs Mid Cap Value - no specific limitation
o Janus Forty (but not if, as a result of any such transaction,
the aggregate cost of options held by the Portfolio at the
time of such transaction would exceed 10% of its total assets)
o Loomis Sayles Global Markets - no specific limitation o PIMCO
Inflation Protected Bond - no specific limitation
o PIMCO Total Return - no specific limitation
o Pioneer Fund (although no specific limitation on investing in
derivatives, the Portfolio does not use derivatives as a primary
investment technique and generally limits their use to hedging)
o Pioneer Strategic Income (although no specific limitation on
investing in derivatives, the Portfolio does not use derivatives
as a primary investment technique and generally limits their
use to hedging)
o RCM Technology - no specific limitation

The Met/AIM Capital Appreciation and Met/AIM Small Cap Growth
Portfolios will not write (sell) options if, immediately after such sale, the
aggregate value of securities or obligations underlying the outstanding options
exceeds 20% of the Portfolios' total assets.

Purchase and Sale of Options and Futures on Stock Indices. A Portfolio
may purchase and sell options on stock indices and stock index futures contracts
either as a hedge against movements in the equity markets or for other
investment purposes.

Options on stock indices are similar to options on specific securities
except that, rather than the right to take or make delivery of the specific
security at a specific price, an option on a stock index gives the holder the
right to receive, upon exercise of the option, an amount of cash if the closing
level of that stock index is greater than, in the case of a call, or less than,
in the case of a put, the exercise price of the option. This amount of cash is
equal to such difference between the closing price of the index and the exercise
price of the option expressed in dollars times a specified multiple. The writer
of the option is obligated, in return for the premium received, to make delivery
of this amount. Unlike options on specific securities, all settlements of
options on stock indices are in cash and gain or loss depends on general
movements in the stocks included in the index rather than price movements in
particular stocks. Currently options traded include the Standard & Poor's 500
Composite Stock Price Index, the NYSE Composite Index, the AMEX Market Value
Index, the NASDAQ 100 Index, the Nikkei 225 Stock Average Index, the Financial
Times Stock Exchange 100 Index and other standard broadly based stock market
indices. Options are also traded in certain industry or market segment indices
such as the Pharmaceutical Index.

A stock index futures contract is an agreement in which one party
agrees to deliver to the other an amount of cash equal to a specific dollar
amount times the difference between the value of a specific stock index at the
close of the last trading day of the contract and the price at which the
agreement is made. No physical delivery of securities is made.

If a Portfolio's Adviser expects general stock market prices to rise,
it might purchase a call option on a stock index or a futures contract on that
index as a hedge against an increase in prices of particular equity securities
it wants ultimately to buy for the Portfolio. If in fact the stock index does
rise, the price of the particular equity securities intended to be purchased may
also increase, but that increase would be offset in part by the increase in the
value of the Portfolio's index option or futures contract resulting from the
increase in the index. If, on the other hand, the Portfolio's Adviser expects
general stock market prices to decline, it might purchase a put option or sell a
futures contract on the index. If that index does in fact decline, the value of
some or all of the equity securities held by the Portfolio may also be expected
to decline, but that decrease would be offset in part by the increase in the
value of the Portfolio's position in such put option or futures contract.

Purchase and Sale of Interest Rate Futures A Portfolio may purchase and
sell interest rate futures contracts on fixed income securities or indices of
such securities, including municipal indices and any other indices of fixed
income securities that may become available for trading either for the purpose
of hedging its portfolio securities against the adverse effects of anticipated
movements in interest rates or for other investment purposes.

A Portfolio may sell interest rate futures contracts in anticipation of
an increase in the general level of interest rates. Generally, as interest rates
rise, the market value of the securities held by a Portfolio will fall, thus
reducing the net asset value of the Portfolio. This interest rate risk can be
reduced without employing futures as a hedge by selling such securities and
either reinvesting the proceeds in securities with shorter maturities or by
holding assets in cash. However, this strategy entails increased transaction
costs in the form of dealer spreads and brokerage commissions and would
typically reduce the Portfolio's average yield as a result of the shortening of
maturities.

The sale of interest rate futures contracts provides a means of hedging
against rising interest rates. As rates increase, the value of a Portfolio's
short position in the futures contracts will also tend to increase thus
offsetting all or a portion of the depreciation in the market value of the
Portfolio's investments that are being hedged. While the Portfolio will incur
commission expenses in selling and closing out futures positions (which is done
by taking an opposite position in the futures contract), commissions on futures
transactions are lower than transaction costs incurred in the purchase and sale
of portfolio securities.

A Portfolio may purchase interest rate futures contracts in
anticipation of a decline in interest rates when it is not fully invested. As
such purchases are made, it is expected that an equivalent amount of futures
contracts will be closed out.

A Portfolio will enter into futures contracts which are traded on
national or foreign futures exchanges, and are standardized as to maturity date
and the underlying financial instrument. Futures exchanges and trading in the
U.S. are regulated under the Commodity Exchange Act by the CFTC. Futures are
traded in London at the London International Financial Futures Exchange, in
Paris at the MATIF, and in Tokyo at the Tokyo Stock Exchange.

With respect to futures contracts that are not legally required to
"cash settle," a Portfolio may cover the open position by setting aside or
earmarking liquid assets in an amount equal to the market value of the futures
contract. With respect to futures that are required to "cash settle," however, a
Portfolio is permitted to set aside or earmark liquid assets in an amount equal
to the Portfolio's daily marked to market (net) obligation, if any, (in other
words, the Portfolio's daily net liability, if any) rather than the market value
of the futures contract. By setting aside assets equal to only its net
obligation under cash-settled futures, a Portfolio will have the ability to
employ leverage to a greater extent than if the Portfolio were required to
segregate assets equal to the full market value of the futures contract.

Options on Futures Contracts A Portfolio may purchase and write call
and put options on stock index and interest rate futures contracts. A Portfolio
may use such options on futures contracts in connection with its hedging
strategies in lieu of purchasing and writing options directly on the underlying
securities or stock indices or purchasing or selling the underlying futures. For
example, a Portfolio may purchase put options or write call options on stock
index futures or interest rate futures, rather than selling futures contracts,
in anticipation of a decline in general stock market prices or rise in interest
rates, respectively, or purchase call options or write put options on stock
index or interest rate futures, rather than purchasing such futures, to hedge
against possible increases in the price of equity securities or debt securities,
respectively, which the Portfolio intends to purchase.

In connection with transactions in stock index options, stock index
futures, interest rate futures and related options on such futures, a Portfolio
will be required to deposit as "initial margin" an amount of cash and short-term
U.S. government securities. The current initial margin requirements per contract
ranges from approximately 2% to 10% of the contract amount. Thereafter,
subsequent payments (referred to as "variation margin") are made to and from the
broker to reflect changes in the value of the futures contract. Brokers may
establish deposit requirements higher than exchange minimums.

Risks of Options and Futures Strategies The effective use of options
and futures strategies depends, among other things, on a Portfolio's ability to
terminate options and futures positions at times when its investment adviser
deems it desirable to do so. Although a Portfolio will not enter into an option
or futures position unless its Adviser believes that a liquid market exists for
such option or future, there can be no assurance that a Portfolio will be able
to effect closing transactions at any particular time or at an acceptable price.
The Advisers generally expect that options and futures transactions for the
Portfolios will be conducted on recognized exchanges. However, a Portfolio may
also purchase and sell options in the over-the-counter market. The staff of the
Securities and Exchange Commission considers over-the-counter options to be
illiquid. A Portfolio's ability to terminate option positions established in the
over-the-counter market may be more limited than in the case of exchange traded
options and may also involve the risk that securities dealers participating in
such transactions would fail to meet their obligations to the Portfolio.

The use of options and futures involves the risk of imperfect
correlation between movements in options and futures prices and movements in the
price of the securities that are the subject of the hedge. The successful use of
these strategies also depends on the ability of a Portfolio's Adviser to
forecast correctly interest rate movements and general stock market price
movements. This risk increases as the composition of the securities held by the
Portfolio diverges from the composition of the relevant option or futures
contract.

Other Investment Companies. (All Portfolios except Met/Templeton
Growth and Turner Mid Cap Growth Portfolios)

Except as provided below, in connection with its investments in
accordance with the various investment disciplines, a Portfolio may invest up to
10% of its total assets in shares of other investment companies (including
exchange-traded funds such as Standard & Poor's Depository Receipts ("SPDRs")
and iSharesSM as defined below) but may neither invest more than 5% of its total
assets in any one investment company nor acquire more than 3% of the voting
securities of such other investment company. A Portfolio will indirectly bear
its proportionate share of any management fees and other expenses paid by
investment companies in which it invests in addition to the management fees (and
other expenses) paid by the Portfolio. Because of restrictions on direct
investment by U.S. entities in certain countries, other investment companies may
provide the most practical or only way for a Portfolio to invest in certain
markets. Such investments may involve the payment of substantial premiums above
the net asset value of those investment companies' portfolio securities. A
Portfolio also may incur tax liability to the extent it invests in the stock of
a foreign issuer that is a "passive foreign investment company" regardless of
whether such "passive foreign investment company" makes distributions to the
Portfolio. Each Portfolio does not intend to invest in other investment
companies unless, in the Adviser's judgment, the potential benefits exceed
associated costs.

Exchange-traded funds are shares of unaffiliated investment companies
issuing shares which are traded like traditional equity securities on a national
stock exchange or the National Association of Securities Dealers Automated
Quotations System ("NASDAQ") National Market System. SPDRs are interests in a
unit investment trust ("UIT") that may be obtained from the UIT or purchased in
the secondary market (SPDRs are listed on the American Stock Exchange). The UIT
was established to accumulate and hold a portfolio of common stocks that is
intended to track the price performance and dividend yield of the Standard &
Poor's 500 Composite Stock Price Index (the "S&P 500"). The UIT is sponsored by
a subsidiary of the AMEX. SPDRs may be used for several reasons, including, but
not limited to, facilitating the handling of cash flows or trading or reducing
transaction costs. The price movement of SPDRs may not perfectly parallel the
price activity of the S&P 500. The UIT will issue SPDRs in aggregations known as
"Creation Units" in exchange for a "Portfolio Deposit" consisting of (i) a
portfolio of securities substantially similar to the component securities
("Index Securities") of the S&P 500, (ii) a cash payment equal to a pro rata
portion of the dividends accrued on the UIT's portfolio securities since the
last dividend payment by the UIT, a net of expenses and liabilities, and (iii) a
cash payment or credit ("Balancing Amount") designed to equalize the net asset
value of the S&P Index and the net asset value of Portfolio Deposit.

SPDRs are not individually redeemable, except upon termination of the
UIT. To redeem, an investor must accumulate enough SPDRs to reconstitute a
Creation Unit. The liquidity of small holdings of SPDRs, therefore, will depend
upon the existence of a secondary market. Upon redemption of a Creation Unit, an
investor will receive Index Securities and cash identical to the Portfolio
Deposit required of an investor wishing to purchase a Creation Unit that day.

The price of SPDRs is derived from and based upon the securities held
by the UIT. Accordingly, the level of risk involved in the purchase or sale of a
SPDR is similar to the risk involved in the purchase or sale of traditional
common stock, with the exception that the pricing mechanism for SPDRs is based
on a basket of stocks. Disruptions in the markets for the securities underlying
SPDRs purchased or sold by the Portfolios could result in losses on SPDRs.

A Portfolio may, subject to the limitations stated above, invest in
iSharesSM and similar securities that invest in securities included in specified
indices, including the MSCI indices for various countries and regions. iSharesSM
are listed on the AMEX and were initially offered to the public in 1996. The
market prices of iSharesSM are expected to fluctuate in accordance with both
changes in the net asset values ("NAV") of their underlying indices and supply
and demand of iSharesSM on the AMEX. However, iSharesSM have a limited operating
history and information is lacking regarding the actual performance and trading
liquidity of iSharesSM for extended periods or over complete market cycles. In
addition, there is no assurance that the requirements of the AMEX necessary to
maintain the listing of iSharesSM will continue to be met or will remain
unchanged. In the event substantial market or other disruptions affecting
iSharesSM should occur in the future, the liquidity and value of a Portfolio's
shares could also be substantially and adversely affected. If such disruptions
were to occur, a Portfolio could be required to reconsider the use of iSharesSM
as part of its investment strategy.

Each Allocation Portfolio invests substantially all of its assets in the
securities of other investment companies.

Portfolio Turnover

While it is impossible to predict portfolio turnover rates, the
Advisers to the Portfolios do not anticipate the turnover rate to exceed 100%,
except as follows.

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Turnover Rate Portfolio
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Over 100% PIMCO Inflation Protected Bond and PIMCO Total Return
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Under 150% Legg Mason Partners Managed Assets (equity portion)

Under 200% Batterymarch Growth and Income, Legg Mason Partners Managed Assets,
Turner Mid Cap Growth and Van Kampen Mid Cap Growth

Preferred Stocks (All Portfolios except Legg Mason Partners Aggressive
Growth and Turner Mid Cap Growth Portfolios)

A Portfolio may purchase preferred stock. Preferred stock, unlike
common stock, has a stated dividend rate payable from the corporation's
earnings. Preferred stock dividends may be cumulative or non-cumulative,
participating, or auction rate. "Cumulative" dividend provisions require all or
a portion of prior unpaid dividends to be paid.

If interest rates rise, the fixed dividend on preferred stocks may be
less attractive, causing the price of preferred stocks to decline. Preferred
stock may have mandatory sinking fund provisions, as well as call/redemption
provisions prior to maturity, which can be a negative feature when interest
rates decline. Preferred stock also generally has a preference over common stock
on the distribution of a corporation's assets in the event of liquidation of the
corporation. Preferred stock may be "participating" stock, which means that it
may be entitled to a dividend exceeding the stated dividend in certain cases.
The rights of preferred stock on distribution of a corporation's assets in the
event of a liquidation are generally subordinate to the rights associated with a
corporation's debt securities.

Real Estate Investment Trusts. (All Portfolios except BlackRock High
Yield, Harris Oakmark International, Legg Mason Partners Aggressive
Growth and Van Kampen Comstock Portfolios)

Except as set forth below, a Portfolio may invest up to 5% of its net
assets in investments related to real estate, including real estate investment
trusts ("REITs").

The following Portfolios may invest up to 10% of their total assets in
REITs.

o Met/Franklin Income

o T. Rowe Price Mid Cap Growth

o Van Kampen Comstock
o Van Kampen Mid Cap Growth

The following Portfolios may invest up to 15% of their total assets in
REITs.

o Met/AIM Small Cap Growth
o Dreman Small Cap Value
o Met/Franklin Mutual Shares
o Lazard Mid Cap
o Legg Mason Value Equity
o Loomis Sayles Global Markets
o Oppenheimer Capital Appreciation

The following Portfolio may invest up to 20% of its net assets in
REITs.

o Pioneer Fund

The following Portfolios may invest in REITs without limit.

o Clarion Global Real Estate
o Goldman Sachs Mid Cap Value
o PIMCO Inflation Protected Bond
o PIMCO Total Return
o Pioneer Strategic Income

Risks associated with investments in securities of companies in the
real estate industry include: decline in the value of real estate; risks related
to general and local economic conditions; overbuilding and increased
competition; increases in property taxes and operating expenses; changes in
zoning laws; casualty or condemnation losses; variations in rental income;
changes in neighborhood values; the appeal of properties to tenants; and
increases in interest rates. In addition, equity REITs may be affected by
changes in the values of the underlying property owned by the trusts, while
mortgage real estate investment trusts may be affected by the quality of credit
extended. REITs are dependent upon management skills, may not be diversified and
are subject to the risks of financing projects. Such REITs are also subject to
heavy cash flow dependency, defaults by borrowers, self liquidation and the
possibility of failing to qualify for tax-free pass-through of income under the
Internal Revenue Code of 1986, as amended (the "Code") and to maintain exemption
from the 1940 Act. In the event an issuer of debt securities collateralized by
real estate defaults, it is conceivable that the REITs could end up holding the
underlying real estate.

Repurchase Agreements. (All Portfolios except Met/Templeton Growth
Portfolio)

Each of the Portfolios may enter into repurchase agreements with a
bank, broker-dealer, or other financial institution but no Portfolio may invest
more than 15% of its net assets in illiquid securities, including repurchase
agreements having maturities of greater than seven days. A Portfolio may enter
into repurchase agreements, provided the Trust's custodian always has possession
of securities serving as collateral whose market value at least equals the
amount of the repurchase obligation. To minimize the risk of loss a Portfolio
will enter into repurchase agreements only with financial institutions which are
considered by its investment adviser to be creditworthy. If an institution
enters an insolvency proceeding, the resulting delay in liquidation of the
securities serving as collateral could cause a Portfolio some loss, as well as
legal expense, if the value of the securities declines prior to liquidation.

Reverse Repurchase Agreements. (All Portfolios except BlackRock Large
Cap Core, Clarion Global Real Estate, Met/Franklin Income,
Met/Franklin Mutual Shares, Goldman Sachs Mid Cap Value, Harris
Oakmark International, MFS(R) Emerging Markets Equity, MFS(R) Research
International, Rainier Large Cap Equity, T. Rowe Price Mid Cap Growth,
Turner Mid Cap Growth, Met/Templeton Growth and Van Kampen Comstock
Portfolios)

A Portfolio may enter into reverse repurchase agreements with brokers,
dealers, domestic and foreign banks or other financial institutions. In a
reverse repurchase agreement, the Portfolio sells a security and agrees to
repurchase it at a mutually agreed upon date and price, reflecting the interest
rate effective for the term of the agreement. It may also be viewed as the
borrowing of money by the Portfolio. The Portfolio's investment of the proceeds
of a reverse repurchase agreement is the speculative factor known as leverage.
Leverage may cause any gains or losses of the Portfolio to be magnified. The
Portfolio may enter into a reverse repurchase agreement only if the interest
income from investment of the proceeds is greater than the interest expense of
the transaction and the proceeds are invested for a period no longer than the
term of the agreement. At the time a Portfolio enters into a reverse repurchase
agreement, it will earmark, or establish and maintain a segregated account with
an approved custodian containing, cash or other liquid securities having a value
not less than the repurchase price (including accrued interest). If interest
rates rise during a reverse repurchase agreement, it may adversely affect the
Portfolio's net asset value. Reverse repurchase agreements are considered to be
borrowings under the 1940 Act.

The assets contained in the segregated account will be marked-to-market
daily and additional assets will be placed in such account on any day in which
the assets fall below the repurchase price (plus accrued interest). A
Portfolio's liquidity and ability to manage its assets might be affected when it
sets aside cash or portfolio securities to cover such commitments. Reverse
repurchase agreements involve the risk that the market value of the securities
retained in lieu of sale may decline below the price of the securities a
Portfolio has sold but is obligated to repurchase. In the event the buyer of
securities under a reverse repurchase agreement files for bankruptcy or becomes
insolvent, such buyer or its trustee or receiver may receive an extension of
time to determine whether to enforce a Portfolio's obligation to repurchase the
securities, and a Portfolio's use of the proceeds of the reverse repurchase
agreement may effectively be restricted pending such decision.

Rights and Warrants. (All Portfolios except Rainier Large Cap Equity
Portfolio)

A Portfolio may purchase rights and warrants. Warrants basically are
options to purchase equity securities at specific prices valid for a specific
period of time. Their prices do not necessarily move parallel to the prices of
the underlying securities. Rights are similar to warrants, but normally have a
short duration and are distributed directly by the issuer to its shareholders.
Rights and warrants have no voting rights, receive no dividends and have no
rights with respect to the assets of the issuer. These investments carry the
risk that they may be worthless to the Portfolio at the time it may exercise its
rights, due to the fact that the underlying securities have a market value less
than the exercise price.

Low Exercise Price Call Warrants are used to gain exposure to stocks in
difficult to access local markets. The warrants typically have a strike price
set where the value of the warrants will be identical to the price of the
underlying stock price. The value of the warrants fluctuate in line with the
value of the underlying stock price and therefore, the risk and return profile
of the warrants is virtually the same as owning the underlying securities. The
warrants have no voting rights. Dividends issued to the warrant issuer by the
underlying company will be distributed to the warrant holders, net of any taxes
or commissions imposed by the local jurisdiction in respect of the receipt of
such amount. In addition, the warrants are not exchangeable into the ordinary
shares of the underlying stock. Low Exercise Price Call Warrants are typically
sold in private placement transactions and may be classified as derivative
instruments.

Securities Loans. (All Portfolios)

All securities loans will be made pursuant to agreements requiring the
loans to be continuously secured by collateral in cash or high grade debt
obligations at least equal at all times to the market value of the loaned
securities. The borrower pays to the Portfolios an amount equal to any dividends
or interest received on loaned securities. The Portfolios retain all or a
portion of the interest received on investment of cash collateral or receive a
fee from the borrower. Lending portfolio securities involves risks of delay in
recovery of the loaned securities or in some cases loss of rights in the
collateral should the borrower fail financially.

Securities loans are made to broker-dealers or institutional investors
or other persons, pursuant to agreements requiring that the loans be
continuously secured by collateral at least equal at all times to the value of
the loaned securities marked-to-market on a daily basis. The collateral received
will consist of cash, U.S. government securities, letters of credit or such
other collateral as may be permitted under a Portfolio's securities lending
program. While the securities are being loaned, a Portfolio will continue to
receive the equivalent of the interest or dividends paid by the issuer on the
securities, as well as interest on the investment of the collateral or a fee
from the borrower. A Portfolio has a right to call each loan and obtain the
securities on five business days' notice or, in connection with securities
trading on foreign markets, within such longer period for purchases and sales of
such securities in such foreign markets. A Portfolio will generally not have the
right to vote securities while they are being loaned, but its Manager or Adviser
will call a loan in anticipation of any important vote. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delay in receiving additional collateral or in the recovery of the
securities or possible loss of rights in the collateral should the borrower fail
financially. Loans will only be made to firms deemed by a Portfolio's Adviser to
be of good standing and will not be made unless, in the judgment of the Adviser,
the consideration to be earned from such loans would justify the risk.

Short Sales. (Met/AIM Capital Appreciation, Met/AIM Small Cap Growth,
BlackRock Large Cap Core, Met/Franklin Mutual Shares, Janus Forty,
Lazard Mid Cap, Legg Mason Value Equity, Loomis Sayles Global Markets,
MFS(R) Emerging Markets Equity, MFS(R) Research International, PIMCO
Inflation Protected Bond, PIMCO Total Return, Pioneer Fund, Pioneer
Strategic Income, RCM Technology and T. Rowe Price Mid Cap Growth
Portfolios)

A Portfolio may enter into a "short sale" of securities in
circumstances in which, at the time the short position is open, the Portfolio
owns an equal amount of the securities sold short or owns preferred stocks or
debt securities, convertible or exchangeable without payment of further
consideration, into an equal number of securities sold short. This kind of short
sale, which is referred to as one "against the box," may be entered into by each
Portfolio to, for example, lock in a sale price for a security the Portfolio
does not wish to sell immediately.

The following Portfolios may make short sales of a security they do not
own.

o Janus Forty (up to 8% of its total assets)
o PIMCO Inflation Protected Bond
o PIMCO Total Return
o RCM Technology

To complete such a transaction, the Portfolio must borrow the security
to make delivery to the buyer. The Portfolio then is obligated to replace the
security borrowed by purchasing it at market price at the time of replacement.
The price at such time may be more or less than the price at which the security
was sold by the Portfolio. Until the security is replaced, the Portfolio is
required to pay to the lender any dividends or interest which accrue during the
period of the loan. To borrow the security, the Portfolio also may be required
to pay a premium, which would increase the cost of the security sold. The
proceeds of the short sale will be retained by the broker, to the extent
necessary to meet margin requirements, until the short position is closed out.
Until the Portfolio replaces a borrowed security, the Portfolio will segregate
with its custodian, or earmark, cash or other liquid assets at such a level that
(i) the amount segregated, or earmark, plus the amount deposited with the broker
as collateral will equal the current value of the security sold short and (ii)
the amount segregated plus the amount deposited with the broker as collateral
will not be less than the market value of the security at the time it was sold
short. The Portfolio will incur a loss as a result of the short sale if the
price of the security increases between the date of the short sale and the date
on which the Portfolio replaces the borrowed security. The Portfolio will
realize a gain if the security declines in price between those dates. This
result is the opposite of what one would expect from a cash purchase of a long
position in a security. The amount of any gain will be decreased, and the amount
of any loss increased, by the amount of any premium, dividends or interest the
Portfolio may be required to pay in connection with a short sale. No more than
one third of the Portfolio's net assets will be, when added together: (i)
deposited as collateral for the obligation to replace securities borrowed to
effect short sales; and (ii) segregated in connection with short sales.

Structured Notes. (Met/AIM Capital Appreciation, Met/Franklin Income,
Goldman Sachs Mid Cap Value, Janus Forty, Legg Mason Partners Managed
Assets, Legg Mason Value Equity, Loomis Sayles Global Markets, Lord
Abbett Bond Debenture, PIMCO Inflation Protected Bond, PIMCO Total
Return, Pioneer Fund, Pioneer Strategic Income, T. Rowe Price Mid Cap
Growth and Met/Templeton Growth Portfolios)

Structured notes are derivatives on which the amount of principal
repayment and/or interest payments is based upon the movement of one or more
factors. Structured notes are interests in entities organized and operated
solely for the purpose of restructuring the investment characteristics of debt
obligations. This type of restructuring involves the deposit with or purchase by
an entity, such as a corporation or trust, of specified securities backed by, or
representing interests in, the underlying instruments. The cash flow on the
underlying instruments may be apportioned among the newly issued structured
notes to create securities with different investment characteristics such as
varying maturities, payment priorities and interest rate provisions, and the
extent of the payment made with respect to structured notes is dependent on the
extent of the cash flow on the underlying instruments. Certain issuers of
structured notes may be deemed to be "investment companies" as defined in the
1940 Act. As a result, a Portfolio's investment in these structured notes may be
limited by restrictions contained in the 1940 Act. Structured notes are
typically sold in private placement transactions, and there currently is no
active trading market for structured notes.

Credit Linked Notes. The BlackRock High Yield, Met/Franklin Income,
Janus Forty, Loomis Sayles Global Markets, PIMCO Inflation Protected Bond, PIMCO
Total Return, Pioneer Fund and Pioneer Strategic Income Portfolios may also
purchase credit linked notes ("CLNs"). A CLN is an instrument in which a special
purpose entity (the "Note Issuer") issues a structured note that is intended to
replicate a corporate bond or portfolios of corporate bonds. The purchaser of
the CLN invests a par amount and receives a payment during the term of the CLN
that equals a fixed or floating rate of interest equivalent to that of a highly
rated asset (such as a bank certificate of deposit) plus an additional premium
that relates to taking on the credit risk of an identified bond (the "Reference
Bond"). Upon maturity of the CLN, the purchaser will receive payment equal to
(1) the original par amount paid to the Note Issuer, if there was neither a
default on the Reference Bond nor a restructuring of the issuer of the Reference
Bond, or (2) the value of the Reference Bond, if there has been such a default
or restructuring. Depending on the terms of the CLN, it is also possible that
the purchaser may be required to take physical delivery of the Reference Bond in
the event of a default or restructuring. In addition to being subject to the
risks relating to the Reference Bond, the purchaser of a CLN may be subject to
the credit risk of the Note Issuer. In addition, there may not be a secondary
market for the CLN even though such a market exists for the Reference Board.

Swaps. (Met/AIM Capital Appreciation, Met/AIM Small Cap Growth,
BlackRock High Yield, Clarion Global Real Estate, Met/Franklin Mutual
Shares, Janus Forty, Loomis Sayles Global Markets, Lord Abbett Bond
Debenture, Lord Abbett Growth and Income, Lord Abbett Mid Cap Value,
MFS(R) Emerging Markets Equity, MFS(R) Research International, PIMCO
Inflation Protected Bond, PIMCO Total Return, Pioneer Fund, Pioneer
Strategic Income, RCM Technology and Met/Templeton Growth Portfolios)

Swap contracts are derivatives in the form of a contract or other
similar instrument, which is an agreement to exchange the return generated by
one instrument for the return generated by another instrument. The payment
streams are calculated by reference to a specified index and agreed upon
notional amount. The term "specified index" includes, but is not limited to,
currencies, fixed interest rates, prices and total return on interest rate
indices, fixed income indices, stock indices and commodity indices (as well as
amounts derived from arithmetic operations on these indices). For example, a
Portfolio may agree to swap the return generated by a fixed income index for the
return generated by a second fixed income index. The currency swaps in which a
Portfolio may enter will generally involve an agreement to pay interest streams
in one currency based on a specified index in exchange for receiving interest
streams denominated in another currency. Such swaps may involve initial and
final exchanges that correspond to the agreed upon notional amount.

A Portfolio will usually enter into swaps on a net basis, i.e., the two
payment streams are netted out in a cash settlement on the payment date or dates
specified in the instrument, with the Portfolio receiving or paying, as the case
may be, only the net amount of the two payments. A Portfolio's obligations under
a swap agreement will be accrued daily (offset against any amounts owing to the
Portfolio) and any accrued by unpaid net amounts owed to a swap counterparty
will be covered by designating the segregation, either on its records or with
the Trust's custodian, of cash or other liquid assets, to avoid any potential
leveraging of a Portfolio. To the extent that the net amounts owed to a swap
counterparty are covered with such liquid assets, the Advisers believe such
obligations do not constitute "senior securities" under the 1940 Act and
accordingly, the Adviser will not treat them as being subject to a Portfolio's
borrowing restrictions. A Portfolio may enter into OTC swap transactions with
counterparties that are approved by the Advisers in accordance with guidelines
established by the Board of Trustees. These guidelines provide for a minimum
credit rating for each counterparty and various credit enhancement techniques
(for example, collateralization of amounts due from counterparties) to limit
exposure to counterparties that have lower credit ratings.

The swaps in which a Portfolio may engage may include instruments under
which one party pays a single or periodic fixed amount(s) (or premium), and the
other party pays periodic amounts based on the movement of a specified index.
Swaps do not involve the delivery of securities, other underlying assets, or
principal. Accordingly, the risk of loss with respect to swaps is limited to the
net amount of payments the Portfolio is contractually obligated to make. If the
other party to a swap defaults, the Portfolio's risk of loss consists of the net
amount of payments that the Portfolio contractually is entitled to receive.
Currency swaps usually involve the delivery of the entire principal value of one
designated currency in exchange for the other designated currency. Therefore,
the entire principal value of a currency swap is subject to the risk that the
other party to the swap will default on its contractual delivery obligations. If
there is a default by the counterparty, a Portfolio may have contractual
remedies pursuant to the agreements related to the transaction. The swap market
has grown substantially in recent years with a large number of banks and
investment banking firms acting both as principals and as agents utilizing
standardized swap documentation. As a result, the swap market has become
relatively liquid. Certain swap transactions involve more recent innovations for
which standardized documentation has not yet been fully developed and,
accordingly, they are less liquid than traditional swap transactions.

The use of swaps is a highly specialized activity that involves
investment techniques and risks different from those associated with ordinary
portfolio securities transactions. If an Adviser is incorrect in its forecasts
of market values, interest rates, and currency exchange rates, the investment
performance of the Portfolio would be less favorable than it would have been if
this investment technique were not used.

U.S. Government Securities. (All Portfolios)

Securities issued or guaranteed as to principal and interest by the
U.S. government or its agencies and government-sponsored entities include U.S.
Treasury obligations, consisting of bills, notes and bonds, which principally
differ in their interest rates, maturities and times of issuance, and
obligations issued or guaranteed by agencies and government-sponsored entities
which are supported by (i) the full faith and credit of the U.S. Treasury (such
as securities of the Government National Mortgage Association), (ii) the limited
authority of the issuer to borrow from the U.S. Treasury or (iii) the authority
of the U.S. government to purchase certain obligations of the issuer (such as
securities of the Federal National Mortgage Association). No assurance can be
given that the U.S. government will provide financial support to U.S. government
agencies or government-sponsored entities as described in clauses (ii) or (iii)
above in the future, other than as set forth above, since it is not obligated to
do so by law.

Zero Coupon Bonds, Deferred Interest Bonds and PIK Bonds. (Met/AIM
Capital Appreciation, BlackRock High Yield, Met/Franklin Income,
Met/Franklin Mutual Shares, Goldman Sachs Mid Cap Value, Janus Forty,
Legg Mason Partners Managed Assets, Legg Mason Value Equity, Loomis
Sayles Global Markets, Lord Abbett Bond Debenture, MFS(R) Emerging
Markets Equity, Oppenheimer Capital Appreciation, PIMCO Inflation
Protected Bond, PIMCO Total Return, Pioneer Fund, Pioneer Strategic
Income and Third Avenue Small Cap Value Portfolios)

Zero coupon and deferred interest bonds are debt obligations which are
issued at a significant discount from face value. The discount approximates the
total amount of interest the bonds will accrue and compound over the period
until maturity or the first interest payment date at a rate of interest
reflecting the market rate of the security at the time of issuance. While zero
coupon bonds do not require the periodic payment of interest, deferred interest
bonds provide for a period of delay before the regular payment of interest
begins. Payment-in-kind ("PIK") bonds are debt obligations which provide that
the issuer thereof may, at its option, pay interest on such bonds in cash or in
the form of additional debt obligations. Such investments benefit the issuer by
mitigating its need for cash to meet debt service, but also require a higher
rate of return to attract investors who are willing to defer receipt of such
cash. Such investments may experience greater volatility in market value due to
changes in interest rates than debt obligations which make regular payments of
interest. A Portfolio will accrue income on such investments for tax and
accounting purposes, as required, which is distributable to shareholders and
which, because no cash is received at the time of accrual, may require the
liquidation of other portfolio securities to satisfy the Portfolio's
distribution obligations.

INVESTMENT RESTRICTIONS

Fundamental Policies.

The following investment restrictions are fundamental policies, which
may not be changed without the approval of a majority of the outstanding shares
of the Portfolio. As provided in the 1940 Act, a vote of a majority of the
outstanding shares necessary to amend a fundamental policy means the affirmative
vote of the lesser of (1) 67% or more of the shares present at a meeting, if the
holders of more than 50% of the outstanding shares of the Portfolio are present
or represented by proxy, or (2) more than 50% of the outstanding shares of the
Portfolio.

1. Borrowing

Each Portfolio may not borrow money, except to the extent permitted by
applicable law.

2. Diversification

Except as noted, each Portfolio may not purchase a security if, as a
result, with respect to 75% (50% with respect to Legg Mason Partners Aggressive
Growth Portfolio) of the value of its total assets (i) more than 5% of the value
of the Portfolio's total assets would be invested in the securities of a single
issuer, except securities issued or guaranteed by the U.S. government, its
agencies and instrumentalities, or (ii) more than 10% of the outstanding voting
securities of any issuer would be held by the Portfolio, other than securities
issued by the U.S. government, its agencies and instrumentalities. (The American
Funds Balanced Allocation, American Funds Growth Allocation, American Funds
Moderate Allocation, Met/Franklin Templeton Founding Strategy, Janus Forty, Legg
Mason Value Equity, MetLife Aggressive Strategy, MetLife Balanced Strategy,
MetLife Defensive Strategy, MetLife Growth Strategy, MetLife Moderate Strategy,
Strategic Conservative Growth, Strategic Growth, Strategic Growth and Income
Portfolios, as non-diversified funds, are not subject to any fundamental policy
which limits their investments in a single issuer.)

3. Concentration

Each Portfolio other than Clarion Global Real Estate may not invest
more than 25% of the value of its total assets in any one industry, provided
that this limitation does not apply to obligations issued or guaranteed as to
interest and principal by the U.S. government, its agencies and
instrumentalities, and repurchase agreements secured by such obligations. The
Clarion Global Real Estate Portfolio may not invest more than 25% of the value
of its total assets in any one industry, provided that the Portfolio will invest
greater than 25% of its total assets in the real estate industry, and, further
provided, that this limitation does not apply to obligations issued or
guaranteed as to interest and principal by the U.S. government, its agencies and
instrumentalities and repurchase agreements secured by such obligations.

4. Underwriting

Each Portfolio may not underwrite securities issued by other persons,
except to the extent that in connection with the disposition of its portfolio
investments it may be deemed to be an underwriter under federal securities laws.

5. Real Estate

Each Portfolio other than Clarion Global Real Estate Portfolio may not
purchase or sell real estate, although a Portfolio may purchase securities of
issuers which deal in real estate, securities which are secured by interests in
real estate and securities representing interests in real estate; provided,
however, that the Portfolio may hold and sell real estate acquired as a result
of the ownership of securities. The Clarion Global Real Estate Portfolio may not
purchase real estate unless acquired as a result of the ownership of securities
or instruments, except that the Portfolio may (i) invest in securities of
issuers that mortgage, invest or deal in real estate or interests there, (ii)
invest in securities that are secured by real estate or interests therein, (iii)
purchase and sell mortgage-related securities, (iv) hold and sell real estate
acquired by the Portfolio as a result of the ownership of securities, and (v)
invest in real estate investment trusts of any kind.

6. Commodities

Each Portfolio may not purchase or sell physical commodities, except
that it may (i) enter into futures contracts and options thereon in accordance
with applicable law and (ii) purchase or sell physical commodities if acquired
as a result of ownership of securities or other instruments. No Portfolio will
consider stock index futures contracts, currency contracts, hybrid investments,
swaps or other similar instruments to be commodities.

7. Loans

Each Portfolio may not make loans, except through the purchase of debt
obligations and the entry into repurchase agreements or through lending of its
portfolio securities. Any loans of portfolio securities will be made according
to guidelines established by the Securities and Exchange Commission and the
Trust's Board of Trustees.

8. Senior Securities

Each Portfolio may not issue any senior security (as defined in the
1940 Act) except in compliance with applicable law.

Non-Fundamental Policies.

The following investment restrictions apply to each Portfolio, except
as noted. These restrictions may be changed for any Portfolio by the Trust's
Board of Trustees without a vote of that Portfolio's shareholders.

Each Portfolio may not:

(1) Purchase securities on margin, except that each Portfolio may:
(a) make use of any short-term credit necessary for clearance
of purchases and sales of portfolio securities and (b) make
initial or variation margin deposits in connection with
futures contracts, options, currencies, or other permissible
investments;

(2) Mortgage, pledge, hypothecate or, in any manner, transfer any
security owned by the Portfolio as security for indebtedness,
except as may be necessary in connection with permissible
borrowings or investments; and then such mortgaging, pledging
or hypothecating may not exceed 33 1/3 % of the respective
total assets of each Portfolio. The deposit of underlying
securities and other assets in escrow and collateral
arrangements with respect to margin accounts for futures
contracts, options, currencies or other permissible
investments are not deemed to be mortgages, pledges, or
hypothecations for these purposes;

(3) Purchase participations or other direct interests in or enter
into leases with respect to oil, gas, or other mineral
explorations or development programs, except that the
Portfolio may invest in securities issued by companies that
engage in oil, gas or other mineral exploration or development
activities or hold mineral leases acquired as a result of its
ownership of securities (this restriction does not apply to
Pioneer Strategic Income Portfolio);

(4) Invest in companies for the purpose of exercising management
or control. This restriction does not apply to Met/Franklin
Mutual Shares Portfolio.

Operating Policies

Warrants

As a matter of operating policy, the Dreman Small Cap Portfolio will
not invest more than 5% of its net assets in warrants.

As a matter of operating policy, the following Portfolios will not
invest in warrants (other than warrants acquired by the Portfolio as part of a
unit or attached to securities at the time of purchase) if, as a result the
investments (valued at the lower of cost or market) would exceed 5% of the value
of the Portfolio's net assets or if, as a result, more than 2% of the
Portfolio's net assets would be invested in warrants not listed on a recognized
U.S. or foreign stock exchange.

o Legg Mason Partners Aggressive Growth
o Lord Abbett Bond Debenture
o Lord Abbett Growth and Income
o Lord Abbett Mid Cap Value
o Van Kampen Comstock

As a matter of operating policy, the PIMCO Inflation Protected Bond and
PIMCO Total Return Portfolios will not invest more than 5% of each Portfolio's
net assets in warrants, including those acquired in units or attached to other
securities. For purposes of the policy, warrants will be valued at the lower of
cost or market, except that warrants acquired by the Portfolio in units with or
attached to securities may be deemed to be without value.

Inverse Floating Rate Securities

The PIMCO Inflation Protected Bond, PIMCO Total Return, Pioneer
Strategic Income and RCM Technology Portfolios will not invest more than 5% of
each Portfolio's net assets (taken at market value at the time of investment )
in any combination of interest only, principal only, or inverse floating rate
securities.

Borrowing

With respect to borrowing, each Portfolio may borrow from banks and
enter into reverse repurchase agreements in an amount up to 33 1/3% of its total
assets, taken at market value. A Portfolio may borrow only as a temporary
measure for extraordinary or emergency purposes such as the redemption of
Portfolio shares. A Portfolio may purchase additional securities so long as
borrowings do not exceed 5% of its total assets.

Loans of Portfolio Securities

With respect to loans of portfolio securities, as a matter of operating
policy, each Portfolio will limit the aggregate of such loans to 33 1/3% of the
value of the Portfolio's total assets.

Real Estate Investments

With respect to real estate investments, as a matter of operating
policy, the Lord Abbett Bond Debenture, Lord Abbett Growth and Income, Lord
Abbett Mid Cap Value and Van Kampen Comstock Portfolios will not invest in real
estate limited partnership interests other than partnerships organized as REITS.

When Issued/Delayed Delivery Securities

The Dreman Small Cap Portfolio may invest up to an aggregate of 5% of
its total assets in when-issued-commitments.

o With respect to when-issued and delayed delivery securities, it is the
policy of all Portfolios permitted to invest in such securities, not
to enter into when-issued commitments exceeding in the aggregate 15%
of the market value of the Portfolio's total assets, less liabilities
other than the obligations created by when-issued commitments, except
as follows.

The following Portfolios may invest up to an aggregate of 25% of their
total assets in when-issued commitments.

o Met/Aim Small Cap Growth
o Lazard Mid Cap Portfolios

The following Portfolios have no current policy limiting the percentage
of assets which may be invested in when-issued commitments.

o Met/Franklin Income o Pioneer Fund
o Goldman Sachs Mid Cap Value o Pioneer Strategic Income
o Harris Oakmark International o T. Rowe Price Mid Cap Growth
o Loomis Sayles Global Markets o Turner Mid Cap Growth
o PIMCO Inflation Protected Bond o Van Kampen Comstock
o PIMCO Total Return

Foreign Currency Transactions

With respect to foreign currency transactions, a Portfolio may enter
into transactions only with counterparties deemed creditworthy by the
Portfolio's investment adviser. A Portfolio, other than Loomis Sayles Global
Markets, PIMCO Inflation Protected Bond and PIMCO Total Return Portfolios, will
not enter into a transaction to hedge currency exposure to an extent greater,
after settling all transactions intended to wholly or partially offset other
transactions, than the aggregate market values (at the time of entering into the
transaction) of the securities held in its portfolio that are denominated,
exposed to or generally quoted in or currently convertible into such currency
other than with respect or cross hedging or proxy hedging. Loomis Sayles Global
Markets, PIMCO Inflation Protected Bond and PIMCO Total Return Portfolios may
also enter into foreign currency transactions, including the direct purchase of
foreign currencies, for non-hedging purposes.

Swaps

With respect to swaps, a Portfolio will not enter into any swap, cap,
floor or collar transaction unless, at the time of entering into such
transaction, the unsecured long-term debt of the counterparty, combined with any
credit enhancements, is rated at least A by Standard & Poor's or Moody's or has
an equivalent equity rating from an NRSRO or is determined to be of equivalent
credit quality of the Portfolio's Adviser.

Concentration

For the purposes of determining concentration in any one industry, each
Allocation Portfolio will aggregate the amount of investments of all affiliated
Underlying Portfolios.

80% Investment Policy (BlackRock High Yield, BlackRock Large Cap Core, Clarion
Global Real Estate, Dreman Small Cap Value, Goldman Sachs Mid Cap Value, Lazard
Mid Cap, Legg Mason Value Equity, Lord Abbett Bond Debenture, Lord Abbett Mid
Cap Value, Met/AIM Small Cap Growth, MFS(R) Emerging Markets Equity, PIMCO
Inflation Protected Bond, Pioneer Strategic Income, RCM Technology, Rainier
Large Cap Equity, T. Rowe Price Mid Cap Growth, Third Avenue Small Cap Value,
Turner Mid Cap Growth, Van Kampen Comstock and Van Kampen Mid Cap Growth
Portfolios) Under normal circumstances, each of the Portfolios listed above will
invest at least 80% of its respective assets (defined as net assets plus the
amount of any borrowing for investment purposes) in certain securities as
indicated in the current Prospectus. (See the Prospectus for a detailed
discussion of these Portfolios' investments.) Shareholders will be provided with
at least 60-days' prior written notice of any changes in the 80% investment
policy. Such notice will comply with the conditions set forth in any applicable
Securities and Exchange Commission rule then in effect.

Unless otherwise indicated, all limitations applicable to a Portfolio's
investments apply only at the time a transaction is entered into. Any subsequent
change in a rating assigned by any rating service to a security (or, if unrated,
deemed to be of comparable quality), or change in the percentage of Portfolio
assets invested in certain securities or other instruments, or change in the
average duration of a Portfolio's investment portfolio, resulting from market
fluctuations or other changes in a Portfolio's total assets will not require a
Portfolio to dispose of an investment until the Adviser determines that it is
practicable to sell or close out the investment without undue market or tax
consequences to the Portfolio. In the event that ratings services assign
different ratings to the same security, the Adviser will determine which rating
it believes best reflects the security's quality and risk at that time, which
may be the higher of the several assigned ratings.

PERFORMANCE INFORMATION

Total return and yield will be computed as described below.

Total Return

Each Portfolio's "average annual total return" figures described and
shown in the Prospectus are computed according to a formula prescribed by the
Securities and Exchange Commission. The formula can be expressed as follows:

P(1+T)n = ERV

Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1,000 payment
made at the beginning of the 1-, 5-, or 10-year (or other)
periods at the end of the 1-, 5-, or 10-year (or other)
periods (or fractional portion thereof).

The calculations of total return assume the reinvestment of all
dividends and capital gain distributions on the reinvestment dates during the
period and the deduction of all recurring expenses that were charged to
shareholders' accounts. The total return figures do not reflect charges and
deductions which are, or may be, imposed under the Contracts.

The performance of each Portfolio will vary from time to time in
response to fluctuations in market conditions, interest rates, the composition
of the Portfolio's investments and expenses. Consequently, a Portfolio's
performance figures are historical and should not be considered representative
of the performance of the Portfolio for any future period.

Yield

From time to time, the Trust may quote the BlackRock High Yield
Portfolio's, the Met/Franklin Income Portfolio's, the Lord Abbett Bond Debenture
Portfolio's, the PIMCO Inflation Protected Bond Portfolio's, the PIMCO Total
Return Portfolio's, the Clarion Global Real Estate Portfolio's and the Pioneer
Strategic Income Portfolio's yield and effective yield in advertisements or in
reports or other communications to shareholders. Yield quotations are expressed
in annualized terms and may be quoted on a compounded basis.

The 30-day yield for the BlackRock High Yield, Met/Franklin Income,
Lord Abbett Bond Debenture, PIMCO Inflation Protected Bond, PIMCO Total Return,
and Pioneer Strategic Income Portfolios and the Clarion Global Real Estate
Portfolio will be calculated according to a formula prescribed by the Securities
and Exchange Commission. The formula can be expressed as follows:

YIELD = 2[(a-b+1)(6)-1]
cd

Where: a = dividends and interest earned during the period

b = expenses accrued for the period (net of reimbursements)

c = the average daily number of shares outstanding during the
period that were entitled to receive dividends

d = the net asset value per share on the last day of the period

For the purpose of determining the interest earned (variable "a" in the
formula above) on debt obligations that were purchased by a Portfolio at a
discount or premium, the formula generally calls for amortization of the
discount or premium; the amortization schedule will be adjusted monthly to
reflect changes in the market values of the debt obligations.

Yield information is useful in reviewing a Portfolio's performance, but
because yields fluctuate, such information cannot necessarily be used to compare
an investment in a Portfolio's shares with bank deposits, savings accounts and
similar investment alternatives which often provide an agreed or guaranteed
fixed yield for a stated period of time. Shareholders should remember that yield
is a function of the kind and quality of the instruments in the Portfolios'
investment portfolios, portfolio maturity, operating expenses and market
conditions.

Shareholders should recognize that in periods of declining interest rates a
Portfolio's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates a Portfolio's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net new
money to a Portfolio from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
Portfolio's investments, thereby reducing the current yield of the Portfolio. In
periods of rising interest rates, the opposite can be expected to occur.

Non-Standardized Performance

In addition to the performance information described above, the Trust
may provide total return information with respect to the Portfolios for
designated periods, such as for the most recent six months or most recent twelve
months. This total return information is computed as described under "Total
Return" above except that no annualization is made.

PORTFOLIO TRANSACTIONS

The Allocation Portfolios invest primarily in the Underlying Portfolios
and do not incur commissions or sales charges in connection with investments in
the Underlying Portfolios, but they may incur such costs if they invest directly
in other types of securities, and they bear such costs indirectly through their
investments in the Underlying Portfolios. Accordingly, the following description
is relevant for the Allocation Portfolios and the Underlying Portfolios.

Subject to the supervision and control of the Manager and the Trustees
of the Trust, each Portfolio's Manager or Adviser, as applicable, is responsible
for decisions to buy and sell securities for its account and for the placement
of its portfolio business and the negotiation of commissions, if any, paid on
such transactions. Brokerage commissions are paid on transactions in equity
securities traded on a securities exchange and on options, futures contracts and
options thereon. Fixed income securities and certain equity securities in which
the Portfolios invest are traded in the over-the-counter market. These
securities are generally traded on a net basis with dealers acting as principal
for their own account without a stated commission, although prices of such
securities usually include a profit to the dealer. In over-the-counter
transactions, orders are placed directly with a principal market maker unless a
better price and execution can be obtained by using a broker. In underwritten
offerings, securities are usually purchased at a fixed price which includes an
amount of compensation to the underwriter generally referred to as the
underwriter's concession or discount. Certain money market securities may be
purchased directly from an issuer, in which case no commissions or discounts are
paid. U.S. government securities are generally purchased from underwriters or
dealers, although certain newly-issued U.S. government securities may be
purchased directly from the U.S. Treasury or from the issuing agency or
instrumentality. The Manager or Adviser of each Portfolio, as applicable, is
responsible for effecting its portfolio transactions and will do so in a manner
deemed fair and reasonable to the Portfolio by the Manager or Adviser, as
applicable, and not according to any formula. It is not anticipated that the
Manager of the Allocation Portfolios will purchase any significant amount of
securities other than shares of the Underlying Portfolios. The primary
consideration in all portfolio transactions will be prompt execution of orders
in an efficient manner at a favorable price. In selecting broker-dealers and
negotiating commissions, the Manager or Adviser, as applicable, considers the
firm's reliability; the quality of its execution services on a continuing basis;
confidentiality, including trade anonymity; and its financial condition. When
more than one firm is believed to meet these criteria, preference may be given
to brokers that provide the Portfolios, their Manager or Advisers, as
applicable, with brokerage and research services within the meaning of Section
28(e) of the Securities Exchange Act of 1934. In doing so, a Portfolio may pay
higher commission rates than the lowest available when its Manager or Adviser,
as applicable, believes it is reasonable to do so in light of the value of the
brokerage and research services provided by the broker effecting the
transaction. Generally, each Portfolio's Manager or Adviser, as applicable, is
of the opinion that, because research provided by a broker must be analyzed and
reviewed, its receipt and use does not tend to reduce expenses but may benefit
the Portfolio or other accounts managed by the Manager or Adviser by
supplementing the Manager's or Adviser's research.

It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional investors
to receive research services from broker-dealers which execute portfolio
transactions for the clients of such advisers. Consistent with this practice, a
Portfolio's Adviser receives and, with respect to the Allocation Portfolios, the
Manager may receive, research services from many broker-dealers with which the
Manager or Adviser, as applicable, places the Portfolio's transactions. The
Adviser may also receive research or research credits from brokers which are
generated from underwriting commissions when purchasing new issues of fixed
income securities or other assets for a Portfolio. This research, which in some
cases may also be purchased for cash, include such matters as general economic
and security market reviews, industry and company reviews, evaluations of
securities and recommendations as to the purchase and sale of securities.

As noted above, the Adviser may purchase new issues of securities for
the Portfolio in underwritten fixed price offerings. In these situations, the
underwriter or selling group member may provide the Adviser with research in
addition to selling the securities (at the fixed public offering price) to the
Portfolio or other advisory clients. Because the offerings are conducted at a
fixed price, the ability to obtain research from a broker-dealer in this
situation imparts knowledge that may benefit the Portfolio, other investment
advisory clients, and the Adviser without incurring additional costs. These
arrangements may not fall within the safe harbor of Section 28(e) because the
broker-dealer is considered to be acting in a principal capacity in underwritten
transactions. However, FINRA has adopted rules expressly permitting
broker-dealers to provide bona fide research to advisers in connection with
fixed price offerings under certain circumstances. As a general matter in these
situations, the underwriter or selling group member will provide research
credits at a rate that is higher than that which is available for secondary
market transactions.

The Board of Trustees has approved a Statement of Directed Brokerage
Policies and Procedures for the Trust pursuant to which the Trust may direct the
Manager to cause Advisers to effect securities transactions through
broker-dealers in a manner that would help to 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 the management agreement ("Directed
Brokerage"). The Trustees will review the levels of Directed Brokerage for each
Portfolio on a quarterly basis.

Under the Directed Brokerage policy, any payments or benefits accrued
by or credited to a particular Portfolio are applied against the Portfolio's
gross expenses. Accordingly, in the event that the Manager waives or limits its
fees or assumes other expenses of a Portfolio in accordance with the Expense
Limitation Agreement described herein (collectively, "expense reimbursements"),
payments or benefits accrued by or credited to the Portfolio under the Directed
Brokerage policy may reduce the expense reimbursements owed by the Manager to
the Portfolio.

An Adviser may effect portfolio transactions for other investment
companies and advisory accounts. Research services furnished by broker-dealers
through which a Portfolio effects its securities transactions may be used by the
Portfolio's Adviser in servicing all of its accounts; not all such services may
be used in connection with the Portfolio. In the opinion of each Adviser, it is
not possible to measure separately the benefits from research services to each
of its accounts, including a Portfolio.

Whenever concurrent decisions are made to purchase or sell securities
by a Portfolio and another account, the Portfolio's Adviser will attempt to
allocate equitably portfolio transactions among the Portfolio and other
accounts. In making such allocations between the Portfolio and other accounts,
the main factors to be considered are the respective investment objectives, the
relative size of portfolio holdings of the same or comparable securities, the
availability of cash for investment, the size of investment commitments
generally held, and the opinions of the persons responsible for recommending
investments to the Portfolio and the other accounts. In some cases this
procedure could have an adverse effect on a Portfolio. In the opinion of each
Adviser, however, the results of such procedures will, on the whole, be in the
best interest of each of the accounts.

The Advisers to the Portfolios may execute portfolio transactions
through certain of their affiliated brokers, if any, acting as agent in
accordance with procedures established by the Board of Trustees, but will not
purchase any securities from or sell any securities to any such affiliate acting
as principal for its own account. It is anticipated that the Adviser to Third
Avenue Small Cap Value Portfolio will execute a majority of the Portfolio's
transactions through an affiliated broker.

The following table shows the amounts of brokerage commissions paid by
the Portfolios during the fiscal years ended December 31, 2007, December 31,
2006, and December 31, 2005 or October 31, 2006, and October 31, 2005, as noted.

---------------------------------------------- ------------------ ----------------- ----------------
Portfolio 12/31/07 12/31/06 12/31/05
--------- -------- -------- --------

Met/AIM Small Cap Growth $670,477 $752,792 $719,277

Batterymarch Growth and Income 395,847 338,099(13) N/A

BlackRock High Yield(1) 722 --- 31

BlackRock Large Cap Core(2) 450,849 34,632 45,776

Clarion Global Real Estate (3) 3,160,080 1,957,452 1,360,834

Dreman Small Cap Value 419,504 225,365 6,495(4)

Goldman Sachs Mid Cap Value 806,159 474,565 451,945

Harris Oakmark International 3,457,484 2,564,108 1,242,073

Janus Forty(5) 638,351 741,365 531,600

Lazard Mid Cap(6) 1,397,929 868,654 590,125

Legg Mason Partners Aggressive 190,012 1,269,392 1,412,300
Growth(7)

Legg Mason Partners Managed 125,296 202,146 117,608
Assets

Legg Mason Value Equity 903,517 908,723 6,202(8)

Loomis Sayles Global Markets 1,739,052 653,128(13) N/A

Lord Abbett Bond Debenture 27,449 19,206 50,597

Lord Abbett Growth and Income 3,154,129 1,932,766 2,376,453

Lord Abbett Mid Cap Value 253,538 210,624 184,752

MFS(R) Emerging Markets Equity 2,573,676 1,201,288(13) N/A

MFS(R) Research International 3,630,570 3,723,719 2,622,022

Oppenheimer Capital Appreciation 1,256,171 1,081,501 1,462,139

PIMCO Inflation Protected Bond 135,536 74,103 33,366

PIMCO Total Return 1,672,085 527,556 325,800

Pioneer Fund 10,526 21,319 17,885

RCM Technology(9) 1,529,519 2,204,387 1,688,027

T. Rowe Price Mid Cap Growth 582,981 606,323 419,561

Third Avenue Small Cap Value 2,557,402 1,229,269 983,289

Turner Mid Cap Growth 748,101 817,623 561,064

Van Kampen Comstock 762,918 684,178 670,404(4)

Van Kampen Mid Cap Growth(10) 101,693 131,183 92,819

MetLife Aggressive Strategy 0 0 0

MetLife Balanced Strategy 0 0 0

MetLife Defensive Strategy 0 0 0

MetLife Growth Strategy 0 0 0

MetLife Moderate Strategy 0 0 0

Rainier Large Cap Equity 493,321(15) N/A N/A

Strategic Conservative Growth 0 0(14) N/A

Strategic Growth 0 0(14) N/A

Strategic Growth and Income 0 0(14) N/A

10/31/06 10/31/05

Met/AIM Capital Appreciation (11) 340,768 566,429 444,810

Pioneer Strategic Income(12) 0 7 0

(1) Formerly Federated High Yield.
(2) Formerly Mercury Large Cap Core.
(3) Formerly Neuberger Berman Real Estate.
(4) For the period 5/1/05 through 12/31/05.
(5) Formerly Janus Capital Appreciation.
(6) Formerly Met/AIM Mid Cap Core Equity.
(7) Formerly Legg Mason Aggressive Growth and Janus Aggressive Growth.
(8) For the period 11/1/05 through 12/31/05.
(9) Formerly RCM Global Technology.
(10)Formerly Lord Abbett Growth Opportunities.
(11)For the period 11/1/06 through 12/31/06, commissions paid by the Portfolio
were $53,611.
(12)For the period 11/1/06 through 12/31/06, commissions paid by
the Portfolio were $0.
(13)For the period 5/1/06 through 12/31/06.
(14)For the period 11/1/06 through 12/31/06.
(15)For the period 11/1/07 through 12/31/07.

In 2007, the following Portfolios paid the amounts indicated to an
affiliated broker of the Adviser:

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

Aggregate Brokerage Percentage of Percentage
Commissions Paid to Total Brokerage of Commissionable
Affiliated Affiliate Commissions Transactions
Portfolio Broker-Dealer

Goldman Sachs Mid Cap Value Goldman Sachs & Co. $29,873 3.71% 5.03%
Portfolio

Clarion Global Real Estate Lehman Brothers, Inc. $626,916 19.84% 24.21%
Portfolio(1)

Clarion Global Real Estate Neuberger Berman LLC $2,438 0.08% 0.09%
Portfolio(1)

Third Avenue Small Cap Value M.J. Whitman LLC $1,586,156 62.02% 53.76%

Van Kampen Comstock Morgan Stanley & Co. $12,644 1.66% 0.19%

Van Kampen Mid Cap Growth Morgan Stanley & Co. $2,856 2.81% 1.83%

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

(1) Formerly Neuberger Berman Real Estate.

MANAGEMENT OF THE TRUST

The Trust is supervised by a Board of Trustees that is responsible for
representing the interests of shareholders. The Trustees meet periodically
throughout the year to oversee the Portfolios' activities, reviewing, among
other things, each Portfolio's performance and its contractual arrangements with
various service providers. The Trustees elect the officers of the Trust who are
responsible for administering the Trust's day-to-day operations.

Trustees and Officers

The Trustees and executive officers of the Trust, their ages and their
principal occupations during the past five years are set forth below. Unless
otherwise indicated, the business address of each is 5 Park Plaza, Suite 1900,
Irvine, California 92614. Each Trustee who is deemed an "interested person," as
such term is defined in the 1940 Act, is indicated by an asterisk. Those
Trustees who are not "interested persons" as defined in the 1940 Act are
referred to as "Disinterested Trustees."

The Trustees

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

Number
Term of of
Office Portfolios
and in
Length Fund Complex+
Position(s) of overseen Other Directorships
Held with Time Principal Occupation(s) by Held
Name and Age Registrant Served During Past 5 Years Trustee by Trustee
------------- ---------- -------- ------------------- ------------- -------------------------

Interested Trustees

Elizabeth M. Forget* (41) President Indefinite; Since May 2007, Senior Vice 89 Director,
and Trustee From President, MetLife, Inc.; since Metropolitan Series

December December 2000, President of Met Fund, Inc. and
2000 to Investors Advisory LLC; since MetLife Series Fund
present May 2006, President of MetLife II since August,

Advisers LLC; from December 2003 2006
to April 2007, Vice President,
MetLife, Inc.

Robert Boulware**(51) Trustee Indefinite; Since 2004, Director of Norwood 52 Director of Gainsco,
From March Promotional Products, Inc.; since Inc., Norwood
2008 to 2005, Director of Gainsco, Inc. Promotional Products,
present (auto insurance); since 2007, Inc., Wealthpoint
Director of Wealthpoint Advisors Advisors and Holladay
(a business development company) Bank.
and Holladay Bank; from 1992-2006,
President and Chief Executive
Officer of ING Fund Distributor,
LLC.

Disinterested Trustees

Dawn M. Vroegop Trustee Indefinite; From September 1999 to September 52 None
(41) From 2003, Managing Director,
December Dresdner RCM Global Investors.

2000 to
present

Stephen M. Alderman (48) Trustee Indefinite; Since November 1991, Shareholder 52 None
From in the law firm of Garfield and

December Merel, Ltd.
2000 to
present

Jack R. Borsting (79) Trustee Indefinite; Since 2006, Professor of Business 52 Lead Governor,
From Administration and Dean Emeritus, American Stock
December Marshall School of Business, Exchange, Director,
2000 to University of Southern California Los Angeles
present (USC); from 2001 to 2005, Orthopedic Hospital,
Professor of Business Trustee, The Rose
Administration and Dean Emeritus; Hills Foundation.
from 1995-2001 Executive Director, Member, Army Science
Center for Telecommunications Board.
Management.

Daniel A. Doyle (49) Trustee Indefinite; Since October 2000, Vice President 52 None
From and Chief Financial Officer of ATC
February Management, Inc. (public utility).

2007 to
present

Susan C. Gause (55) Trustee Indefinite; From 2000 to December 2002, Chief 52 None
From March Executive Officer of Dresdner RCM
2008 to Global Investors (purchased by
present Allianz Asset Management in
2001).
- -------------------------------------------------------------------------------------------------------------------------------

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

The Executive Officers

- ----------------------------- ------------- ------------- ---------------------------------
Term of
Office and
Position(s) Length of
Held with Time Principal Occupation(s)
Name and Age Registrant Served During Past 5 Years
------------- ---------- ------- -------------------

Jeffrey A. Tupper Chief From August Since October 2006, Assistant
(37) Financial 2002 to Vice President, MetLife Group,
Officer, present Inc. Since February 2001,
Treasurer Assistant Vice President of
MetLife Investors Insurance
Company.

Michael K. Farrell Executive From August Since December 2005, Executive
(54) Vice President 2002 to Vice President, MetLife, Inc.;
present since July 2002, Chief Executive
Officer of MetLife Investors
Group, Inc. and Met Investors
Advisory LLC; since April 2001,
Chief Executive Officer of
MetLife Resources.

Richard C. Pearson Vice From December Since June 2001, President or
(65) President and 2000 to Executive Vice President of

Secretary present MetLife Investors Distribution
Company; since January 2001,
Executive Vice President, General
Counsel and Secretary of MetLife
Investors Group, Inc. and Vice
President, Secretary and
Associate General Counsel of its
affiliate life insurance
companies; from November 2000 to
January 2002, Senior Vice
President and General Counsel of
Met Investors Advisory Corp.;
since January 2002, Senior Vice
President, General Counsel and
Secretary of Met Investors
Advisory, LLC.

Jeffrey P. Halperin Chief From November Since March 2006, Vice President,
(40) Compliance 2006 to Corporate Ethics and Compliance
Officer present Department, MetLife, Inc.; from
October 2002 to March 2006,
Assistant Vice President; from
November 2005 to August 2006,
Interim Chief Compliance Officer,
Met Investors Series Trust; since
April 2007, Chief Compliance
Officer, Metropolitan Series
Funds; from August 2006 to April
2007, Interim Chief Compliance
Officer, Metropolitan Series
Funds; since August 2006, Chief
Compliance Officer, Met Investors
Advisory, LLC and MetLife
Advisers, LLC; since November
2006, Chief Compliance Officer,
MetLife Investment Advisors
Company, LLC.

Mary Moran Zeven Assistant From October Since 2002, Senior Vice President
2 Avenue de Lafayette Secretary 2001 to and Senior Managing Counsel,
Boston, Massachusetts 02111 present State Street Bank and Trust
(47) Company.

William C. Cox Assistant From November Since 1997, Vice President and
2 Avenue de Lafayette Treasurer 2004 to Senior Director, Fund
Boston, Massachusetts present Administration Division, State
02111 Street Bank and Trust Company.
(41)
- -------------------------------------------------------------------------------------------
- ----------------------
+ The Fund Complex includes the Trust (52 portfolios), Metropolitan Series
Fund, Inc. (36 portfolios) and Metropolitan Series Fund
II (1 portfolio).

* Ms. Forget is an "interested person" of the Trust as a result
of her affiliation with the Manager and the Distributor.
* Mr. Boulware is an "interested person" of the Trust as a result
of his prior affiliation with an affiliate of the Adviser to one
of the Trust's Portfolios.

Committees of the Board

The Trust has a standing Audit Committee consisting of all of the
Disinterested Trustees. The Audit Committee's function is to recommend to the
Board independent accountants to conduct the annual audit of the Trust's
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 professional services. In addition, the 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 held four meetings during the fiscal year ended
December 31, 2007.

The Trust has a Nominating, Governance and Compensation Committee
consisting of all the Disinterested Trustees. The Nominating, Governance and
Compensation Committee's function is to nominate and evaluate Disinterested
Trustee candidates and review the compensation arrangement for each of the
Trustees. The Nominating, Governance and Compensation Committee will not
consider nominees recommended by contract holders. The Nominating, Governance
and Compensation Committee held six meetings during the fiscal year ended
December 31, 2007.

The Trust has a Valuation Committee currently consisting of Elizabeth
M. Forget, Richard C. Pearson, Jeffrey Tupper, Thomas McDevitt, Bryan Andersen,
Jeffrey Bernier and such other officers of the Trust and the Manager, as well as
such officers of any Adviser to any Portfolio as are deemed necessary by Ms.
Forget, Mr. Pearson, Mr. Tupper, Mr. McDevitt, Mr. Andersen or Mr. Bernier from
time to time, each of whom shall serve at the pleasure of the Board of Trustees
as members of the Valuation Committee. The Valuation Committee determines the
value of any of the Trust's securities and assets for which market quotations
are not readily available or for which valuations cannot otherwise be provided.
The Valuation Committee held 22 meetings during the fiscal year ended December
31, 2007.

Compensation of the Trustees

Each Trustee, who is not an employee of the Manager or any of its
affiliates, currently receives from the Trust an annual retainer of $80,000
($20,000 per quarter) plus (i) an additional fee of $8,000 for each regularly
scheduled Board meeting attended, Committee meetings and private Disinterested
Trustee meetings attended, (ii) $5,000 for each special meeting attended in
person, (iii) for each telephonic/internet interactive Board and Committee
meeting attended, $3,000 and $2,500, respectively, and (iv) reimbursement for
expenses in attending in-person meetings. In addition, the lead Disinterested
Trustee, the Chair of the Audit Committee and the Chair of the Nominating and
Compensation Committee each receive a supplemental annual retainer of $20,000,
$10,000 and $10,000, respectively.

The table below sets forth the compensation paid to each of the
Trustees affiliated with the Manager and all other Trustees during the fiscal
year ended December 31, 2007.

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

Total
Compensation
Trustee Aggregate From Fund
Compensation Complex+ Paid
from Trust to Trustee
--------- -----------
Independent Trustee

Elizabeth M. Forget None None

Disinterested Trustees

Stephen M. Alderman $155,500 $155,500
Jack R. Borsting $125,500 $125,500
Daniel A. Doyle $107,722 $107,722
Theodore A. Myers* $125,500 $125,500
Dawn M. Vroegop $135,500 $135,500
---------------------------------------------------------------------

+ The Fund Complex includes the Trust (52 portfolios), Metropolitan
Series Fund, Inc. (36 portfolios) and Metropolitan Series Fund II
(1 portfolio).
* Mr. Myers resigned from the Board in February, 2008.

Indemnification of Trustees and Officers

The Trust's Agreement and Declaration of Trust provides that the Trust
will indemnify its Trustees and officers against liabilities and expenses
incurred in connection with litigation in which they may be involved because of
their offices with the Trust, except if it is determined in the manner specified
in the Agreement and Declaration of Trust that they have not acted in good faith
in the reasonable belief that their actions were in the best interests of the
Trust or that such indemnification would relieve any officer or Trustee of any
liability to the Trust or its shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of his duties. The Trust, at its
expense, provides liability insurance for the benefit of its Trustees and
officers.

Trustees' and Officers' Share Ownership

As of December 31, 2007, the officers and Trustees of the Trust as a
group did not own any outstanding shares of the Trust.

Proxy Voting Policies and Procedures

Pursuant to the Trust's Proxy Voting Policies and Procedures, the Trust
has delegated the proxy voting responsibilities with respect to each Portfolio
to the Manager. Because the Manager views proxy voting as a function that is
incidental and integral to portfolio management, it has in turn delegated the
proxy voting responsibilities with respect to each Portfolio to the applicable
Advisers. Appendix B to this Statement of Additional Information contains the
proxy voting policies and procedures, or a summary of such policies and
procedures, of the Portfolios' Advisers.

The Manager votes proxies relating to shares of an Underlying Portfolio
held by an Allocation Portfolio in the same proportion as the vote of the other
Contract owners of the Underlying Portfolio with respect to a particular
proposal.

Proxy Voting Records

The Manager and each of the Advisers, as applicable, will maintain
records of voting decisions for each vote cast on behalf of the Portfolios.
Information regarding how each Portfolio voted proxies relating to portfolio
securities during the 12-month period ended June 30, 2007 has been filed with
the Securities and Exchange Commission on Form N-PX and is available (1) without
charge, upon request, by calling the Trust, toll-free at 1-800-343-8496 and (2)
on the SEC's website at http://www.sec.gov.

Portfolio Holdings Disclosure Policy

The Board of Trustees has adopted and approved policies and procedures
reasonably designed to protect the confidentiality of the Trust's portfolio
holdings information and to seek to prevent the selective disclosure of such
information. The Trust reserves the right to modify these policies and
procedures at any time without notice.

Only the Manager's or, as applicable, the Adviser's Chief Compliance
Officer, or persons designated by the Trust's Chief Compliance Officer (each, an
"Authorized Person") are authorized to disseminate nonpublic portfolio
information, and only in accordance with the procedures described below.
Pursuant to these polices and procedures, the Manager or the Adviser may
disclose a Portfolio's portfolio holdings to unaffiliated parties prior to the
time such information has been disclosed to the public through a filing with the
SEC or a posting on an insurance company website only if an Authorized Person
determines that (i) there is a legitimate business purpose for the disclosure;
and (ii) if practicable, the recipient is subject to a confidentiality
agreement, including a duty not to trade on the nonpublic information. Under the
Trust's policies and procedures, a legitimate business purpose includes
disseminating or providing access to portfolio information to (i) the Trust's
service providers (e.g., custodian, independent auditors) in order for the
service providers to fulfill their contractual duties to the Trust; (ii) rating
and ranking organizations and mutual fund analysts; (iii) a newly hired Adviser
prior to the Adviser commencing its duties; (iv) the Adviser of a Portfolio or
other affiliated investment company portfolio that will be the surviving
portfolio in a merger; (v) consultants that provide research and consulting
services to the Manager or its affiliates with respect to asset allocation
targets and investments for asset allocation funds of funds in the MetLife
enterprise; and (vi) firms that provide pricing services, proxy voting services
and research and trading services.

In accordance with the aforementioned procedures, the Manager, the
Advisers and/or their affiliates periodically disclose the Trust's portfolio
holdings information on a confidential basis to various service providers. Among
the service providers to which the Manager, the Advisers and/or their affiliates
may periodically disclose the Trust's portfolio holdings information on a
confidential basis in accordance with the aforementioned procedures are the
following:

o Barger & Wolen, LP o Lipper Inc.
o Bear Stearns o Loan X
o Bloomberg L.P. o Morningstar Associates, LLC
o CIBC World Markets o Morningstar, Inc.
o Credit Suisse o Plexus Plan Sponsor Group, Inc.
o Deloitte & Touche LLP o RR Donnelley
o Diversified Information Technologies, Inc. o Reuters
o FRI Corporation o State Street Bank and Trust Company
o Ibbotson Associates, Inc. o State Street Global Markets
o Institutional Shareholder Services Inc. o Street Software Technology, Inc.
o Interactive Data Corporation o Sullivan & Worcester LLP
o ITG, Inc. o Thompson Financial

The Trust's policies and procedures prohibit the dissemination of
non-public portfolio information for compensation or other consideration. Any
exceptions to these policies and procedures may be made only if approved by the
Trust's Chief Compliance Officer as in the best interests of the Trust, and only
if such exceptions are reported to the Trust's Board of Trustees at its next
regularly scheduled meeting.

Dissemination of the Trust's portfolio holdings information to MetLife
enterprise employees is limited to persons who are subject to a duty to keep
such information confidential and who need to receive the information as part of
their duties. As a general matter, the Trust disseminates portfolio holdings to
contract owners only in the Annual or Semiannual Reports or in other formats
that are generally available on a contemporaneous basis to all such contract
owners or the general public. The Prospectus describes certain types of
information that are disclosed on insurance company websites (including
www.metlifeinvestors.com), as well as the frequency with which such information
is disclosed and the lag between the date of the information and the date of its
disclosure.

INVESTMENT ADVISORY AND OTHER SERVICES

The Manager

The Trust is managed by Met Investors Advisory, LLC (the "Manager")
which, subject to the supervision and direction of the Trustees of the Trust,
has overall responsibility for the general management and administration of the
Trust. MetLife Investors Group, Inc., an affiliate of Metropolitan Life
Insurance Company, owns all of the outstanding common shares of the Manager and
MetLife Investors Distribution Company, the Trust's distributor.

With respect to the Portfolios other than the following Allocation
Portfolios (MetLife Defensive Strategy Portfolio, MetLife Moderate Strategy
Portfolio, MetLife Balanced Strategy Portfolio, MetLife Growth Strategy
Portfolio, MetLife Aggressive Strategy Portfolio and Met/Franklin Templeton
Founding Strategy Portfolio), the Trust and the Manager have entered into a
Management Agreement dated December 8, 2000, as amended ("Original Management
Agreement"), which was initially approved by the Board of Trustees on December
7, 2000 and by Security First Life Insurance Company (currently known as MetLife
Investors USA Insurance Company), as initial shareholder of the Trust, on
December 8, 2000. With respect to the following Allocation Portfolios (American
Funds Balanced Allocation Portfolio, American Funds Growth Allocation Portfolio,
American Funds Moderate Allocation Portfolio, MetLife Defensive Strategy
Portfolio, MetLife Moderate Strategy Portfolio, MetLife Balanced Strategy
Portfolio, MetLife Growth Strategy Portfolio, MetLife Aggressive Strategy
Portfolio and Met/Franklin Founding Strategy Portfolio), the Trust and the
Manager have entered into a Management Agreement dated November 1, 2004, as
amended ("Additional Management Agreement"), which was initially approved by the
Board of Trustees on August 19, 2004 and by MetLife Investors USA Insurance
Company, as initial shareholder of MetLife Defensive Strategy Portfolio, MetLife
Moderate Strategy Portfolio, MetLife Balanced Strategy Portfolio, MetLife Growth
Strategy Portfolio and MetLife Aggressive Strategy Portfolio on October 29, 2004
and as initial shareholder of American Funds Balanced Allocation Portfolio,
American Funds Growth Allocation Portfolio, American Funds Moderate Allocation
Portfolio and Met/Franklin Templeton Founding Strategy Portfolio on April 25,
2008. Subject always to the supervision and direction of the Trustees of the
Trust, under the Original Management Agreement, 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 investment 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
under the Original Management Agreement, 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 portion 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 third-party data reporting services all
currently available standardized performance information and other customary
data.

Under the Original Management Agreement, the Manager also is required
to furnish to the Trust, at its own expense and without remuneration from or
additional cost to the Trust, the following:

o Office space, all necessary office facilities and equipment;

o Necessary executive and other personnel, including personnel for the
performance of clerical and other office functions, other than those
functions:

o 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 the entity selected
to perform such services; or

o related to the investment advisory services to be provided by any
Adviser pursuant to an investment advisory agreement with the Manager
("Advisory Agreement").

o Information and services, other than services of outside counsel or
independent accountants or investment advisory services to be provided by
any Adviser under an Advisory Agreement, required in connection with the
preparation of all registration statements, prospectuses and statements of
additional information, any supplements thereto, annual, semi-annual, and
periodic reports to Trust shareholders, regulatory authorities, or others,
and all notices and proxy solicitation materials, furnished to shareholders
or regulatory authorities, and all tax returns.

The Additional Management Agreement is substantially the same as the
Original Management Agreement except that the Manager will: (i) provide
investment management and advisory services to the Allocation Portfolios; (ii)
render investment advice concerning the Underlying Portfolios in which to invest
and the appropriate allocations for each of the Allocation Portfolios.

As compensation for these services, the Trust pays the Manager a
monthly fee at the following annual rates of each Portfolio's average daily net
assets:

------------------------------------------------------ ---------------------------------------------------------
Portfolio Fee
------------------------------------------------------ ---------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------

Met/AIM Capital Appreciation 0.80% of the first $100 million of such assets plus 0.75% of
such assets over $100 million up to $200 million plus 0.70%
of such assets over $200 million up to $1 billion plus 0.65%
of such assets over $1 billion

Clarion Global Real Estate 0.70% of 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

Dreman Small Cap Value 0.80% of first $100 million of such assets plus 0.775% of
such assets over $100 million up to $500 million plus 0.750%
of such assets over $500 million up to $1 billion plus
0.725% on such assets over $1 billion

Met/Franklin Income 0.80% of first $200 million of such assets plus 0.675% of such
assets over $200 million up to $500 million plus 0.65% of such
assets over $500 million

Met/Franklin Mutual Shares 0.80%

MFS(R) Emerging Markets Equity 1.05% of first $250 million of such assets plus 1.00% of such
assets over $250 million up to $500 million plus 0.85% of such
assets over $500 million up to $1 billion plus 0.75% of such
assets over $1 billion

MFS(R) Research International 0.80% of 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

Oppenheimer Capital Appreciation 0.65% of first $150 million of such assets plus 0.625% of
such assets over $150 million up to $300 million plus
0.60% of such assets over $300 million up to $500 million
plus 0.55% of such assets over $500 million up to $700
million plus 0.525% of such assets over $700 million up
to $900 million plus 0.50% of such assets over $900
million

Pioneer Fund 0.750% of first $250 million of such assets plus 0.700% of such
assets over $250 million up to $500 million plus 0.675% of such
assets over $500 million up to $1 billion plus 0.650% of such
assets over $1 billion up to $2 billion plus 0.600% of such
assets over $2 billion

Pioneer Strategic Income 0.60% of first $500 million of such assets plus 0.55% of such
assets over $500 million up to $1 billion plus 0.53% of such
assets over $1 billion

RCM Technology 0.88% of first $500 million of such assets plus 0.85% of
such assets over $500 million

Rainier Large Cap Equity 0.70% of first $150 million of such assets, plus 0.675% of such
assets over $150 million up to $300 million, plus 0.65% of such
assets over $300 million up to $1 billion, plus 0.60% of such
assets over $1 billion

T. Rowe Price Mid Cap Growth 0.75%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------

Met/Templeton Growth 0.70% of 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

Van Kampen Comstock 0.65% of 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

Van Kampen Mid Cap Growth 0.70% of 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

American Funds Balanced Allocation 0.10%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
American Funds Growth Allocation 0.10%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
American Funds Moderate Allocation 0.10%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------

MetLife Aggressive Strategy 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

MetLife Balanced Strategy 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

MetLife Defensive Strategy 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

MetLife Growth Strategy 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

MetLife Moderate Strategy 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

Strategic Conservative Growth 0.15% of first $250 million of such assets plus 0.125% of such
assets over $250 million up to $500 million plus 0.10% of such
assets over $500 million

Strategic Growth 0.15% of first $250 million of such assets plus 0.125% of
such assets over $250 million up to $500 million plus 0.10%
of such assets over $500 million

Strategic Growth and Income 0.15% of first $250 million of such assets plus 0.125% of
such assets over $250 million up to $500 million plus 0.10%
of such assets over $500 million

Met/Franklin Templeton Founding Strategy 0.05%

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

See the Prospectus for information on any voluntary fee waivers with
respect to the Portfolios. From the management fees, the Manager pays the
expenses of providing investment advisory services to the Portfolios, including
the fees of the Adviser of each applicable Portfolio.

The Manager and the Trust have also entered into an expense limitation
agreement with respect to certain Portfolios ("Expense Limitation Agreement"),
pursuant to which the Manager has agreed to waive or limit its fees and to
assume other expenses so that the total annual operating expenses (with certain
exceptions described in the Prospectus) of each such Portfolio are limited to
the extent described in the "Management--Expense Limitation Agreement" section
of the Prospectus.

In addition to the management fees, the Trust pays all expenses not
assumed by the Manager, including, without limitation, charges for the services
and expenses of the independent accountants and legal counsel retained by the
Trust, for itself and its Disinterested Trustees; accounting and auditing
services; interest; taxes; costs of printing and distributing reports to
shareholders, proxy materials and prospectuses; charges of its administrator,
custodian, transfer agent and dividend disbursing agent; registration fees; fees
and expenses of the Trustees who are not affiliated persons of the Manager;
insurance; brokerage costs; litigation; and other extraordinary or nonrecurring
expenses. All general Trust expenses are allocated among and charged to the
assets of the Portfolios of the Trust on a basis that the Trustees deem fair and
equitable, which may be on the basis of relative net assets of each Portfolio or
the nature of the services performed and relative applicability to each
Portfolio. In addition, as discussed below under "Distribution of the Trust's
Shares," the Class B, Class C and Class E shares of each Portfolio may pay for
certain distribution-related expenses in connection with activities primarily
intended to result in the sale of its shares.

The Management Agreement and the Additional Management Agreement each
continues in force for two years from its commencement date, with respect to
each Portfolio, and from year to year thereafter, but only so long as its
continuation as to each Portfolio is specifically approved at least annually (i)
by the Trustees or by the vote of a majority of the outstanding voting
securities of the Portfolio, and (ii) by the vote of a majority of the
Disinterested Trustees, by votes cast in person at a meeting called for the
purpose of voting on such approval. The Management Agreement and the Additional
Management Agreement each provides that it shall terminate automatically if
assigned, and that it may be terminated as to any Portfolio without penalty by
the Trustees of the Trust or by vote of a majority of the outstanding voting
securities of the 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.

The Trust commenced operations in February, 2001. The following table
shows the fees paid by the Portfolios to the Manager and by certain of the
Portfolios' predecessors to current affiliates of the Manager, any fee waivers
or reimbursements and any deferred expense reimbursements during the fiscal
years ended December 31, 2007, December 31, 2006, and December 31, 2005 or
October 31, 2006 or October 31, 2005, as noted.

- -----------------------------------------------------------------------------------------------------------------------
12/31/07
Investment Investment Other Expenses Deferred Expense
Management Fee Management Fee Reimbursed Reimbursement
Portfolio Paid Waived
---------- ------------- ------------- ------------- -----------------

Met/AIM Capital Appreciation (9) $1,751,789 $--- $--- $---

Met/AIM Small Cap Growth 6,752,950 --- --- ---

Batterymarch Growth and Income 3,071,575 223,355 20,579 ---

BlackRock High Yield 1,707,809 --- --- 24,994

BlackRock Large Cap Core 7,881,120 --- --- 82,236

Clarion Global Real Estate (1) 8,580,974 --- --- ---

Dreman Small Cap Value 1,172,742 --- --- 37,273

Goldman Sachs Mid Cap Value 3,873,402 --- --- ---

Harris Oakmark International 18,674,560 --- --- ---

Janus Forty 6,611,066 --- --- ---

Lazard Mid Cap 5,094,851 1,126 --- ---

Legg Mason Partners 6,288,191 --- --- ---
Aggressive Growth

Legg Mason Partners Managed 1,293,568 --- --- ---
Assets

Legg Mason Value Equity 8,949,822 --- --- ---

Loomis Sayles Global Markets 5,615,764 --- --- ---

Lord Abbett Bond Debenture 9,801,505 --- --- 70,796

Lord Abbett Growth and 19,893,949 --- --- ---
Income

Lord Abbett Mid Cap Value 3,269,897 --- --- 90,000
Portfolio

MFS(R) Emerging Markets 5,383,725 --- --- 375,934
Equity

MFS(R) Research International 11,403,214 --- --- ---

Oppenheimer Capital 5,633,745 --- --- ---
Appreciation

PIMCO Inflation Protected 6,138,802 --- --- ---
Bond

PIMCO Total Return 18,014,014 --- --- ---

Pioneer Fund 351,709 9,250 --- 14,246

Pioneer Strategic Income 1,951,027 --- --- ---

Rainier Large Cap Equity 664,775 81 --- ---

RCM Technology 2,727,184 --- --- ---

T. Rowe Price Mid Cap Growth 7,316,173 --- --- ---

Third Avenue Small Cap Value 13,073,985 --- --- ---

Turner Mid Cap Growth 3,118,476 --- --- ---

Van Kampen Comstock 10,152,378 --- --- ---

Van Kampen Mid Cap 664,558 6,445 --- ---
Growth

MetLife Aggressive Strategy 773,161 11,142 4,569 ---

MetLife Balanced Strategy 3,396,810 --- --- ---

MetLife Defensive Strategy 630,611 54,067 13,745 ---

MetLife Growth Strategy 3,850,359 --- --- ---

MetLife Moderate Strategy 1,365,189 --- --- ---

Strategic Conservative Growth 396,216 126,028 3,382 ---

Strategic Growth 383,971 131,207 73 ---

Strategic Growth and Income 235,505 127,809 6,825 ---

12/31/06
Investment Investment Other Expenses Deferred Expense
Management Fee Management Fee Reimbursed Reimbursement
Portfolio Paid Waived
--------- ------------ ------------- ----------- --------------

Met/AIM Small Cap Growth $5,208,050 $--- $--- $---

Batterymarch Growth and 2,057,034 225,909 --- ---
Income

BlackRock High Yield (2) 488,192 24,994 --- ---

BlackRock Large Cap Core (3) 1,014,593 82,236 --- ---

Clarion Global Real Estate(1) 6,057,682 --- --- ---

Dreman Small Cap Value 297,691 108,951 --- ---

Goldman Sachs Mid Cap Value 3,106,141 --- --- 876

Harris Oakmark International 13,191,319 --- --- ---

Janus Forty(4) 6,710,661 --- --- ---

Lazard Mid Cap (5) 3,031,355 --- --- ---

Legg Mason Partners 5,333,277 --- --- ---
Aggressive Growth (6)

Legg Mason Partners Managed 1,348,879 --- --- ---
Assets

Legg Mason Value Equity 4,005,093 54,098 --- 101,700

Loomis Sayles Global Markets 2,059,460 --- --- ---

Lord Abbett Bond Debenture 8,565,789 --- --- ---

Lord Abbett Growth and 17,136,570 --- --- ---
Income

Lord Abbett Mid Cap Value 2,389,129 --- --- ---
Portfolio

MFS(R) Emerging Markets 2,022,193 375,934 --- ---
Equity

MFS(R) Research International 8,460,330 --- --- ---

Oppenheimer Capital 6,068,516 --- --- ---
Appreciation

PIMCO Inflation Protected 5,654,987 --- --- ---
Bond

PIMCO Total Return 12,360,372 --- --- ---

Pioneer Fund 320,224 56,750 --- ---

RCM Technology (7) 2,334,468 --- --- 108,060

T. Rowe Price Mid Cap Growth 5,928,302 --- --- ---

Third Avenue Small Cap Value 8,709,531 --- --- ---

Turner Mid Cap Growth 2,255,859 --- --- ---

Van Kampen Comstock 6,849,608 --- --- ---

Van Kampen Mid Cap 483,646 127,383 --- ---
Growth (8)

MetLife Aggressive Strategy 701,061 98,965 --- ---

MetLife Balanced Strategy 3,127,701 166,290 --- 246,817

MetLife Defensive Strategy 454,077 170,658 --- ---

MetLife Growth Strategy 3,009,601 98,229 --- 178,334

MetLife Moderate Strategy 1,099,558 --- --- 78,534

Strategic Conservative Growth 11,819 11,819 24,846 ---

Strategic Growth 6,329 6,329 30,336 ---

Strategic Growth and Income 9,280 9,280 27,385 ---

10/31/06

Met/AIM Capital Appreciation (8) $1,760,214 $--- $--- $---

Pioneer Strategic Income (10) 1,565,645 --- --- ---
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------
(1) Formerly Neuberger Berman Real Estate.

(2) Formerly Federated High Yield.

(3) Formerly Mercury Large Cap Core.

(4) Formerly Janus Capital Appreciation.

(5) Formerly Met/AIM Mid Cap Core Equity.

(6) Formerly Legg Mason Aggressive Growth and Janus Aggressive Growth.

(7) Formerly RCM Global Technology.

(8) Formerly Lord Abbett Growth Opportunities.

(9) For the period from 11/1/06 through 12/31/06, fees paid to the Manager, any
fee waivers or reimbursements and any deferred expense reimbursements were
$251,836, $0, $0, $0, respectively.

(10) For the period from 11/1/06 through 12/31/06, fees paid to the Manager, any
fee waivers or reimbursements and any deferred expense reimbursements were
$288,983, $0, $0, $0, respectively.

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

12/31/05

Investment Investment Other Expenses Deferred Expense
Management Fee Management Fee Reimbursed Reimbursement
Portfolio Paid Waived
--------- ------------ ------------ ------------ --------------

Met/AIM Small Cap Growth $4,065,172 $--- $--- $186,470

BlackRock High Yield (1) 555,974 --- --- ---

BlackRock Large Cap Core 980,510 --- --- ---
Portfolio(2)

Clarion Global Real Estate (3) 2,760,936 --- --- ---

Dreman Small Cap Value 22,380 22,380 51,727 ---

Goldman Sachs Mid Cap 2,377,124 --- --- ---
Value

Harris Oakmark International 8,535,923 --- --- ---

Janus Forty(4) 7,347,893 --- --- ---

Lazard Mid Cap(5) 2,171,692 --- --- ---

Legg Mason Partners 4,470,882 --- --- 55,811
Aggressive Growth(6)

Legg Mason Partners Managed 1,412,933 --- ---
Assets

Legg Mason Value Equity(7) 5,322 5,322 42,358 ---

Lord Abbett Bond Debenture 7,382,524 --- --- ---

Lord Abbett Growth and 15,579,274 --- --- ---
Income

Lord Abbett Mid Cap Value 2,176,402 --- --- ---

MFS(R) Research International 6,477,000 --- --- 465,232

Oppenheimer Capital 5,967,811 --- --- 527,389
Appreciation

PIMCO Inflation Protected 4,472,486 --- --- ---
Bond

PIMCO Total Return 9,764,321 --- --- 232,938

Pioneer Fund 283,477 --- --- ---

RCM Technology(8) 1,874,614 973 --- 296,190

T. Rowe Price Mid Cap Growth 4,367,844 --- --- 2,646

Third Avenue Small Cap Value 5,688,594 --- --- ---

Turner Mid Cap Growth 1,478,543 --- --- ---

Van Kampen Comstock (9) 3,209,721 --- --- ---

Van Kampen Mid Cap 424,159 33,406 --- ---
Growth(10)

MetLife Aggressive Strategy 510,587 122,410 --- ---

MetLife Balanced Strategy 1,366,679 47,538 --- ---

MetLife Defensive Strategy 274,780 130,573 --- ---

MetLife Growth Strategy 1,264,098 47,117 --- ---

MetLife Moderate Strategy 822,266 45,545 --- ---

10/31/05
Met/AIM Capital Appreciation $1,932,760 $--- $--- $---

Pioneer Strategic Income 1,076,933 --- --- ---
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------

(1) Formerly Federated High Yield.

(2) Formerly Mercury Large Cap Core.

(3) Formerly Neuberger Berman Real Estate.

(4) Formerly Janus Capital Appreciation.

(5) Formerly Met/AIM Mid Cap Core Equity.

(6) Formerly Legg Mason Aggressive Growth and Janus Aggressive Growth.

(7) For the period from 11/1/05 through 12/31/05

(8) Formerly RCM Global Technology.

(9) For the period from 5/1/05 through 12/31/05

(10) Formerly Lord Abbett Growth Opportunities.

The Advisers

Pursuant to an Advisory Agreement with the Manager, each Adviser to a
Portfolio continuously furnishes an investment program for the Portfolio, makes
investment decisions on behalf of the Portfolio, places all orders for the
purchase and sale of investments for the Portfolio's account with brokers or
dealers selected by such Adviser and may perform certain limited related
administrative functions in connection therewith. For its services, the Manager
pays each Adviser a fee based on a percentage of the average daily net assets of
the Portfolios.

Each Advisory Agreement will continue in force for two years from its
commencement date, and from year to year thereafter, but only so long as its
continuation as to a Portfolio is specifically approved at least annually (i) by
the Trustees or by the vote of a majority of the outstanding voting securities
of the Portfolio, and (ii) by the vote of a majority of the Disinterested
Trustees by votes cast in person at a meeting called for the purpose of voting
on such approval. Each Advisory Agreement provides that it shall terminate
automatically if assigned or if the Management Agreement with respect to the
related Portfolio terminates, and that it may be terminated as to a Portfolio
without penalty by the Manager, by the Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Portfolio on not less than
60 days' prior written notice to the Adviser or by the Adviser on not less than
90 days' prior written notice to the Manager, or upon such shorter notice as may
be mutually agreed upon.

Each Advisory Agreement provides that the Adviser shall not be subject
to any liability to the Trust or the Manager for any act or omission in the
course of or connected with rendering services thereunder in the absence of
willful misconduct, bad faith, gross negligence or reckless disregard of its
duties on the part of the Adviser.

The Trust and the Manager have received an exemptive order from the
Securities and Exchange Commission ("Multi-Manager Order"). The Multi-Manager
Order permits the Manager, subject to approval of the Board of Trustees, to: (i)
select new or additional Advisers for the Trust's Portfolios; (ii) enter into
new investment advisory agreements and materially modify existing investment
advisory agreements; and (iii) terminate and replace the Advisers without
obtaining approval of the relevant Portfolio's shareholders. In such
circumstances, shareholders would receive notice of such action, including, if
applicable, the information concerning the Adviser that normally is provided in
a proxy statement. However, the Manager may not enter into an investment
advisory agreement with an "affiliated person" of the Manager (as that term is
defined in Section 2(a)(3) of the 1940 Act) ("Affiliated Adviser") unless the
investment advisory agreement with the Affiliated Adviser, including
compensation thereunder, is approved by the affected Portfolio's shareholders,
including, in instances in which the investment advisory agreement pertains to a
newly formed Portfolio, the Portfolio's initial shareholder. Although
shareholder approval is not required for the termination of Advisory Agreements,
shareholders of a Portfolio continue to have the right to terminate such
Agreements for the Portfolio at any time by a vote of a majority of outstanding
voting securities of the Portfolio.

Pursuant to the Multi-Manager Order, the Manager, effective January 1,
2003, changed Advisers for the State Street Concentrated International Portfolio
(now known as Harris Oakmark International Portfolio and MFS Mid Cap Growth
Portfolio (now known as T. Rowe Price Mid Cap Growth Portfolio). Effective
January 14, 2005, the Manager changed the Adviser to the PIMCO PEA Innovation
Portfolio (now known as RCM Technology Portfolio). Effective December 19, 2005
the Manager changed the Adviser to the Met/AIM Mid Cap Core Equity Portfolio
(now known as Lazard Mid Cap Portfolio). Effective August 21, 2006, the Manager
changed the Adviser to the Federated High Yield Portfolio (now known as
BlackRock High Yield Portfolio). Effective October 1, 2006 the Manager changed
the Adviser to the Lord Abbett Growth Opportunities Portfolio (now known as Van
Kampen Mid Cap Growth Portfolio). Effective October 1, 2006, the Manager changed
the Adviser to the Janus Aggressive Growth Portfolio (now known as Legg Mason
Partners Aggressive Growth Portfolio). Effective October 1, 2006, the Manager
changed the Adviser to the Mercury Large Cap Core Portfolio (now known as
BlackRock Large Cap Core Portfolio). Effective April 28, 2008, the Manager
changed the Adviser to the Neuberger Berman Real Estate Portfolio (now known as
Clarion Global Real Estate Portfolio). In approving new Advisers for these
Portfolios, the Board especially reviewed each Portfolio's performance record
and the replacement Adviser's management style and long-term performance record
with comparable funds.

Following are the Advisers to the Portfolios.

------------------------------------------------------ ---------------------------------------------------
Portfolio Adviser(s)
------------------------------------------------------ ---------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------

Met/AIM Capital Appreciation Invesco Aim Capital Management, Inc.

Met/AIM Small Cap Growth Invesco Aim Capital Management, Inc.

Clarion Global Real Estate ING Clarion Real Estate Securities L.P.

Met/Franklin Income Portfolio Franklin Advisers, Inc.

Met/Franklin Mutual Shares Portfolio Franklin Mutual Advisers, Inc.

- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Goldman Sachs Mid Cap Value Goldman Sachs Asset Management, L.P.
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Harris Oakmark International Harris Associates L.P.
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Janus Forty Janus Capital Management LLC
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Lazard Mid Cap Lazard Asset Management LLC
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Legg Mason Partners Aggressive Growth ClearBridge Advisors, LLC
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Legg Mason Partners Managed Assets Batterymarch Financial Management, Inc.
Western Asset Management Company
ClearBridge Advisors, LLC
Legg Mason Global Asset Allocation, LLC
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Legg Mason Value Equity Legg Mason Capital Management, Inc.
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Loomis Sayles Global Markets Loomis, Sayles & Company, L.P.
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Lord Abbett Bond Debenture Lord, Abbett & Co. LLC
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Lord Abbett Growth and Income Lord, Abbett & Co. LLC
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Lord Abbett Mid Cap Value Lord, Abbett & Co. LLC
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
MFS(R) Emerging Markets Equity Massachusetts Financial Services Company
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
MFS(R) Research International Massachusetts Financial Services Company
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation OppenheimerFunds, Inc.
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
PIMCO Inflation Protected Bond Pacific Investment Management Company LLC
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
PIMCO Total Return Pacific Investment Management Company LLC
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Pioneer Fund Pioneer Investment Management, Inc.
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Pioneer Strategic Income Pioneer Investment Management, Inc.
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
RCM Technology RCM Capital Management LLC
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Rainier Large Cap Equity Rainier Investment Management, Inc.
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
T. Rowe Price Mid Cap Growth T. Rowe Price Associates, Inc.
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Met/Templeton Growth Portfolio Templeton Global Advisors Limited
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Third Avenue Small Cap Value Third Avenue Management LLC
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Turner Mid Cap Growth Turner Investment Partners, Inc.
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Van Kampen Comstock Morgan Stanley Investment Management
Inc., d/b/a Van Kampen
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------

Van Kampen Mid Cap Growth Morgan Stanley Investment Management
Inc., d/b/a Van Kampen
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Strategic Conservative Growth Gallatin Asset Management, Inc.
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Strategic Growth Gallatin Asset Management, Inc.
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Strategic Growth and Income Gallatin Asset Management, Inc.
- ----------------------------------------------------------------------------------------------------------------

The following table shows the fees paid with respect to the Portfolios
to each Adviser (or prior Adviser) by the Manager or current affiliates of the
Manager for the fiscal years ended December 31, 2007, December 31, 2006 and
December 31, 2005 or October 31, 2006 and October 31, 2005, as noted.
- ---------------------------------------------- --------------- ----------------

Portfolio 12/31/07 12/31/06 12/31/05
--------- -------- -------- --------

Met/AIM Capital Appreciation $801,315 $N/A $N/A

Met/AIM Small Cap Growth 4,559,184 $3,576,194 $2,834,581

Batterymarch Growth and Income 1,417,674 949,401 N/A

BlackRock High Yield(1) 996,222 290,428 342,138

BlackRock Large Cap Core (2) 4,071,350 458,203 442,811

Clarion Global Real Estate (3) 4,691,895 3,316,989 1,532,812

Dreman Small Cap Value 806,960 211,455 12,198

Goldman Sachs Mid Cap Value 2,268,730 1,830,295 1,413,714

Harris Oakmark International 12,208,040 8,552,546 5,580,751

Janus Forty(4) 3,551,570 3,604,800 3,967,827

Lazard Mid Cap(5) 2,886,028 1,731,383 1,279,000

Legg Mason Partners Aggressive 3,222,082 2,908,325 2,483,363
Growth(6)

Legg Mason Partners Managed 717,405 753,708 796,047
Assets

Legg Mason Value Equity 5,414,178 2,428,561 3,422

Loomis Sayles Global Markets 3,346,169 1,260,814 N/A

Lord Abbett Bond Debenture 4,342,335 3,793,129 3,267,233

Lord Abbett Growth and Income 9,330,644 8,105,142 7,529,675

Lord Abbett Mid Cap Value 2,047,158 1,508,695 1,377,786

MFS(R) Emerging Markets 3,934,568 1,521,475 N/A

MFS(R) Research International 7,344,285 5,533,253 4,287,870

Oppenheimer Capital Appreciation 3,194,424 3,475,880 3,374,156

PIMCO Inflation Protected Bond 3,014,124 2,827,494 2,236,243

PIMCO Total Return 9,007,007 6,180,187 4,882,160

Pioneer Fund 175,854 160,112 141,738

Pioneer Strategic Income 926,013 N/A N/A

Rainier Large Cap Equity(11) 364,808 N/A N/A

RCM Technology(7) 1,859,444 1,606,312 1,284,865

T. Rowe Price Mid Cap Growth 4,712,834 3,916,356 2,867,713

Third Avenue Small Cap Value 8,333,276 5,529,774 3,663,156

Turner Mid Cap Growth 1,986,877 1,435,957 949,090

Van Kampen Comstock 5,731,603 4,000,299 1,899,968

Van Kampen Mid Cap Growth(8) 427,216 310,915 272,674

Strategic Conservative Growth(12) 191,928 3,940 N/A

Strategic Growth(12) 184,970 3,093 N/A

Strategic Growth and Income(12) 85,526 2,110 N/A

10/31/06 10/31/05

Met/AIM Capital Appreciation(9) 824,884 905,981

Pioneer Strategic Income (10) 751,048 502,569
- -------------------------------------------------------------------------------------------------
- ----------------------

(1) Formerly Federated High Yield.

(2) Formerly Mercury Large Cap Core.

(3) Formerly Neuberger Berman Real Estate.

(4) Formerly Janus Capital Appreciation.

(5) Formerly Met/AIM Mid Cap Core Equity.

(6) Formerly Legg Mason Aggressive Growth and Janus Aggressive Growth.

(7) Formerly RCM Global Technology.

(8) Formerly Lord Abbett Growth Opportunities.

(9) For the period from 11/1/06 through 12/31/06, fees paid to the Adviser were
$117,689.

(10) For the period from 11/1/06 through 12/31/06, fees paid to the Adviser were
$141,412.

(11) For the period from 11/1/07 through 12/31/07.

(12) For the period from 11/1/06 through 12/31/06.

Portfolio Management

Appendix C to this Statement of Addition Information contains
information regarding the committee members' or portfolio managers'
compensation, other accounts managed and ownership of shares of the Portfolios
to the extent applicable.

The Administrator

Pursuant to an administration agreement ("Administration Agreement"),
State Street Bank and Trust Company ("Administrator") assists the Manager in the
performance of its administrative services to the Trust and provides the Trust
with other necessary administrative services. In addition, the Administrator
makes available the office space, equipment, personnel and facilities required
to provide such administrative services to the Trust.

The Administrator was organized as a Massachusetts trust company. Its
principal place of business is at 2 Avenue de Lafayette, Boston, Massachusetts
02111. Under the Administration Agreement, the Administrator is entitled to a
fee from the Trust, which is calculated daily and paid monthly, at an annual
rate of approximately 0.01% of the average daily net assets of each Portfolio of
the Trust. The Administration Agreement is in effect until December 31, 2008 and
continues in effect for successive periods of one year, unless terminated by any
party upon not less than sixty (60) days' prior written notice to the other
party. For the years ended December 31, 2007, December 31, 2006, and December
31, 2005, an aggregate of $2,506,645, $3,424,737, and $2,105,465, respectively,
was paid to the Administrator.

Effective May 1, 2006, the Met/AIM Capital Appreciation, BlackRock High
Yield, Pioneer Fund, Pioneer Strategic Income, Dreman Small Cap Value, Janus
Forty, BlackRock Large Cap Core and Legg Mason Partners Managed Assets Portfolio
commenced operations as portfolios of the Trust. The predecessors of such
Portfolios and certain other portfolios that no longer exist paid administration
fees in 2005 in the aggregate amount of $1,114,719 and $336,527 for the period
January 1, 2006 through April 30, 2006.

The Distributor

With respect to the Portfolios, the Trust has distribution agreements
with MetLife Investors Distribution Company ("MLIDC" or the "Distributor") in
which MLIDC serves as the Distributor for the Trust's Class A, Class B, Class C
and Class E shares. MLIDC is an affiliate of Metropolitan Life Insurance
Company. MLIDC's address is 5 Park Plaza, Suite 1900, Irvine, California 92614.

The Trust's distribution agreements with respect to the Class A, Class
B, Class C and Class E shares ("Distribution Agreements") were initially
approved by the Board of Trustees at Board meetings held on December 7, 2000
(Class A, Class B, Class C) and April 23, 2001 (Class E). The Distribution
Agreements will remain in effect from year to year provided each Distribution
Agreement's continuance is approved annually by (i) a majority of the Trustees
who are not parties to such agreement or "interested persons" (as defined in the
1940 Act) of the Trust or a Portfolio and, if applicable, who have no direct or
indirect financial interest in the operation of the Class B, Class C or Class E
Distribution Plan or any such related agreement and (ii) either by vote of a
majority of the Trustees or a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Trust.

The Distributor or its affiliates for the Class A shares will pay for
printing and distributing prospectuses or reports prepared for their use in
connection with the offering of the Class A shares to prospective contract
owners and qualified plan participants and preparing, printing and mailing any
other literature or advertising in connection with the offering of the Class A
shares to prospective contract owners and qualified plan participants.

Pursuant to the Class B Distribution Plan, the Class C Distribution
Plan and the Class E Distribution Plan, the Trust compensates the Distributor
from assets attributable to the Class B, Class C and Class E shares, as
applicable, for services rendered and expenses borne in connection with
activities primarily intended to result in the sale of the Trust's Class B,
Class C and Class E shares. It is anticipated that a portion of the amounts
received by the Distributor will be used to defray various costs incurred or
paid by the Distributor in connection with the printing and mailing of Trust
prospectuses, statements of additional information and any supplements thereto
and shareholder reports, and holding seminars and sales meetings with wholesale
and retail sales personnel designed to promote the distribution of Class B,
Class C and Class E shares. The Distributor may also use a portion of the
amounts received to provide compensation to financial intermediaries and
third-party broker-dealers for their services in connection with the
distribution of the Class B, Class C and Class E shares.

The Class B Distribution Plan, the Class C Distribution Plan and the
Class E Distribution Plan provide that the Trust, on behalf of each Portfolio,
may pay annually up to 0.50%, 1.00% and 0.25%, respectively, of the average
daily net assets of a Portfolio attributable to its Class B shares, Class C
shares and Class E shares, respectively, in respect to activities primarily
intended to result in the sale of Class B, Class C and Class E shares. However,
under the Distribution Agreements, payments to the Distributor for activities
pursuant to the Class B Distribution Plan, the Class C Distribution Plan and the
Class E Distribution Plan are limited to payments at an annual rate equal to
0.25%, 0.55% and 0.15%, respectively, of average daily net assets of a Portfolio
attributable to its Class B shares, Class C shares and Class E shares,
respectively. Under the terms of the Class B Distribution Plan, the Class C
Distribution Plan and the Class E Distribution Plan and the related Distribution
Agreements, each Portfolio is authorized to make payments monthly to the
Distributor that may be used to pay or reimburse entities (including
Metropolitan Life Insurance Company and its affiliates) providing distribution
and shareholder servicing with respect to the Class B, Class C and Class E
shares for such entities' fees or expenses incurred or paid in that regard.

Each of the Class B Distribution Plan, the Class C Distribution Plan
and the Class E Distribution Plan is of a type known as a "compensation" plan
because payments are made for services rendered to the Trust with respect to
Class B, Class C and Class E shares regardless of the level of expenditures by
the Distributor. The Trustees will, however, take into account such expenditures
for purposes of reviewing operations under the Class B Distribution Plan, the
Class C Distribution Plan and the Class E Distribution Plan and in connection
with their annual consideration of the Class B Distribution Plan's, the Class C
Distribution Plan's and the Class E Distribution Plan's renewal. The Distributor
has indicated that it expects its expenditures to include, without limitation:
(a) the printing and mailing of Trust prospectuses, statements of additional
information, any supplements thereto and shareholder reports for prospective
Contract owners with respect to the Class B, Class C and Class E shares of the
Trust; (b) those relating to the development, preparation, printing and mailing
of advertisements, sales literature and other promotional materials describing
and/or relating to the Class B, Class C and Class E shares of the Trust; (c)
holding seminars and sales meetings designed to promote the distribution of
Class B, Class C and Class E shares of the Trust; (d) obtaining information and
providing explanations to wholesale and retail distributors of contracts
regarding Trust investment objectives and policies and other information about
the Trust and its Portfolios, including the performance of the Portfolios; (e)
training sales personnel regarding the Class B, Class C and Class E shares of
the Trust; and (f) financing any other activity that the Distributor determines
is primarily intended to result in the sale of Class B, Class C and Class E
shares.

A description of the Class B Distribution Plan with respect to the
Class B shares and related services and fees thereunder is provided in the
Prospectus for the Class B shares of the Portfolios. A description of the Class
C Distribution Plan with respect to the Class C shares and related services and
fees thereunder is provided in the Prospectus for the Class C shares of the
Portfolios. On December 7, 2000, the Board of Trustees of the Trust, including
the Disinterested Trustees unanimously approved the Class B Distribution Plan
and the Class C Distribution Plan. A description of the Class E Distribution
Plan with respect to the Class E shares and related services and fees thereunder
is provided in the Prospectus for the Class E shares of the Portfolios. On April
23, 2001, the Board of Trustees of the Trust, including the Disinterested
Trustees, unanimously approved the Class E Distribution Plan.

The Class B Distribution Plan, the Class C Distribution Plan and the
Class E Distribution Plan and any Rule 12b-1 related agreement that is entered
into by the Trust or the Distributor of the Class B, Class C and Class E shares
in connection with the Class B Distribution Plan, the Class C Distribution Plan
and the Class E Distribution Plan will continue in effect for a period of more
than one year only so long as continuance is specifically approved at least
annually by vote of a majority of the Trust's Board of Trustees, and of a
majority of the Disinterested Trustees, cast in person at a meeting called for
the purpose of voting on the Class B Distribution Plan, the Class C Distribution
Plan and the Class E Distribution Plan or any Rule 12b-1 related agreement, as
applicable. In addition, the Class B Distribution Plan, the Class C Distribution
Plan and the Class E Distribution Plan and any Rule 12b-1 related agreement may
be terminated as to Class B, Class C or Class E shares of a Portfolio at any
time, without penalty, by vote of a majority of the outstanding Class B, Class C
or Class E shares of the Portfolio, as applicable, or by vote of a majority of
the Disinterested Trustees. The Class B Distribution Plan, the Class C
Distribution Plan and the Class E Distribution Plan each also provides that it
may not be amended to increase materially the amount (up to 0.50% [1.00% with
respect to Class C and 0.25% with respect to Class E] of average daily net
assets annually) that may be spent for distribution of Class B, Class C and
Class E shares of any Portfolio without the approval of Class B, Class C and
Class E shareholders, as applicable, of that Portfolio.

The Distributor for each class of shares will pay all fees and expenses
in connection with its qualification and registration as a broker or dealer
under federal and state laws. In the capacity of agent, the Distributor
currently offers shares of each Portfolio on a continuous basis to the separate
accounts of insurance companies offering the Contracts in all states in which
the Portfolio or the Trust may from time to time be registered or where
permitted by applicable law. The Distribution Agreements provide that the
Distributor shall accept orders for shares at net asset value without a sales
commission or sale load being charged. The Distributor has made no firm
commitment to acquire shares of any Portfolio.

The table below shows the amount paid by each Portfolio to the
Distributor pursuant to the Class B and Class E Distribution Plans for the year
ended December 31, 2007:*

------------------------------------------------ -----------------------------------------------------
Portfolio Total Distribution Fee Paid to Distributor

Met/AIM Capital Appreciation $21,218

Met/AIM Small Cap Growth 782,654

BlackRock Large Cap Core 257,875

Clarion Global Real Estate (1) 1,637,003

Goldman Sachs Mid Cap Value 522,560

Harris Oakmark International 2,658,580

Janus Forty 22,495

Lazard Mid Cap 712,480

Legg Mason Partners Aggressive 603,989
Growth

Legg Mason Value Equity 327,436

Loomis Sayles Global Markets 63,543

Lord Abbett Bond Debenture 2,047,665

Lord Abbett Growth and Income 4,064,072

Lord Abbett Mid Cap Value 995,362

MFS(R) Emerging Markets 91,387

MFS(R) Research International 1,894,862

Oppenheimer Capital Appreciation 1,379,516

PIMCO Inflation Protected Bond 934,833

PIMCO Total Return 3,211,973

Rainier Large Cap Equity 1,285

RCM Technology 293,004

T. Rowe Price Mid Cap Growth 1,261,869

Third Avenue Small Cap Value 1,872,565

Turner Mid Cap Growth 189,747

Van Kampen Comstock 398,539

Van Kampen Mid Cap Growth 163,644

MetLife Aggressive Strategy 2,159,782

MetLife Balanced Strategy 15,106,598

MetLife Defensive Strategy 1,685,339

MetLife Growth Strategy 17,368,722

MetLife Moderate Strategy 4,948,645

Strategic Conservative Growth 673,750

Strategic Growth 392,509

Strategic Growth and Income 650,175

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

(1) Formerly Neuberger Berman Real Estate.

* Other than American Funds Bond Portfolio, American Funds Growth
Portfolio, American Funds International Portfolio, American Funds Balanced
Allocation Portfolio, American Funds Growth Allocation Portfolio and American
Funds Moderate Allocation Portfolio, the Portfolios currently do not offer Class
C shares.

The amounts received by the Distributor have been used to defray
various costs incurred or paid by the Distributor in connection with the
printing and mailing of Trust prospectuses, statements of additional information
and any supplements thereto and shareholder reports, and holding seminars and
sales meetings with wholesale and retail sales personnel designed to promote the
distribution of Class B and Class E shares.

Code of Ethics

The Trust, its Manager, its Distributor, and each of its Advisers, have
adopted Codes of Ethics pursuant to Rule 17j-1 under the 1940 Act. Each of these
Codes of Ethics permits the personnel of their respective organizations to
invest in securities for their own accounts, including securities that may be
purchased or held by the Portfolios. A copy of each of the Codes of Ethics is on
public file with, and is available from, the Securities and Exchange Commission.

Custodian

State Street Bank and Trust Company ("State Street Bank"), located at 2
Avenue de Lafayette, Boston, Massachusetts 02111, serves as the custodian of the
Trust. Under the custody agreement, State Street Bank holds the Portfolios'
securities, provides fund accounting and keeps all necessary records and
documents.

Transfer Agent

Metropolitan Life Insurance Company, located at 501 Boylston Street,
Boston, Massachusetts 02116 serves as transfer agent for the Trust.

Legal Matters

Certain legal matters are passed on for the Trust by Sullivan & Worcester
LLP, 1666 K Street, N.W., Washington, D.C. 20006.

Independent Registered Public Accounting Firm

Deloitte & Touche LLP, located at 200 Berkeley Street, Boston
Massachusetts, serves as the Trust's independent auditors.

REDEMPTION OF SHARES

The Trust may suspend redemption privileges or postpone the date of
payment on shares of the Portfolios for more than seven days during any period
(1) when the New York Stock Exchange is closed or trading on that Exchange is
restricted as determined by the Securities and Exchange Commission; (2) when an
emergency exists, as defined by the Securities and Exchange Commission, which
makes it not reasonably practicable for a Portfolio to dispose of securities
owned by it or fairly to determine the value of its assets; or (3) as the
Securities and Exchange Commission may otherwise permit.

The value of the shares on redemption may be more or less than the
shareholder's cost, depending upon the market value of the portfolio securities
at the time of redemption.

NET ASSET VALUE

The net asset value per share of each Portfolio is determined as of the
close of regular trading of the New York Stock Exchange (currently 4:00 p.m.,
Eastern Time), each day that Exchange is open for trading. Currently, the New
York Stock Exchange is closed on: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Portfolio securities for which the primary
market is a domestic or foreign exchange will be valued at the last sale price
on the day of valuation or, if there was no sale that day, at the last reported
bid price, using prices as of the close of trading. Portfolio securities traded
over-the-counter and reported on NASDAQ will report the Nasdaq Official Closing
Price ("NOCP"). The NOCP will be calculated on each business day at 4:00:02 p.m.
Eastern time as follows: (i) if the last traded price of a listed security
reported by a Nasdaq member falls within the current best bid and ask price,
then the NOCP will be the last traded price; (ii) if the last traded price falls
outside of that range, however, the NOCP will be the last bid price (if higher)
or the last ask price (if lower). Portfolio securities which are traded
over-the-counter and not quoted on the NASDAQ System that are actively traded in
the over-the-counter market, including listed securities for which the primary
market is believed to be over-the-counter, will be valued at the most recently
quoted bid price provided by the principal market makers.

In the case of any securities which are not actively traded, reliable
market quotations may not be considered to be readily available. These
investments are stated at fair value as determined under the direction of the
Trustees. Such fair value is expected to be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.

If any securities held by a Portfolio are restricted as to resale,
their fair value will be determined following procedures approved by the
Trustees. The fair value of such securities is generally determined as the
amount which the Portfolio could reasonably expect to realize from an orderly
disposition of such securities over a reasonable period of time. The valuation
procedures applied in any specific instance are likely to vary from case to
case. However, consideration is generally given to the financial position of the
issuer and other fundamental analytical data relating to the investment and to
the nature of the restrictions on disposition of the securities (including any
registration expenses that might be borne by the Portfolio in connection with
such disposition). In addition, specific factors are also generally considered,
such as the cost of the investment, the market value of any unrestricted
securities of the same class (both at the time of purchase and at the time of
valuation), the size of the holding, the prices of any recent transactions or
offers with respect to such securities and any available analysts' reports
regarding the issuer.

Notwithstanding the foregoing, short-term debt securities with maturities
of 60 days or less will be valued at amortized cost.

Foreign securities traded outside the United States will be valued
daily at their fair value according to procedures decided upon in good faith by
the Trust's Board of Trustees. All securities and other assets of a Portfolio
initially expressed in foreign currencies will be converted to U.S. dollar
values at the mean of the bid and offer prices of such currencies against U.S.
dollars quoted as designated on the Price Source Authorization Agreement between
the Trust and its custodian on a valuation date by any recognized dealer.

The Manager may, from time to time, under the general supervision of
the Board of Trustees or the valuation committee, utilize the services of one or
more pricing services available in valuating the assets of the Trust. The
Manager will continuously monitor the performance of these services.

FEDERAL INCOME TAXES

Each Portfolio, including each Underlying Portfolio, intends to qualify
each year as a "regulated investment company" under the Code. By so qualifying,
a Portfolio will not be subject to federal income taxes to the extent that its
net investment income and net realized capital gains are distributed to its
shareholders.

In order to so qualify, a Portfolio must, among other things, (1)
derive at least 90% of its gross income in each taxable year from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stocks or securities or foreign currencies, or other income
(including but not limited to gains from options, futures or forward contracts)
derived with respect to its business of investing in such stocks or securities,
and net income derived from an interest in a qualified publicly traded
partnership; and (2) diversify its holdings so that, at the end of each quarter
of the Portfolio's taxable year, (a) at least 50% of the market value of the
Portfolio's assets is represented by cash, government securities, securities of
other regulated investment companies and other securities limited in respect of
any one issuer to 5% of the value of the Portfolio's assets and to not more than
10% of the voting securities of such issuer, and (b) not more than 25% of the
value of its assets is invested in securities of any one issuer (other than
government securities or the securities of other regulated investment companies)
or the securities of one or more qualified publicly traded partnerships. For
this purpose, a qualified publicly traded partnership is any publicly traded
partnership other than one whose income is derived almost entirely from income
which would be qualified income for a regulated investment company (that is,
dividends, interest, payments with respect to securities loans, gains from the
disposition of stock or securities, and the like) in any event.

As a regulated investment company, a Portfolio will not be subject to
federal income tax on net investment income and capital gains (short- and
long-term), if any, that it distributes to its shareholders if at least 90% of
its net investment income and net short-term capital gains for the taxable year
are distributed, but will be subject to tax at regular corporate rates on any
income or gains that are not distributed. In general, dividends will be treated
as paid when actually distributed, except that dividends declared in October,
November or December and made payable to shareholders of record in such a month
will be treated as having been paid by the Portfolio (and received by
shareholders) on December 31, provided the dividend is paid in the following
January. Each Portfolio intends to satisfy the distribution requirement in each
taxable year.

The Portfolios will not be subject to the 4% federal excise tax imposed
on regulated investment companies that do not distribute all of their income and
gains each calendar year because such tax does not apply to a regulated
investment company whose only shareholders are either tax-exempt pension trusts
or segregated asset accounts of life insurance companies held in connection with
variable annuity and/or variable life insurance policies.

The Trust intends to comply with section 817(h) of the Code and the
regulations issued thereunder. As required by regulations under that section,
the only shareholders of the Trust and its Portfolios will be life insurance
company segregated asset accounts (also referred to as separate accounts) that
fund variable life insurance or annuity contracts, tax-exempt pension trusts,
and MetLife Investors USA Insurance Company, the initial shareholder of the
Portfolios, and its affiliates. See the prospectus or other material for the
Contracts for additional discussion of the taxation of segregated asset accounts
and of the owner of the particular Contract described therein.

Section 817(h) of the Code and Treasury Department regulations
thereunder impose certain diversification requirements on the segregated asset
accounts investing in the Portfolios of the Trust. These requirements, which are
in addition to the diversification requirements applicable to the Trust under
the 1940 Act and under the regulated investment company provisions of the Code,
may limit the types and amounts of securities in which the Portfolios or
Underlying Portfolios may invest. Failure to meet the requirements of section
817(h) could result in current taxation of the owner of the Contract on the
income of the Contract. For this purpose, an investment in an Underlying
Portfolio is treated not as a single investment but as an investment in each
asset owned by the Underlying Portfolio, so long as shares of the Underlying
Portfolio are owned only by separate accounts of insurance companies, by
qualified pension and retirement plans, and by a limited class of other
investors. The Portfolios and Underlying Portfolios are and will be so owned.
Thus so long as each Portfolio and Underlying Portfolio meets the section 817(h)
diversification tests, each Contract will also meet those tests. See the
prospectus for the Contracts.

The Trust may therefore find it necessary to take action to ensure that
a Contract continues to qualify as a Contract under federal tax laws. The Trust,
for example, may be required to alter the investment objectives of a Portfolio
or Underlying Portfolio or substitute the shares of one Portfolio or Underlying
Portfolio for those of another. No such change of investment objectives or
substitution of securities will take place without notice to the shareholders of
the affected Portfolio and the approval of a majority of such shareholders and
without prior approval of the Securities and Exchange Commission, to the extent
legally required.

In certain foreign countries, interest and dividends are subject to a
tax which is withheld by the issuer. U.S. income tax treaties with certain
countries reduce the rates of these withholding taxes. The Trust intends to
provide the documentation necessary to achieve the lower treaty rate of
withholding whenever applicable or to seek refund of amounts withheld in excess
of the treaty rate.

Portfolios that invest in foreign securities may purchase the
securities of certain foreign investment funds or trusts called passive foreign
investment companies. Such trusts have been the only or primary way to invest in
certain countries. In addition to bearing their proportionate share of a
Portfolio's expenses (management fees and operating expenses), shareholders will
also indirectly bear similar expenses of such trusts. Capital gains on the sale
of such holdings are considered ordinary income regardless of how long a
Portfolio held its investment. In addition, a Portfolio could be subject to
corporate income tax and an interest charge on certain dividends and capital
gains earned from these investments, regardless of whether such income and gains
are distributed to shareholders. To avoid such tax and interest, each
Portfolio's investment adviser intends to treat these securities as sold on the
last day of its fiscal year and recognize any gains for tax purposes at that
time; deductions for losses are allowable only to the extent of any gains
resulting from these deemed sales for prior taxable years. Such gains will be
considered ordinary income, which a Portfolio will be required to distribute
even though it has not sold the security.

Income that Clarion Global Real Estate Portfolio derives from a company
principally engaged in the real estate industry that is classified for federal
tax purposes as a partnership (and not as a corporation, qualified publicly
traded partnership or REIT) ("RE Partnership") will be treated under the Code as
qualifying income under the income requirement only to the extent that income is
attributable to the RE Partnership's income that would be qualifying income if
realized directly by the Portfolio in the same manner as realized by the RE
Partnership. The Internal Revenue Service also has issued numerous private
letter rulings (which may not be relied on by taxpayers other than the
addressees thereof but nevertheless indicate the Service's view of federal tax
matters) holding that a regulated investment company that invests in a
partnership should be treated as owning a proportionate share of the
partnership's assets for purposes of the diversification requirement.

Clarion Global Real Estate Portfolio may invest in REITs that hold
residual interests in real estate mortgage investment conduits ("REMICs"). Under
Treasury regulations that have not yet been issued but may apply retroactively,
the portion of a REIT's income attributable to its residual interest in a REMIC
(referred to in the Code as an "excess inclusion") will be subject to federal
income tax and will be allocated to the REIT's shareholders in proportion to the
dividends they receive. These regulations also are expected to provide that
excess inclusion income of a regulated investment company, such as the
Portfolio, will be allocated to its shareholders in proportion to the dividends
they receive, with the same consequences as if they held the related REMIC
residual interest directly. In general, excess inclusion income allocated to
shareholders for a taxable year (1) cannot be offset by net operating losses
(subject to a limited exception for certain thrift institutions), (2) will
constitute unrelated business taxable income ("UBTI") to certain tax-exempt
entities (including qualified pension plans, IRAs, Code section 401(k) plans,
Keogh plans, and public charities), thereby potentially requiring such an entity
that otherwise might not be required to file tax return for that year to file a
tax return and pay tax on such income and (3) resulting in tax liability for a
segregated asset account of an insurance company to which excess inclusion
income is allocated. In addition, if at any time during any taxable year a
"disqualified organization" (including governmental units, certain tax-exempt
entities, and certain cooperatives) is a record holder of a share in a regulated
investment company, then the regulated investment company will be subject to a
tax equal to the portion of its excess inclusion income for the taxable year
that is allocable to the disqualified organization multiplied by the highest
federal income tax rate imposed on corporations. The Portfolio does not intend
to invest in REITs that have a substantial portion of their assets in residual
interests of REMICs.

ORGANIZATION AND CAPITALIZATION OF THE TRUST

The Trust is a Delaware business trust organized on July 27, 2000. A
copy of the Trust's Agreement and Declaration of Trust, which is governed by
Delaware law, is filed as an exhibit to the Trust's registration statement. The
Trust is the successor to the Security First Trust and Cova Series Trust, the
series of which were converted to Portfolios of the Trust, effective February
12, 2001. Effective May 1, 2002, Met/AIM Mid Cap Equity Portfolio changed its
name to Met/AIM Mid Cap Core Equity Portfolio. Effective January 1, 2003, State
Street Research Concentrated International Portfolio changed its name to Harris
Oakmark International Portfolio and MFS Mid Cap Growth Portfolio changed its
name to T. Rowe Price Mid Cap Growth Portfolio. Effective May 1, 2004, PIMCO
Innovation Portfolio changed its name to PIMCO PEA Innovation Portfolio.
Effective May 1, 2005, PIMCO PEA Innovation Portfolio changed its name to RCM
Global Technology Portfolio and effective April 30, 2007, RCM Global Technology
Portfolio changed its name to RCM Technology Portfolio. Effective December 19,
2005 Met/AIM Mid Cap Core Equity Portfolio changed its name to Lazard Mid Cap
Portfolio. Effective August 21, 2006, Federated High Yield Portfolio changed its
name to BlackRock High Yield Portfolio. Effective October 1, 2006, Lord Abbett
Growth Opportunities Portfolio changed its name to Van Kampen Mid Cap Growth
Portfolio. Effective October 1, 2006, Janus Aggressive Growth Portfolio changed
its name to Legg Mason Aggressive Growth Portfolio and effective April 30, 2007,
Legg Mason Aggressive Growth Portfolio changed its name to Legg Mason Partners
Aggressive Growth Portfolio. Effective October 1, 2006, Mercury Large Cap Core
Portfolio changed its name to BlackRock Large Cap Core Portfolio. Effective
April 30, 2007, Janus Capital Appreciation Portfolio changed its name to Janus
Forty Portfolio. Effective April 28, 2008, Neuberger Berman Real Estate
Portfolio changed its name to Clarion Global Real Estate Portfolio. The Trust is
also the successor of Managed Assets Trust, Capital Appreciation Fund and
certain portfolios of The Travelers Series Trust. Such funds were converted to
Portfolios of the Trust, effective May 1, 2006.

The Trustees of the Trust have authority to issue an unlimited number
of shares of beneficial interest, par value $.001 per share, of one or more
series. Currently, the Trustees have established and designated fifty-four
series, fifty-two of which are currently being offered. Each series of shares
represents the beneficial interest in a separate Portfolio of assets of the
Trust, which is separately managed and has its own investment objective and
policies. The Trustees of the Trust have authority, without the necessity of a
shareholder vote, to establish additional portfolios and series of shares. The
shares outstanding are, and those offered hereby when issued will be, fully paid
and nonassessable by the Trust. The shares have no preemptive, conversion or
subscription rights and are fully transferable.

The Trust is authorized to issue four classes of shares (Class A, Class
B, Class C and Class E) on behalf of each Portfolio. Lord Abbett Bond Debenture,
T. Rowe Price Mid Cap GrowthThe Prospectus for each Portfolio describes the
classes of shares currently being offered. Class A shares are offered at net
asset value and are not subject to distribution fees imposed pursuant to a
distribution plan. Class B, Class C and Class E shares are offered at net asset
value and are subject to distribution fees imposed pursuant to each Class'
Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act.

Class A, Class B, Class C and Class E shares are currently offered
under the Trust's multi-class distribution system approved by the Trust's Board
of Trustees on December 7, 2000, which is designed to allow promotion of
insurance products investing in the Trust through alternative distribution
channels. Under the Trust's multi-class distribution system, shares of each
class of a Portfolio represent an equal pro rata interest in that Portfolio and,
generally, will have identical voting, dividend, liquidation, and other rights,
other than the payment of distribution fees under the Distribution Plan.

The Trust continuously offers its shares to separate accounts of
insurance companies in connection with the Contracts. Class A, Class B, Class C
and Class E shares currently are sold to insurance company separate accounts in
connection with Contracts issued by the following affiliated insurance companies
- - Metropolitan Life Insurance Company, MetLife Investors Insurance Company,
First MetLife Investors Insurance Company, MetLife Investors USA Insurance
Company, New England Financial Life Insurance Company, General American Life
Insurance Company and MetLife Insurance Company of Connecticut (collectively,
"MetLife"). As of December 31, 2007, MetLife owned substantially all of the
Trust's outstanding Class A, Class B and Class E shares and, as a result, may be
deemed to be a control person with respect to the Trust. No Class C shares were
outstanding as of December 31, 2007.

As a "series" type of mutual fund, the Trust issues separate series of
share of beneficial interest with respect to each Portfolio. Each Portfolio
resembles a separate fund issuing a separate class of stock. Because of current
federal securities law requirements, the Trust expects that its shareholders
will offer to owners of the Contracts ("Contract owners") the opportunity to
instruct them as to how shares allocable to their Contracts will be voted with
respect to certain matters, such as approval of investment advisory agreements.
To the Trust's knowledge, as of December 31, 2007, none of the Contracts
currently owned entitled any individual to give voting instructions regarding
more than 5% of the outstanding shares of any Portfolio.

The Trust may in the future offer its shares to separate accounts of
other insurance companies. The Trust does not currently foresee any
disadvantages to Contract owners arising from offering the Trust's shares to
separate accounts of insurance companies that are unaffiliated with each other.
However, it is theoretically possible that, at some time, the interests of
various Contract owners participating in the Trust through their separate
accounts might conflict. In the case of a material irreconcilable conflict, one
or more separate accounts might withdraw their investments in the Trust, which
would possibly force the Trust to sell portfolio securities at disadvantageous
prices. The Trustees of the Trust intend to monitor events for the existence of
any material irreconcilable conflicts between or among such separate accounts
and will take whatever remedial action may be necessary.

The assets received from the sale of shares of a Portfolio, and all
income, earnings, profits and proceeds thereof, subject only to the rights of
creditors, constitute the underlying assets of the Portfolio. The underlying
assets of a Portfolio are required to be segregated on the Trust's books of
account and are to be charged with the expenses with respect to that Portfolio.
Any general expenses of the Trust not readily attributable to a Portfolio will
be allocated by or under the direction of the Trustees in such manner as the
Trustees determine to be fair and equitable, taking into consideration, among
other things, the nature and type of expense and the relative sizes of the
Portfolio and the other Portfolios.

Each share has one vote, with fractional shares voting proportionately.
Shareholders of a Portfolio are not entitled to vote on any matter that requires
a separate vote of the shares of another Portfolio but which does not affect the
Portfolio. The Trust's Agreement and Declaration of Trust does not require the
Trust to hold annual meetings of shareholders. Thus, there will ordinarily be no
annual shareholder meetings, unless otherwise required by the 1940 Act. The
Trustees of the Trust may appoint their successors until fewer than a majority
of the Trustees have been elected by shareholders, at which time a meeting of
shareholders will be called to elect Trustees. Under the Agreement and
Declaration of Trust, any Trustee may be removed by vote of the Trustees or vote
of two-thirds of the outstanding shares of the Trust. Holders of 10% or more of
the outstanding shares can require the Trustees to call a meeting of
shareholders for the purpose of voting on the removal of one or more Trustees.
If ten or more shareholders who have been such for at least six months and who
hold in the aggregate shares with a net asset value of at least $25,000 inform
the Trustees that they wish to communicate with other shareholders, the Trustees
either will give such shareholders access to the shareholder lists or will
inform them of the cost involved if the Trust forwards materials to the
shareholders on their behalf. If the Trustees object to mailing such materials,
they must inform the Securities and Exchange Commission and thereafter comply
with the requirements of the 1940 Act.

FINANCIAL STATEMENTS

The financial statements of the Met/AIM Capital Appreciation, Met/AIM
Small Cap Growth, Batterymarch Growth and Income, BlackRock High Yield,
BlackRock Large Cap Core Portfolio, Clarion Global Real Estate, Dreman Small Cap
Value, Goldman Sachs Mid Cap Value, Harris Oakmark International, Janus Forty,
Lazard Mid Cap, Legg Mason Partners Aggressive Growth, Legg Mason Partners
Managed Assets, Legg Mason Value Equity, Loomis Sayles Global Markets, Lord
Abbett Bond Debenture, Lord Abbett Growth and Income, Lord Abbett Mid Cap Value,
MetLife Aggressive Strategy, MetLife Balanced Strategy, MetLife Defensive
Strategy, MetLife Growth Strategy, MetLife Moderate Strategy, MFS(R) Emerging
Markets Equity, MFS(R) Research International, Oppenheimer Capital Appreciation,
PIMCO Inflation Protected Bond, PIMCO Total Return, Pioneer Fund, Pioneer
Strategic Income, Rainier Large Cap Equity, RCM Technology, Strategic
Conservative Growth, Strategic Growth, Strategic Growth and Income, T. Rowe
Price Mid Cap Growth, Third Avenue Small Cap Value, Turner Mid Cap Growth, Van
Kampen Comstock and Van Kampen Mid Cap Growth Portfolios for the year ended
December 31, 2007, including notes to the financial statements and financial
highlights and the Report of Independent Registered Public Accounting Firm
Deloitte & Touche LLP, are included in the Annual Report of the Trust, which is
incorporated by reference in this Statement of Additional Information.

APPENDIX A

Securities Ratings

Standard & Poor's Bond Ratings

A Standard & Poor's corporate debt rating is a current assessment of
the creditworthiness of an obligor with respect to a specific obligation. Debt
rated "AAA" has the highest rating assigned by Standard & Poor's. Capacity to
pay interest and repay principal is extremely strong. Debt rated "AA" has a very
strong capacity to pay interest and to repay principal and differs from the
highest rated issues only in small degree. Debt rated "A" has a strong capacity
to pay interest and repay principal although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic conditions than
debt of a higher rated category. Debt rated "BBB" is regarded as having an
adequate capacity to pay interest and repay principal. Whereas it normally
exhibits adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
to repay principal for debt in this category than for higher rated categories.
Bonds rated "BB", "B", "CCC" and "CC" are regarded, on balance, as predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligation. "BB" indicates the
lowest degree of speculation and "CC" the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions. The rating "C" is reserved for income bonds on which no interest is
being paid. Debt rated "D" is in default, and payment of interest and/or
repayment of principal is in arrears. The ratings from "AA" to "B" may be
modified by the addition of a plus or minus sign to show relative standing
within the major rating categories.

Moody's Bond Ratings

Bonds which are rated "Aaa" are judged to be the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin, and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds which are rated
"Aa" are judged to be of high quality by all standards. Together with the Aaa
group they comprise what are generally known as high grade bonds. They are rated
lower than the best bonds because margins of protection may not be as large as
in Aaa securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term risks
appear somewhat larger than in Aaa securities. Moody's applies numerical
modifiers 1, 2 and 3 in the Aa and A rating categories. The modifier 1 indicates
that the security ranks at a higher end of the rating category, modifier 2
indicates a mid-range rating and the modifier 3 indicates that the issue ranks
at the lower end of the rating category. Bonds which are rated "A" possess many
favorable investment attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest are considered
adequate but elements may be present which suggest a susceptibility to
impairment sometime in the future. Bonds which are rated "Baa" are considered as
medium grade obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have speculative
characteristics as well. Bonds which are rated "Ba" are judged to have
speculative elements; their future cannot be considered as well assured. Often
the protection of interest and principal payments may be very moderate, and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class. Bonds which are rated
"B" generally lack characteristics of the desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the contract
over any long period of time may be small. Bonds which are rated "Caa" are of
poor standing. Such issues may be in default or there may be present elements of
danger with respect to principal or interest. Bonds which are rated "Ca"
represent obligations which are speculative in a high degree. Such issues are
often in default or have other marked shortcomings. Bonds which are rated "C"
are the lowest rated class of bonds, and issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment standing.

Standard & Poor's Commercial Paper Ratings

"A" is the highest commercial paper rating category utilized by
Standard & Poor's, which uses the numbers "1+", "1", "2" and "3" to denote
relative strength within its "A" classification. Commercial paper issuers rated
"A" by Standard & Poor's have the following characteristics. Liquidity ratios
are better than industry average. Long-term debt rating is "A" or better. The
issuer has access to at least two additional channels of borrowing. Basic
earnings and cash flow are in an upward trend. Typically, the issuer is a strong
company in a well-established industry and has superior management. Issues rated
"B" are regarded as having only an adequate capacity for timely payment.
However, such capacity may be damaged by changing conditions or short-term
adversities. The rating "C" is assigned to short-term debt obligations with a
doubtful capacity for repayment. An issue rated "D" is either in default or is
expected to be in default upon maturity.

Moody's Commercial Paper Ratings

"Prime-1" is the highest commercial paper rating assigned by Moody's,
which uses the numbers "1", "2" and "3" to denote relative strength within its
highest classification of Prime. Commercial paper issuers rated Prime by Moody's
have the following characteristics. Their short-term debt obligations carry the
smallest degree of investment risk. Margins of support for current indebtedness
are large or stable with cash flow and asset protection well assured. Current
liquidity provides ample coverage of near-term liabilities and unused
alternative financing arrangements are generally available. While protective
elements may change over the intermediate or longer terms, such changes are most
unlikely to impair the fundamentally strong position of short-term obligations.

Fitch IBCA, Inc. Commercial Paper Ratings. Fitch Investors Service L.P. employs
the rating F-1+ to indicate issues regarded as having the strongest degree of
assurance for timely payment. The rating F-1 reflects an assurance of timely
payment only slightly less in degree than issues rated F-1+, while the rating
F-2 indicates a satisfactory degree of assurance for timely payment, although
the margin of safety is not as great as indicated by the F-1+ and F-1
categories.

Duff & Phelps Inc. Commercial Paper Ratings. Duff & Phelps Inc. employs the
designation of Duff 1 with respect to top grade commercial paper and bank money
instruments. Duff 1+ indicates the highest certainty of timely payment:
short-term liquidity is clearly outstanding, and safety is just below risk-free
U.S. Treasury short-term obligations. Duff 1- indicates high certainty of timely
payment. Duff 2 indicates good certainty of timely payment: liquidity factors
and company fundamentals are sound.

Thomson BankWatch, Inc. ("BankWatch") Commercial Paper Ratings. BankWatch will
assign both short-term debt ratings and issuer ratings to the issuers it rates.
BankWatch will assign a short-term rating ("TBW-1", "TBW-2", "TBW-3", or
"TBW-4") to each class of debt (e.g., commercial paper or non-convertible debt),
having a maturity of one-year or less, issued by a holding company structure or
an entity within the holding company structure that is rated by BankWatch.
Additionally, BankWatch will assign an issuer rating ("A", "A/B", "B", "B/C",
"C", "C/D", "D", "D/E", and "E") to each issuer that it rates.

Various of the NRSROs utilize rankings within rating categories
indicated by a + or -. The Portfolios, in accordance with industry practice,
recognize such rankings within categories as graduations, viewing for example
Standard & Poor's rating of A-1+ and A-1 as being in Standard & Poor's highest
rating category.

APPENDIX B

PROXY VOTING POLICIES AND PROCEDURES

INVESCO PERPETUAL

POLICY ON CORPORATE GOVERNANCE

1. INTRODUCTION

INVESCO PERPETUAL (IP) has adopted a clear and considered policy towards its
responsibility as a shareholder. As part of this policy, IP will take steps to
satisfy itself about the extent to which the companies in which it invests
comply with local recommendations and practices, such as the UK Combined Code
issued by the Committee on Corporate Governance and/or the US Department of
Labour Interpretive Bulletins.

2. RESPONSIBLE VOTING

IP has a responsibility to optimise returns to its clients. As a core part
of the investment process, Fund Managers will endeavour to establish a dialogue
with management to promote company decision making that is in the best
interests of shareholders, and is in accordance with good Corporate Governance
principles.

IP considers that shareholder activism is fundamental to good Corporate
Governance. Whilst this does not entail intervening in daily management
decisions, it does involve supporting general standards for corporate activity
and, where necessary, taking the initiative to ensure those standards are met.

One important means of putting shareholder responsibility into practice is
via the exercising of voting rights. In deciding whether to vote shares, IP
will take into account such factors as the likely impact of voting on
management activity, and where expressed, the preference of clients. As a
result of these two factors, IP will tend to vote on all UK and European
shares, but to vote on a more selective basis on other shares. (See Appendix
i--Voting on non-UK/European shares)

IP considers that the voting rights attached to its clients' investments
should be actively managed with the same duty of care as that applied to all
other aspects of asset administration. As such, voting rights will be exercised
on an informed and independent basis, and will not simply be passed back to the
company concerned for discretionary voting by the Chairman. In doing this, IP
will have in mind three objectives:

i) To protect the rights of its clients

ii) To minimise the risk of financial or business impropriety within the
companies in which its clients are invested, and

iii) To protect the long-term value of its clients' investments.

It is important to note that, when exercising voting rights, a third option
of abstention can also be used as a means of expressing dissatisfaction, or
lack of support, to a Board on a particular issue. Additionally, in the event
of a conflict of interest arising between IP and its clients over a specific
issue, IP will either abstain or seek instruction from each client.

IP will exercise actively the voting rights represented by the shares it
manages on behalf of its investors.

Note: Share Blocking

Generally, IP will not vote where this results in shares being blocked from
trading for a period of more than a few hours. IP considers that it is not in
the interest of clients that their shares are blocked at a potentially
sensitive time, such as that around a shareholder meeting.

3. VOTING PROCEDURES

IP will endeavour to keep under regular review with trustees, depositaries
and custodians the practical arrangements for circulating company resolutions
and notices of meetings and for exercising votes in accordance with standing or
special instructions.

IP will endeavour to review regularly any standing or special instructions
on voting and where possible, discuss with company representatives any
significant issues.

IP will take into account the implications of stock lending arrangements
where this is relevant (that is, when stock is lent to the extent permitted by
local regulations, the voting rights attaching to that stock pass to the
borrower). If a stock is on loan and therefore cannot be voted, it will not
necessarily be recalled in instances where we would vote with management.
Individual IP Fund Managers enter securities lending arrangements at their own
discretion and where they believe it is for the potential benefit of their
investors.

4. DIALOGUE WITH COMPANIES

IP will endeavour, where practicable in accordance with its investment
processes, to enter into a dialogue with companies based on the mutual
understanding of objectives. This dialogue is likely to include regular
meetings with company representatives to explore any concerns about corporate
governance where these may impact on the best interests of clients. In
discussion with Company Boards and senior non-Executive Directors, IP will
endeavour to cover any matters with particular relevance to shareholder value.

Specifically when considering resolutions put to shareholders, IP will pay
attention to the companies' compliance with the relevant local requirements. In
addition, when analysing the company's prospects for future profitability and
hence returns to shareholders, IP will take many variables into account,
including but not limited to, the following:

. Nomination and audit committees

. Remuneration committee and directors' remuneration

. Board balance and structure

. Financial reporting principles

. Internal control system and annual review of its effectiveness

. Dividend and Capital Management policies

5. NON-ROUTINE RESOLUTIONS AND OTHER TOPICS

These will be considered on a case-by-case basis and where proposals are put
to the vote will require proper explanation and justification by (in most
instances) the Board. Examples of such would be all SRI issues (i.e. those with
social, environmental or ethical connotations), political donations, and any
proposal raised by a shareholder or body of shareholders (typically a pressure
group).

Apart from the three fundamental voting objectives set out under
'Responsible Voting' above, considerations that IP might apply to non-routine
proposals will include:

i) The degree to which the company's stated position on the issue could
affect its reputation and/or sales, or leave it vulnerable to boycott or
selective purchasing

ii) What other companies have done in response to the issue

iii) Whether implementation would achieve the objectives sought in the
proposal

iv) Whether the matter is best left to the Board's discretion.

6. EVALUATION OF COMPANIES' CORPORATE GOVERNANCE ARRANGEMENTS

IP will, when evaluating companies' governance arrangements, particularly
those relating to board structure and composition, give due weight to all
relevant factors drawn to their attention.

7. DISCLOSURE

On request from clients, IP will in good faith provide records of voting
instructions given to third parties such as trustees, depositaries and
custodians provided that

(i) in IP's discretion, to do so does not conflict with the best
interests of other clients and

(ii) it is understood that IP will not be held accountable for the
expression of views within such voting instructions and

(iii) IP are not giving any assurance nor undertaking any obligation to
ensure that such instructions resulted in any votes actually being cast.
Records of voting instructions within the immediate preceding 3 months will
not normally be provided.

Note:The record of votes will reflect the voting instruction of the relevant
Fund Manager. This may not be the same as votes actually cast as IP is
entirely reliant on third parties complying promptly with such
instructions to ensure that such votes are cast correctly. Accordingly,
the provision of information relating to an instruction does not mean that
a vote was actually cast, just that an instruction was given in accordance
with a particular view taken.

APPENDIX I

VOTING ON NON-UK/EUROPEAN SHARES

When deciding whether to exercise the voting rights attached to its clients'
non-UK/European shares, IP will take into consideration a number of factors.
These will include:

- the likely impact of voting on management activity, versus the cost to
the client

- the portfolio management restrictions (e.g. share blocking) that may
result from voting

- the preferences, where expressed, of clients

Generally, IP will vote on non-UK/European shares by exception only, except
where the client or local regulator expressly requires voting on all shares.

SHARE BLOCKING

AIM INVESTMENTS PROXY VOTING GUIDELINES
(Effective as of February 22, 2007)

The following Proxy Voting Guidelines are applicable to all funds managed by
AIM Advisors, Inc. ("AIM")./1/

INTRODUCTION

OUR BELIEF

AIM's Trustees and investment professionals expect a high standard of
corporate governance from the companies in our portfolios so that AIM may
fulfill its fiduciary obligation to our fund shareholders. Well governed
companies are characterized by a primary focus on the interests of
shareholders, accountable boards of directors, ample transparency in financial
disclosure, performance-driven cultures and appropriate consideration of all
stakeholders. AIM believes well governed companies create greater shareholder
wealth over the long term than poorly governed companies, so we endeavor to
vote in a manner that increases the value of our investments and fosters good
governance within our portfolio companies.

In determining how to vote proxy issues, AIM considers the probable business
consequences of each issue and votes in a manner designed to protect and
enhance fund shareholders' interests. Our voting decisions are intended to
enhance each company's total shareholder value over the funds' typical
investment horizon.

Proxy voting is an integral part of AIM's investment process. We believe
that the right to vote proxies should be managed with the same care as all
other elements of the investment process. The objective of AIM's proxy-voting
activity is to promote good governance and advance the economic interests of
our clients. At no time will AIM exercise its voting power to advance its own
commercial interests, to pursue a social or political cause that is unrelated
to our clients' economic interests, or to favor a particular client or business
relationship to the detriment of others.

PROXY ADMINISTRATION

The AIM Proxy Committee consists of seven members representing AIM's Legal,
Compliance and Investments departments. AIM's Proxy Voting Guidelines are
revised annually by the Proxy Committee, and are approved by the AIM Funds
Boards of Trustees. The Proxy Committee implements the Guidelines and oversees
proxy voting.

The Proxy Committee has retained outside experts to assist with the analysis
and voting of proxy issues. In addition to the advice offered by these experts,
AIM uses information gathered from our own research, company managements, AIM's
portfolio managers and outside shareholder groups to reach our voting decisions.

Generally speaking, AIM's investment-research process leads us to invest in
companies led by management teams we believe have the ability to conceive and
execute strategies to outperform their competitors. We select companies for
investment based in large part on our assessment of their management teams'
ability to create shareholder wealth. Therefore, in formulating our
proxy-voting decisions, AIM gives proper consideration to the recommendations
of a company's Board of Directors.

IMPORTANT PRINCIPLES UNDERLYING THE AIM PROXY VOTING GUIDELINES

I. ACCOUNTABILITY

Management teams of companies are accountable to their boards of directors,
and directors of publicly held companies are accountable to their shareholders.
AIM endeavors to vote the proxies of its portfolio companies in a manner that
will reinforce the notion of a board's accountability to its shareholders.
Consequently, AIM votes against any actions that would impair the rights of
shareholders or would reduce shareholders' influence over the board or over
management.

The following are specific voting issues that illustrate how AIM applies
this principle of accountability.

. ELECTIONS OF DIRECTORS. In uncontested director elections for companies
that do not have a controlling shareholder, AIM votes in favor of slates
if they are comprised of at least a majority of independent directors
and if the boards' key committees are fully independent. Key committees
include the Audit, Compensation and Governance or Nominating Committees.
AIM's standard of independence excludes directors who, in addition to
the directorship, have any material business or family relationships
with the companies they serve.

Contested director elections are evaluated on a case-by-case basis and
are decided within the context of AIM's investment thesis on a company.

. DIRECTOR PERFORMANCE. AIM withholds votes from directors who exhibit a
lack of accountability to shareholders, either through their level of
attendance at meetings or by enacting egregious corporate-governance or
other policies. In cases of material financial restatements, accounting
fraud, habitually late filings, adopting shareholder rights plan
("poison pills") without shareholder approval, or other areas of poor
performance, AIM may withhold votes from some or all of a company's
directors. In situations where directors' performance is a concern, AIM
may also support shareholder proposals to take corrective actions such
as so-called "clawback" provisions.

. AUDITORS AND AUDIT COMMITTEE MEMBERS. AIM believes a company's Audit
Committee has a high degree of responsibility to shareholders in matters
of financial disclosure, integrity of the financial statements and
effectiveness of a company's internal controls. Independence, experience
and financial expertise are critical elements of a well-functioning
Audit Committee. When electing directors who are

members of a company's Audit Committee, or when ratifying a company's
auditors, AIM considers the past performance of the Committee and holds
its members accountable for the quality of the company's financial
statements and reports.

. MAJORITY STANDARD IN DIRECTOR ELECTIONS. The right to elect directors is
the single most important mechanism shareholders have to promote
accountability. AIM supports the nascent effort to reform the U.S.
convention of electing directors, and votes in favor of proposals to
elect directors by a majority vote.

. CLASSIFIED BOARDS. AIM supports proposals to elect directors annually
instead of electing them to staggered multi-year terms because annual
elections increase a board's level of accountability to its shareholders.

. SUPERMAJORITY VOTING REQUIREMENTS. Unless proscribed by law in the state
of incorporation, AIM votes against actions that would impose any
supermajority voting requirement, and supports actions to dismantle
existing supermajority requirements.

. RESPONSIVENESS. AIM withholds votes from directors who do not adequately
respond to shareholder proposals that were approved by a majority of
votes cast the prior year.

. CUMULATIVE VOTING. The practice of cumulative voting can enable minority
shareholders to have representation on a company's board. AIM supports
proposals to institute the practice of cumulative voting at companies
whose overall corporate-governance standards indicate a particular need
to protect the interests of minority shareholders.

. SHAREHOLDER ACCESS. On business matters with potential financial
consequences, AIM votes in favor of proposals that would increase
shareholders' opportunities to express their views to boards of
directors, proposals that would lower barriers to shareholder action and
proposals to promote the adoption of generally accepted best practices
in corporate governance.

II. INCENTIVES

AIM believes properly constructed compensation plans that include equity
ownership are effective in creating incentives that induce managements and
employees of our portfolio companies to create greater shareholder wealth. AIM
supports equity compensation plans that promote the proper alignment of
incentives, and votes against plans that are overly dilutive to existing
shareholders, plans that contain objectionable structural features, and plans
that appear likely to reduce the value of the fund's investment.

Following are specific voting issues that illustrate how AIM evaluates
incentive plans.

. EXECUTIVE COMPENSATION. AIM evaluates compensation plans for executives
within the context of the company's performance under the executives'
tenure. AIM believes independent compensation committees are best
positioned to craft executive-compensation plans that are suitable for
their company-specific circumstances. We view the election of those
independent compensation committee members as the appropriate mechanism
for shareholders to express their approval or disapproval of a company's
compensation practices. Therefore, AIM generally does not support
shareholder proposals to limit or eliminate certain forms of executive
compensation. In the interest of reinforcing the notion of a
compensation committee's accountability to shareholders, AIM supports
proposals requesting that companies subject each year's compensation
record to an advisory shareholder vote, or so-called "say on pay"
proposals.

. EQUITY-BASED COMPENSATION PLANS. When voting to approve or reject
equity-based compensation plans, AIM compares the total estimated cost
of the plans, including stock options and restricted stock, against a
carefully selected peer group and uses multiple performance metrics that
help us determine whether the incentive structures in place are creating
genuine shareholder wealth. Regardless of a plan's estimated cost
relative to its peer group, AIM votes against plans that contain
structural features that would impair the alignment of incentives
between shareholders and management. Such features include the ability
to reprice or reload options without shareholder approval, the ability
to issue options

below the stock's current market price, or the ability to automatically
replenish shares without shareholder approval.

. EMPLOYEE STOCK-PURCHASE PLANS. AIM supports employee stock-purchase
plans that are reasonably designed to provide proper incentives to a
broad base of employees, provided that the price at which employees may
acquire stock is at most a 15 percent discount from the market price.

. SEVERANCE AGREEMENTS. AIM generally votes in favor of proposals
requiring advisory shareholder ratification of executives' severance
agreements. However, we oppose proposals requiring such agreements to be
ratified by shareholders in advance of their adoption.

III. CAPITALIZATION

Examples of management proposals related to a company's capital structure
include authorizing or issuing additional equity capital, repurchasing
outstanding stock, or enacting a stock split or reverse stock split. On
requests for additional capital stock, AIM analyzes the company's stated
reasons for the request. Except where the request could adversely affect the
fund's ownership stake or voting rights, AIM generally supports a board's
decisions on its needs for additional capital stock. Some capitalization
proposals require a case-by-case analysis within the context of AIM's
investment thesis on a company. Examples of such proposals include authorizing
common or preferred stock with special voting rights, or issuing additional
stock in connection with an acquisition.

IV. MERGERS, ACQUISITIONS AND OTHER CORPORATE ACTIONS

Issuers occasionally require shareholder approval to engage in certain
corporate actions such as mergers, acquisitions, name changes, dissolutions,
reorganizations, divestitures and reincorporations. AIM analyzes these
proposals within the context of our investment thesis on the company, and
determines its vote on a case-by-case basis.

V. ANTI-TAKEOVER MEASURES

Practices designed to protect a company from unsolicited bids can adversely
affect shareholder value and voting rights, and they create conflicts of
interests among directors, management and shareholders. Except under special
issuer-specific circumstances, AIM votes to reduce or eliminate such measures.
These measures include adopting or renewing "poison pills", requiring
supermajority voting on certain corporate actions, classifying the election of
directors instead of electing each director to an annual term, or creating
separate classes of common or preferred stock with special voting rights. AIM
generally votes against management proposals to impose these types of measures,
and generally votes for shareholder proposals designed to reduce such measures.
AIM supports shareholder proposals directing companies to subject their
anti-takeover provisions to a shareholder vote.

VI. SHAREHOLDER PROPOSALS ON CORPORATE GOVERNANCE

AIM generally votes for shareholder proposals that are designed to protect
shareholder rights if a company's corporate-governance standards indicate that
such additional protections are warranted.

VII. SHAREHOLDER PROPOSALS ON SOCIAL RESPONSIBILITY

The potential costs and economic benefits of shareholder proposals seeking
to amend a company's practices for social reasons are difficult to assess.
Analyzing the costs and economic benefits of these proposals is highly
subjective and does not fit readily within our framework of voting to create
greater shareholder wealth over AIM's typical investment horizon. Therefore,
AIM abstains from voting on shareholder proposals deemed to be of a purely
social, political or moral nature.

VIII. ROUTINE BUSINESS MATTERS

Routine business matters rarely have a potentially material effect on the
economic prospects of fund holdings, so we generally support the board's
discretion on these items. However, AIM votes against proposals

where there is insufficient information to make a decision about the nature of
the proposal. Similarly, AIM votes against proposals to conduct other
unidentified business at shareholder meetings.

SUMMARY

These Guidelines provide an important framework for making proxy-voting
decisions, and should give fund shareholders insight into the factors driving
AIM's decisions. The Guidelines cannot address all potential proxy issues,
however. Decisions on specific issues must be made within the context of these
Guidelines and within the context of the investment thesis of the funds that
own the company's stock. Where a different investment thesis is held by
portfolio managers who may hold stocks in common, AIM may vote the shares held
on a fund-by-fund basis.

EXCEPTIONS

In certain circumstances, AIM may refrain from voting where the economic
cost of voting a company's proxy exceeds any anticipated benefits of that proxy
proposal.

SHARE-LENDING PROGRAMS

One reason that some portion of AIM's position in a particular security
might not be voted is the securities lending program. When securities are out
on loan and earning fees for the lending fund, they are transferred into the
borrower's name. Any proxies during the period of the loan are voted by the
borrower. The lending fund would have to terminate the loan to vote the
company's proxy, an action that is not generally in the best economic interest
of fund shareholders. However, whenever AIM determines that the benefit to
shareholders of voting a particular proxy outweighs the revenue lost by
terminating the loan, we recall the securities for the purpose of voting the
fund's full position.

"SHARE-BLOCKING"

Another example of a situation where AIM may be unable to vote is in
countries where the exercise of voting rights requires the fund to submit to
short-term trading restrictions, a practice known as "share-blocking." AIM
generally refrains from voting proxies in share-blocking countries unless the
portfolio manager determines that the benefit to fund shareholders of voting a
specific proxy outweighs the fund's temporary inability to sell the security.

INTERNATIONAL CONSTRAINTS

An additional concern that sometimes precludes our voting non-U.S. proxies
is our inability to receive proxy materials with enough time and enough
information to make a voting decision. In the great majority of instances,
however, we are able to vote non-U.S. proxies successfully. It is important to
note that AIM makes voting decisions for non-U.S. issuers using these Proxy
Voting Guidelines as our framework, but also takes into account the
corporate-governance standards, regulatory environment and generally accepted
best practices of the local market.

EXCEPTIONS TO THESE GUIDELINES

AIM retains the flexibility to accommodate company-specific situations where
strictly adhering to the Guidelines would lead to a vote that the AIM Proxy
Committee deems not to be in the best interest of the funds' shareholders. In
these situations, the Proxy Committee will vote the proxy in the manner deemed
to be in the best interest of the funds' shareholders, and will promptly inform
the funds' Boards of Trustees of such vote and the circumstances surrounding it.

RESOLVING POTENTIAL CONFLICTS OF INTEREST

A potential conflict of interest arises when AIM votes a proxy for an issuer
with which it also maintains a material business relationship. Examples could
include issuers that are distributors of AIM's products, or issuers that employ
AIM to manage portions of their retirement plans or treasury accounts. AIM
reviews each proxy

proposal to assess the extent, if any, to which there may be a material
conflict between the interests of the fund shareholders and AIM.

AIM takes reasonable measures to determine whether a potential conflict may
exist. A potential conflict is deemed to exist only if one or more of the Proxy
Committee members actually knew or should have known of the potential conflict.

If a material potential conflict is deemed to exist, AIM may resolve the
potential conflict in one of the following ways: (1) if the proposal that gives
rise to the potential conflict is specifically addressed by AIM's Proxy Voting
Guidelines, AIM may vote the proxy in accordance with the predetermined
Guidelines; (2) AIM may engage an independent third party to determine how the
proxy should be voted; or (3) AIM may establish an ethical wall or other
informational barrier between the persons involved in the potential conflict
and the persons making the proxy-voting decision in order to insulate the
potential conflict from the decision makers.

Because the Guidelines are pre-determined and crafted to be in the best
economic interest of shareholders, applying the Guidelines to vote client
proxies should, in most instances, adequately resolve any potential conflict of
interest. As an additional safeguard against potential conflicts, persons from
AIM's marketing, distribution and other customer-facing functions are precluded
from becoming members of the AIM Proxy Committee.

On a quarterly basis, the AIM Funds Boards of Trustees review a report from
AIM's Internal Compliance Controls Committee. The report contains a list of all
known material business relationships that AIM maintains with publicly traded
issuers. That list is cross-referenced with the list of proxies voted over the
period. If there are any instances where AIM's voting pattern on the proxies of
its material business partners is inconsistent with its voting pattern on all
other issuers, they are brought before the Trustees and explained by the
Chairman of the AIM Proxy Committee.

PERSONAL CONFLICTS OF INTEREST. If any member of the AIM Proxy Committee has
a personal conflict of interest with respect to a company or an issue presented
for voting, that Committee member will inform the Committee of such conflict
and will abstain from voting on that company or issue.

FUNDS OF FUNDS. Some AIM funds offering diversified asset allocation within
one investment vehicle own shares in other AIM funds. A potential conflict of
interest could arise if an underlying AIM fund has a shareholder meeting with
any proxy issues to be voted on, because AIM's asset-allocation funds or
target-maturity funds may be large shareholders of the underlying fund. In
order to avoid any potential for a conflict, the asset-allocation funds and
target maturity funds vote their shares in the same proportion as the votes of
the external shareholders of the underlying fund.

POLICIES AND VOTE DISCLOSURE

A copy of these Proxy Voting Guidelines and the voting record of each AIM
fund are available on our web site, WWW.AIMINVESTMENTS.COM. In accordance with
Securities and Exchange Commission regulations, all funds file a record of all
proxy-voting activity for the prior 12 months ending June 30th. That filing is
made on or before August 31st of each year.

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FOOTNOTES

1. AIM funds not managed by A I M Advisors, Inc., are governed by the proxy
voting policies of their respective advisers.

To see the Proxy Voting Guidelines applicable to the AIM TRIMARK ENDEAVOR FUND,
the AIM TRIMARK FUND or the AIM TRIMARK SMALL COMPANIES FUND, click HERE
(hyperlink to AIM Funds Management Inc.'s proxy policy).

To see the Proxy Voting Guidelines applicable to the AIM INTERNATIONAL TOTAL
RETURN FUND, click HERE (hyperlink to INVESCO Asset Management Limited's proxy
policy).

To see the Proxy Voting Guidelines applicable to the AIM JAPAN FUND, click HERE
(hyperlink to INVESCO Asset Management (Japan) Limited's proxy policy).

To see the Proxy Voting Guidelines applicable to the AIM CHINA FUND, click HERE
(hyperlink to INVESCO Hong Kong Limited's proxy policy).

To see the Proxy Voting Guidelines applicable to the AIM LIBOR ALPHA FUND, the
AIM FLOATING RATE FUND, the AIM GLOBAL REAL ESTATE FUND, the AIM INTERNATIONAL
CORE EQUITY FUND, the AIM REAL ESTATE FUND, the AIM S&P 500 INDEX FUND, the AIM
SELECT REAL ESTATE INCOME FUND, the AIM STRUCTURED CORE FUND, the AIM
STRUCTURED GROWTH FUND, the AIM STRUCTURED VALUE FUND, the AIM V.I. GLOBAL REAL
ESTATE FUND, or the AIM V.I. INTERNATIONAL CORE EQUITY FUND, click HERE
(hyperlink to INVESCO Institutional (N.A.), Inc.'s proxy policy).

PROXY POLICIES AND PROCEDURES
(AS AMENDED OCTOBER 1, 2005)

A. PROXY POLICIES

Each of A I M Advisors, Inc., A I M Capital Management, Inc. and AIM Private
Asset Management, Inc. (each an "AIM Advisor" and collectively "AIM") has the
fiduciary obligation to, at all times, make the economic best interest of
advisory clients the sole consideration when voting proxies of companies held
in client accounts. As a general rule, each AIM Advisor shall vote against any
actions that would reduce the rights or options of shareholders, reduce
shareholder influence over the board of directors and management, reduce the
alignment of interests between management and shareholders, or reduce the value
of shareholders' investments. At the same time, AIM believes in supporting the
management of companies in which it invests, and will accord proper weight to
the positions of a company's board of directors, and the AIM portfolio managers
who chose to invest in the companies. Therefore, on most issues, our votes have
been cast in accordance with the recommendations of the company's board of
directors, and we do not currently expect that trend to change. Although AIM's
proxy voting policies are stated below, AIM's proxy committee considers all
relevant facts and circumstances, and retains the right to vote proxies as
deemed appropriate.

I. BOARDS OF DIRECTORS

A board that has at least a majority of independent directors is integral to
good corporate governance. Key board committees, including audit, compensation
and nominating committees, should be completely independent.

There are some actions by directors that should result in votes being
withheld. These instances include directors who:

. Are not independent directors and (a) sit on the board's audit,
compensation or nominating committee, or (b) sit on a board where the
majority of the board is not independent;

. Attend less than 75 percent of the board and committee meetings without
a valid excuse;

. It is not clear that the director will be able to fulfill his function;

. Implement or renew a dead-hand or modified dead-hand poison pill;

. Enacted egregious corporate governance or other policies or failed to
replace management as appropriate;

. Have failed to act on takeover offers where the majority of the
shareholders have tendered their shares; or

. Ignore a shareholder proposal that is approved by a majority of the
shares outstanding.

Votes in a contested election of directors must be evaluated on a
case-by-case basis, considering the following factors:

. Long-term financial performance of the target company relative to its
industry;

. Management's track record;

. Portfolio manager's assessment;

. Qualifications of director nominees (both slates);

. Evaluation of what each side is offering shareholders as well as the
likelihood that the proposed objectives and goals can be met; and

. Background to the proxy contest.

EXHIBIT A

II. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

A company should limit its relationship with its auditors to the audit
engagement, and certain closely related activities that do not, in the
aggregate, raise an appearance of impaired independence. We will support the
reappointment of the company's auditors unless:

. It is not clear that the auditors will be able to fulfill their function;

. There is reason to believe the independent auditors have rendered an
opinion that is neither accurate nor indicative of the company's
financial position; or

. The auditors have a significant professional or personal relationship
with the issuer that compromises the auditors' independence.

III. COMPENSATION PROGRAMS

Appropriately designed equity-based compensation plans, approved by
shareholders, can be an effective way to align the interests of long-term
shareholders and the interests of management, employees and directors. Plans
should not substantially dilute shareholders' ownership interests in the
company, provide participants with excessive awards or have objectionable
structural features. We will consider all incentives, awards and compensation,
and compare them to a company-specific adjusted allowable dilution cap and a
weighted average estimate of shareholder wealth transfer and voting power
dilution.

. We will generally vote against equity-based plans where the total
dilution (including all equity-based plans) is excessive.

. We will support the use of employee stock purchase plans to increase
company stock ownership by employees, provided that shares purchased
under the plan are acquired for no less than 85% of their market value.

. We will vote against plans that have any of the following structural
features: ability to re-price underwater options without shareholder
approval, ability to issue options with an exercise price below the
stock's current market price, ability to issue reload options, or
automatic share replenishment ("evergreen") feature.

. We will vote for proposals to reprice options if there is a
value-for-value (rather than a share-for-share) exchange.

. We will generally support the board's discretion to determine and grant
appropriate cash compensation and severance packages.

IV. CORPORATE MATTERS

We will review management proposals relating to changes to capital
structure, reincorporation, restructuring and mergers and acquisitions on a
case by case basis, considering the impact of the changes on corporate
governance and shareholder rights, anticipated financial and operating
benefits, portfolio manager views, level of dilution, and a company's industry
and performance in terms of shareholder returns.

. We will vote for merger and acquisition proposals that the proxy
committee and relevant portfolio managers believe, based on their review
of the materials, will result in financial and operating benefits, have
a fair offer price, have favorable prospects for the combined companies,
and will not have a negative impact on corporate governance or
shareholder rights.

. We will vote against proposals to increase the number of authorized
shares of any class of stock that has superior voting rights to another
class of stock.

EXHIBIT A

. We will vote for proposals to increase common share authorization for a
stock split, provided that the increase in authorized shares would not
result in excessive dilution given a company's industry and performance
in terms of shareholder returns.

. We will vote for proposals to institute open-market share repurchase
plans in which all shareholders participate on an equal basis.

V. SHAREHOLDER PROPOSALS

Shareholder proposals can be extremely complex, and the impact on share
value can rarely be anticipated with any high degree of confidence. The proxy
committee reviews shareholder proposals on a case-by-case basis, giving careful
consideration to such factors as: the proposal's impact on the company's
short-term and long-term share value, its effect on the company's reputation,
the economic effect of the proposal, industry and regional norms applicable to
the company, the company's overall corporate governance provisions, and the
reasonableness of the request.

. We will generally abstain from shareholder social and environmental
proposals.

. We will generally support the board's discretion regarding shareholder
proposals that involve ordinary business practices.

. We will generally vote for shareholder proposals that are designed to
protect shareholder rights if the company's corporate governance
standards indicate that such additional protections are warranted.

. We will generally vote for proposals to lower barriers to shareholder
action.

. We will generally vote for proposals to subject shareholder rights plans
to a shareholder vote. In evaluating these plans, we give favorable
consideration to the presence of "TIDE" provisions (short-term sunset
provisions, qualified bid/permitted offer provisions, and/or mandatory
review by a committee of independent directors at least every three
years).

VI. OTHER

. We will vote against any proposal where the proxy materials lack
sufficient information upon which to base an informed decision.

. We will vote against any proposals to authorize the proxy to conduct any
other business that is not described in the proxy statement.

. We will vote any matters not specifically covered by these proxy
policies and procedures in the economic best interest of advisory
clients.

AIM's proxy policies, and the procedures noted below, may be amended from
time to time.

B. PROXY COMMITTEE PROCEDURES

The proxy committee currently consists of representatives from the Legal and
Compliance Department, the Investments Department and the Finance Department.

The committee members review detailed reports analyzing the proxy issues and
have access to proxy statements and annual reports. Committee members may also
speak to management of a company regarding proxy issues and should share
relevant considerations with the proxy committee. The committee then discusses
the issues and determines the vote. The committee shall give appropriate and
significant weight to portfolio managers' views regarding a proposal's impact
on shareholders. A proxy committee meeting requires a quorum of three committee
members, voting in person or by e-mail.

EXHIBIT A

AIM's proxy committee shall consider its fiduciary responsibility to all
clients when addressing proxy issues and vote accordingly. The proxy committee
may enlist the services of reputable outside professionals and/or proxy
evaluation services, such as Institutional Shareholder Services or any of its
subsidiaries ("ISS"), to assist with the analysis of voting issues and/or to
carry out the actual voting process. To the extent the services of ISS or
another provider are used, the proxy committee shall periodically review the
policies of that provider. The proxy committee shall prepare a report for the
Funds' Board of Trustees on a periodic basis regarding issues where AIM's votes
do not follow the recommendation of ISS or another provider because AIM's proxy
policies differ from those of such provider.

In addition to the foregoing, the following shall be strictly adhered to
unless contrary action receives the prior approval of the Funds' Board of
Trustees:

1. Other than by voting proxies and participating in Creditors' committees,
AIM shall not engage in conduct that involves an attempt to change or
influence the control of a company.

2. AIM will not publicly announce its voting intentions and the reasons
therefore.

3. AIM shall not participate in a proxy solicitation or otherwise seek
proxy-voting authority from any other public company shareholder.

4. All communications regarding proxy issues between the proxy committee
and companies or their agents, or with fellow shareholders shall be for
the sole purpose of expressing and discussing AIM's concerns for its
advisory clients' interests and not for an attempt to influence or
control management.

C. BUSINESS/DISASTER RECOVERY

If the proxy committee is unable to meet due to a temporary business
interruption, such as a power outage, a sub-committee of the proxy committee,
even if such subcommittee does not constitute a quorum of the proxy committee,
may vote proxies in accordance with the policies stated herein. If the
sub-committee of the proxy committee is not able to vote proxies, the
sub-committee shall authorize ISS to vote proxies by default in accordance with
ISS' proxy policies and procedures, which may vary slightly from AIM's.

D. RESTRICTIONS AFFECTING VOTING

If a country's laws allow a company in that country to block the sale of the
company's shares by a shareholder in advance of a shareholder meeting, AIM will
not vote in shareholder meetings held in that country, unless the company
represents that it will not block the sale of its shares in connection with the
meeting. Administrative or other procedures, such as securities lending, may
also cause AIM to refrain from voting. Although AIM considers proxy voting to
be an important shareholder right, the proxy committee will not impede a
portfolio manager's ability to trade in a stock in order to vote at a
shareholder meeting.

E. CONFLICTS OF INTEREST

The proxy committee reviews each proxy to assess the extent to which there
may be a material conflict between AIM's interests and those of advisory
clients. A potential conflict of interest situation may include where AIM or an
affiliate manages assets for, administers an employee benefit plan for,
provides other financial products or services to, or otherwise has a material
business relationship with, a company whose management is soliciting proxies,
and failure to vote proxies in favor of management of the company may harm
AIM's relationship with the company. In order to avoid even the appearance of
impropriety, the proxy committee will not take AIM's relationship with the
company into account, and will vote the company's proxies in the best interest
of the advisory clients, in accordance with these proxy policies and procedures.

EXHIBIT A

If AIM's proxy policies and voting record do not guide the proxy committee's
vote in a situation where a conflict of interest exists, the proxy committee
will vote the proxy in the best interest of the advisory clients, and will
provide information regarding the issue to the Funds' Board of Trustees in the
next quarterly report.

If a committee member has any conflict of interest with respect to a company
or an issue presented, that committee member should inform the proxy committee
of such conflict and abstain from voting on that company or issue.

F. FUND OF FUNDS

When an AIM Fund (an "Investing Fund") that invests in another AIM Fund(s)
(an "Underlying Fund") has the right to vote on the proxy of the Underlying
Fund, the Investing Fund will echo the votes of the other shareholders of the
Underlying AIM Fund.

G. CONFLICT IN THESE POLICIES

If following any of the policies listed herein would lead to a vote that the
proxy committee deems to be not in the best interest of AIM's advisory clients,
the proxy committee will vote the proxy in the manner that they deem to be the
best interest of AIM's advisory clients and will inform the Funds' Board of
Trustees of such vote and the circumstances surrounding it promptly thereafter.

PROXY VOTING POLICIES AND PROCEDURES

FOR BLACKROCK ADVISORS, LLC
AND ITS AFFILIATED SEC REGISTERED INVESTMENT ADVISERS

SEPTEMBER 30, 2006

TABLE OF CONTENTS

PAGE
----

Introduction....................... 1

Scope of Committee Responsibilities 2

Special Circumstances.............. 3

Voting Guidelines.................. 4

Boards of Directors............. 5

Auditors........................ 6

Compensation and Benefits....... 7

Capital Structure............... 7

Corporate Charter and By-Laws... 8

Corporate Meetings.............. 8

Investment Companies............ 8

Environmental and Social Issues. 9

Notice to Clients.................. 10

PROXY VOTING POLICIES AND PROCEDURES

These Proxy Voting Policies and Procedures ("Policy") for BlackRock
Advisors, LLC and its affiliated U.S. registered investment advisers/1/
("BlackRock") reflect our duty as a fiduciary under the Investment Advisers Act
of 1940 (the "Advisers Act") to vote proxies in the best interests of our
clients. BlackRock serves as the investment manager for investment companies,
other commingled investment vehicles and/or separate accounts of institutional
and other clients. The right to vote proxies for securities held in such
accounts belongs to BlackRock's clients. Certain clients of BlackRock have
retained the right to vote such proxies in general or in specific
circumstances./2/ Other clients, however, have delegated to BlackRock the right
to vote proxies for securities held in their accounts as part of BlackRock's
authority to manage, acquire and dispose of account assets.

When BlackRock votes proxies for a client that has delegated to BlackRock
proxy voting authority, BlackRock acts as the client's agent. Under the
Advisers Act, an investment adviser is a fiduciary that owes each of its
clients a duty of care and loyalty with respect to all services the adviser
undertakes on the client's behalf, including proxy voting. BlackRock is
therefore subject to a fiduciary duty to vote proxies in a manner BlackRock
believes is consistent with the client's best interests,/3/ whether or not the
client's proxy voting is subject to the fiduciary standards of the Employee
Retirement Income Security Act of 1974 ("ERISA")./4/ When voting proxies for
client accounts (including investment companies), BlackRock's primary objective
is to make voting decisions solely in the best interests of clients and ERISA
clients' plan beneficiaries and participants. In fulfilling its obligations to
clients, BlackRock will seek to act in a manner that it believes is most likely
to enhance the economic value of the underlying securities held in client
accounts./5/ It is imperative that BlackRock considers the interests of its
clients, and not the interests of BlackRock, when voting proxies and that real
(or perceived) material conflicts that may arise between BlackRock's interest
and those of BlackRock's clients are properly addressed and resolved.

Advisers Act Rule 206(4)-6 was adopted by the SEC in 2003 and requires,
among other things, that an investment adviser that exercises voting authority
over clients' proxy voting adopt policies and procedures reasonably designed to
ensure that the adviser votes proxies in the best interests of clients,
discloses to its clients information about those policies and procedures and
also discloses to clients how they may obtain information on how the adviser
has voted their proxies.

In light of such fiduciary duties, the requirements of Rule 206(4)-6, and
given the complexity of the issues that may be raised in connection with proxy
votes, BlackRock has adopted these policies and procedures.

- - --------
/1/ The Policy does not apply to BlackRock Asset Management U.K. Limited and
BlackRock Investment Managers International Limited, which are U.S.
registered investment advisers based in the United Kingdom.
/2/ In certain situations, a client may direct BlackRock to vote in accordance
with the client's proxy voting policies. In these situations, BlackRock
will seek to comply with such policies to the extent it would not be
inconsistent with other BlackRock legal responsibilities.
/3/ Letter from Harvey L. Pitt, Chairman, SEC, to John P.M. Higgins,
President, Ram Trust Services (February 12, 2002) (Section 206 of the
Investment Advisers Act imposes a fiduciary responsibility to vote proxies
fairly and in the best interests of clients); SEC Release No. IA-2106
(February 3, 2003).
/4/ DOL Interpretative Bulletin of Sections 402, 403 and 404 of ERISA at 29
C.F.R. 2509.94-2
/5/ Other considerations, such as social, labor, environmental or other
policies, may be of interest to particular clients. While BlackRock is
cognizant of the importance of such considerations, when voting proxies it
will generally take such matters into account only to the extent that they
have a direct bearing on the economic value of the underlying securities.
To the extent that a BlackRock client desires to pursue a particular
social, labor, environmental or other agenda through the proxy votes made
for its securities held through BlackRock as investment adviser, BlackRock
encourages the client to consider retaining direct proxy voting authority
or to appoint independently a special proxy voting fiduciary other than
BlackRock.

BlackRock's Equity Investment Policy Oversight Committee, or a sub-committee
thereof (the "Committee"), addresses proxy voting issues on behalf of BlackRock
and its clients./6 /The Committee is comprised of senior members of BlackRock's
Portfolio Management Group and advised by BlackRock's Legal and Compliance
Department.

I. SCOPE OF COMMITTEE RESPONSIBILITIES

The Committee shall have the responsibility for determining how to address
proxy votes made on behalf of all BlackRock clients, except for clients who
have retained the right to vote their own proxies, either generally or on any
specific matter. In so doing, the Committee shall seek to ensure that proxy
votes are made in the best interests of clients, and that proxy votes are
determined in a manner free from unwarranted or inappropriate influences. The
Committee shall also oversee the overall administration of proxy voting for
BlackRock accounts./7/

The Committee shall establish BlackRock's proxy voting guidelines, with such
advice, participation and research as the Committee deems appropriate from
portfolio managers, proxy voting services or other knowledgeable interested
parties. As it is anticipated that there will not necessarily be a "right" way
to vote proxies on any given issue applicable to all facts and circumstances,
the Committee shall also be responsible for determining how the proxy voting
guidelines will be applied to specific proxy votes, in light of each issuer's
unique structure, management, strategic options and, in certain circumstances,
probable economic and other anticipated consequences of alternative actions. In
so doing, the Committee may determine to vote a particular proxy in a manner
contrary to its generally stated guidelines.

The Committee may determine that the subject matter of certain proxy issues
are not suitable for general voting guidelines and requires a case-by-case
determination, in which case the Committee may elect not to adopt a specific
voting guideline applicable to such issues. BlackRock believes that certain
proxy voting issues--such as approval of mergers and other significant
corporate transactions - require investment analysis akin to investment
decisions, and are therefore not suitable for general guidelines. The Committee
may elect to adopt a common BlackRock position on certain proxy votes that are
akin to investment decisions, or determine to permit portfolio managers to make
individual decisions on how best to maximize economic value for the accounts
for which they are responsible (similar to normal buy/sell investment decisions
made by such portfolio managers)./8/

While it is expected that BlackRock, as a fiduciary, will generally seek to
vote proxies over which BlackRock exercises voting authority in a uniform
manner for all BlackRock clients, the Committee, in conjunction with the
portfolio manager of an account, may determine that the specific circumstances
of such account require that such account's proxies be voted differently due to
such account's investment objective or other factors that differentiate it from
other accounts. In addition, on proxy votes that are akin to investment
decisions, BlackRock believes portfolio managers may from time to time
legitimately reach differing but equally valid views, as fiduciaries for
BlackRock's clients, on how best to maximize economic value in respect of a
particular investment.

- - --------
/6/ Subject to the Proxy Voting Policies of Merrill Lynch Bank & Trust Company
FSB, the Committee may also function jointly as the Proxy Voting Committee
for Merrill Lynch Bank & Trust Company FSB trust accounts managed by
personnel dually-employed by BlackRock.
/7/ The Committee may delegate day-to-day administrative responsibilities to
other BlackRock personnel and/or outside service providers, as appropriate.
/8/ The Committee will normally defer to portfolio managers on proxy votes
that are akin to investment decisions EXCEPT FOR proxy votes that involve
a material conflict of interest, in which case it will determine, in its
discretion, the appropriate voting process so as to address such
conflict./ /

The Committee will also be responsible for ensuring the maintenance of
records of each proxy vote, as required by Advisers Act Rule 204-2./9/ All
records will be maintained in accordance with applicable law. Except as may be
required by applicable legal requirements, or as otherwise set forth herein,
the Committee's determinations and records shall be treated as proprietary,
nonpublic and confidential.

The Committee shall be assisted by other BlackRock personnel, as may be
appropriate. In particular, the Committee has delegated to the BlackRock
Operations Department responsibility for monitoring corporate actions and
ensuring that proxy votes are submitted in a timely fashion. The Operations
Department shall ensure that proxy voting issues are promptly brought to the
Committee's attention and that the Committee's proxy voting decisions are
appropriately disseminated and implemented.

To assist BlackRock in voting proxies, the Committee may retain the services
of a firm providing such services. BlackRock has currently retained
Institutional Shareholder Services ("ISS") in that role. ISS is an independent
adviser that specializes in providing a variety of fiduciary-level
proxy-related services to institutional investment managers, plan sponsors,
custodians, consultants, and other institutional investors. The services
provided to BlackRock may include, but are not limited to, in-depth research,
voting recommendations (which the Committee is not obligated to follow), vote
execution, and recordkeeping.

II. SPECIAL CIRCUMSTANCES

ROUTINE CONSENTS. BlackRock may be asked from time to time to consent to an
amendment to, or grant a waiver under, a loan agreement, partnership agreement,
indenture or other governing document of a specific financial instrument held
by BlackRock clients. BlackRock will generally treat such requests for consents
not as "proxies" subject to these Proxy Voting Policies and Procedures but as
investment matters to be dealt with by the responsible BlackRock investment
professionals would, provided that such consents (i) do not relate to the
election of a board of directors or appointment of auditors of a public
company, and (ii) either (A) would not otherwise materially affect the
structure, management or control of a public company, or (B) relate to a
company in which BlackRock clients hold only interests in bank loans or debt
securities and are consistent with customary standards and practices for such
instruments.

SECURITIES ON LOAN. Registered investment companies that are advised by
BlackRock as well as certain of our advisory clients may participate in
securities lending programs. Under most securities lending arrangements,
securities on loan may not be voted by the lender (unless the loan is
recalled). BlackRock believes that each client has the right to determine
whether participating in a securities lending program enhances returns, to
contract with the securities lending agent of its choice and to structure a
securities lending program, through its lending agent, that balances any
tension between loaning and voting securities in a matter that satisfies such
client. If client has decided to participate in a securities lending program,
BlackRock will therefore defer to the client's determination and not attempt to
seek recalls solely for the purpose of voting routine proxies as this could
impact the returns received from securities lending and make the client a less
desirable lender in a marketplace. Where a client retains a lending agent that
is unaffiliated with BlackRock, BlackRock will generally not seek to vote
proxies relating to securities on loan because BlackRock does not have a
contractual right to recall such loaned securities for the purpose of voting
proxies. Where BlackRock or an affiliate acts as the lending agent, BlackRock
will also generally not seek to recall loaned securities for proxy voting
purposes, unless the portfolio manager responsible for the account or the
Committee determines that voting the proxy is in the client's best interest and
requests that the security be recalled.

VOTING PROXIES FOR NON-US COMPANIES. While the proxy voting process is well
established in the United States, voting proxies of non-US companies frequently
involves logistical issues which can affect BlackRock's

- - --------
/9/ The Committee may delegate the actual maintenance of such records to an
outside service provider. Currently, the Committee has delegated the
maintenance of such records to Institutional Shareholder Services.

ability to vote such proxies, as well as the desirability of voting such
proxies. These issues include (but are not limited to): (i) untimely notice of
shareholder meetings, (ii) restrictions on a foreigner's ability to exercise
votes, (iii) requirements to vote proxies in person, (iv) "shareblocking"
(requirements that investors who exercise their voting rights surrender the
right to dispose of their holdings for some specified period in proximity to
the shareholder meeting), (v) potential difficulties in translating the proxy,
and (vi) requirements to provide local agents with unrestricted powers of
attorney to facilitate voting instructions.

As a consequence, BlackRock votes proxies of non-US companies only on a
"best-efforts" basis. In addition, the Committee may determine that it is
generally in the best interests of BlackRock clients NOT to vote proxies of
companies in certain countries if the Committee determines that the costs
(including but not limited to opportunity costs associated with shareblocking
constraints) associated with exercising a vote generally are expected to
outweigh the benefit the client will derive by voting on the issuer's proposal.
If the Committee so determines in the case of a particular country, the
Committee (upon advice from BlackRock portfolio managers) may override such
determination with respect to a particular issuer's shareholder meeting if the
Committee believes the benefits of seeking to exercise a vote at such meeting
outweighs the costs, in which case BlackRock will seek to vote on a
best-efforts basis.

SECURITIES SOLD AFTER RECORD DATE. With respect to votes in connection with
securities held on a particular record date but sold from a client account
prior to the holding of the related meeting, BlackRock may take no action on
proposals to be voted on in such meeting.

CONFLICTS OF INTEREST. From time to time, BlackRock may be required to vote
proxies in respect of an issuer that is an affiliate of BlackRock (a "BlackRock
Affiliate"), or a money management or other client of BlackRock (a "BlackRock
Client")./10 /In such event, provided that the Committee is aware of the real
or potential conflict, the following procedures apply:

. The Committee intends to adhere to the voting guidelines set forth
herein for all proxy issues including matters involving BlackRock
Affiliates and BlackRock Clients. The Committee may, in its discretion
for the purposes of ensuring that an independent determination is
reached, retain an independent fiduciary to advise the Committee on how
to vote or to cast votes on behalf of BlackRock's clients; and

. if the Committee determines not to retain an independent fiduciary, or
does not desire to follow the advice of such independent fiduciary, the
Committee shall determine how to vote the proxy after consulting with
the BlackRock Legal and Compliance Department and concluding that the
vote cast is in the client's best interest notwithstanding the conflict.

III. VOTING GUIDELINES

The Committee has determined that it is appropriate and in the best
interests of BlackRock's clients to adopt the following voting guidelines,
which represent the Committee's usual voting position on certain recurring
proxy issues that are not expected to involve unusual circumstances. With
respect to any particular proxy issue, however, the Committee may elect to vote
differently than a voting guideline if the Committee determines that doing so
is, in the Committee's judgment, in the best interest of its clients. The
guidelines may be reviewed at any time upon the request of any Committee member
and may be amended or deleted upon the vote of a majority of voting Committee
members present at a Committee meeting for which there is a quorum.

- - --------
/10/ Such issuers may include investment companies for which BlackRock provides
investment advisory, administrative and/or other services.

A. BOARDS OF DIRECTORS

These proposals concern those issues submitted to shareholders relating to
the composition of the Board of Directors of companies other than investment
companies. As a general matter, the Committee believes that a company's Board
of Directors (rather than shareholders) is most likely to have access to
important, nonpublic information regarding a company's business and prospects,
and is therefore best-positioned to set corporate policy and oversee
management. The Committee therefore believes that the foundation of good
corporate governance is the election of qualified, independent corporate
directors who are likely to diligently represent the interests of shareholders
and oversee management of the corporation in a manner that will seek to
maximize shareholder value over time. In individual cases, the Committee may
look at a Director nominee's history of representing shareholder interests as a
director of other companies, or other factors to the extent the Committee deems
relevant.

The Committee's general policy is to vote:

# VOTE AND DESCRIPTION
- - --- --------------------

A.1 FOR nominees for director of United States companies in uncontested elections, EXCEPT FOR nominees
who

. have missed at least two meetings and, as a result, attended less than 75% of meetings of the
Board of Directors and its committees the previous year, unless the nominee missed the
meeting(s) due to illness or company business

. voted to implement or renew a "dead-hand" poison pill

. ignored a shareholder proposal that was approved by either a majority of the shares outstanding
in any year or by the majority of votes cast for two consecutive years

. failed to act on takeover offers where the majority of the shareholders have tendered their shares

. are corporate insiders who serve on the audit, compensation or nominating committees or on a
full Board that does not have such committees composed exclusively of independent directors

. on a case-by-case basis, have served as directors of other companies with allegedly poor
corporate governance

. sit on more than six boards of public companies

A.2 FOR nominees for directors of non-U.S. companies in uncontested elections, EXCEPT FOR nominees from
whom the Committee determines to withhold votes due to the nominees' poor records of representing
shareholder interests, on a case-by-case basis

A.3 FOR proposals to declassify Boards of Directors, except where there exists a legitimate purpose for
classifying boards

A.4 AGAINST proposals to classify Boards of Directors, except where there exists a legitimate purpose for
classifying boards

A.5 AGAINST proposals supporting cumulative voting

A.6 FOR proposals eliminating cumulative voting

A.7 FOR proposals supporting confidential voting

A.8 FOR proposals seeking election of supervisory board members

A.9 AGAINST shareholder proposals seeking additional representation of women and/or minorities
generally (i.e., not specific individuals) to a Board of Directors

# VOTE AND DESCRIPTION
- - ---- --------------------

A.10 AGAINST shareholder proposals for term limits for directors

A.11 FOR shareholder proposals to establish a mandatory retirement age for directors who attain the age of
72 or older

A.12 AGAINST shareholder proposals requiring directors to own a minimum amount of company stock

A.13 FOR proposals requiring a majority of independent directors on a Board of Directors

A.14 FOR proposals to allow a Board of Directors to delegate powers to a committee or committees

A.15 FOR proposals to require audit, compensation and/or nominating committees of a Board of Directors to
consist exclusively of independent directors

A.16 AGAINST shareholder proposals seeking to prohibit a single person from occupying the roles of
chairman and chief executive officer

A.17 FOR proposals to elect account inspectors

A.18 FOR proposals to fix the membership of a Board of Directors at a specified size

A.19 FOR proposals permitting shareholder ability to nominate directors directly

A.20 AGAINST proposals to eliminate shareholder ability to nominate directors directly

A.21 FOR proposals permitting shareholder ability to remove directors directly

A.22 AGAINST proposals to eliminate shareholder ability to remove directors directly

B. AUDITORS

These proposals concern those issues submitted to shareholders related to
the selection of auditors. As a general matter, the Committee believes that
corporate auditors have a responsibility to represent the interests of
shareholders and provide an independent view on the propriety of financial
reporting decisions of corporate management. While the Committee will generally
defer to a corporation's choice of auditor, in individual cases, the Committee
may look at an auditors' history of representing shareholder interests as
auditor of other companies, to the extent the Committee deems relevant.

The Committee's general policy is to vote:

B.1 FOR approval of independent auditors, EXCEPT FOR

. auditors that have a financial interest in, or material association with, the company they are
auditing, and are therefore believed by the Committee not to be independent

. auditors who have rendered an opinion to any company which in the Committee's opinion is either
not consistent with best accounting practices or not indicative of the company's financial situation

. on a case-by-case basis, auditors who in the Committee's opinion provide a significant amount of
non-audit services to the company

B.2 FOR proposals seeking authorization to fix the remuneration of auditors

B.3 FOR approving internal statutory auditors

B.4 FOR proposals for audit firm rotation, EXCEPT FOR proposals that would require rotation after a period of
less than 5 years

C. COMPENSATION AND BENEFITS

These proposals concern those issues submitted to shareholders related to
management compensation and employee benefits. As a general matter, the
Committee favors disclosure of a company's compensation and benefit policies
and opposes excessive compensation, but believes that compensation matters are
normally best determined by a corporation's board of directors, rather than
shareholders. Proposals to "micro-manage" a company's compensation practices or
to set arbitrary restrictions on compensation or benefits will therefore
generally not be supported.

The Committee's general policy is to vote:

C.1 IN ACCORDANCE WITH THE RECOMMENDATION OF ISS on compensation plans if the ISS
recommendation is based SOLELY on whether or not the company's plan satisfies the allowable cap as
calculated by ISS. If the recommendation of ISS is based on factors other than whether the plan
satisfies the allowable cap the Committee will analyze the particular proposed plan. This policy applies
to amendments of plans as well as to initial approvals.

C.2 FOR proposals to eliminate retirement benefits for outside directors

C.3 AGAINST proposals to establish retirement benefits for outside directors

C.4 FOR proposals approving the remuneration of directors or of supervisory board members

C.5 AGAINST proposals to reprice stock options

C.6 FOR proposals to approve employee stock purchase plans that apply to all employees. This policy
applies to proposals to amend ESPPs if the plan as amended applies to all employees.

C.7 FOR proposals to pay retirement bonuses to directors of Japanese companies unless the directors have
served less than three years

C.8 AGAINST proposals seeking to pay outside directors only in stock

C.9 FOR proposals seeking further disclosure of executive pay or requiring companies to report on their
supplemental executive retirement benefits

C.10 AGAINST proposals to ban all future stock or stock option grants to executives

C.11 AGAINST option plans or grants that apply to directors or employees of "related companies" without
adequate disclosure of the corporate relationship and justification of the option policy

C.12 FOR proposals to exclude pension plan income in the calculation of earnings used in determining
executive bonuses/compensation

D. CAPITAL STRUCTURE

These proposals relate to various requests, principally from management, for
approval of amendments that would alter the capital structure of a company,
such as an increase in authorized shares. As a general matter, the Committee
will support requests that it believes enhance the rights of common
shareholders and oppose requests that appear to be unreasonably dilutive.

The Committee's general policy is to vote:

D.1 AGAINST proposals seeking authorization to issue shares without preemptive rights except for
issuances up to 10% of a non-US company's total outstanding capital

D.2 FOR management proposals seeking preemptive rights or seeking authorization to issue shares with
preemptive rights

D.3 FOR management proposals approving share repurchase programs

D.4 FOR management proposals to split a company's stock

D.5 FOR management proposals to denominate or authorize denomination of securities or other obligations
or assets in Euros

D.6 FOR proposals requiring a company to expense stock options (unless the company has already publicly
committed to do so by a certain date).

E. CORPORATE CHARTER AND BY-LAWS

These proposals relate to various requests for approval of amendments to a
corporation's charter or by-laws, principally for the purpose of adopting or
redeeming "poison pills". As a general matter, the Committee opposes poison
pill provisions.

The Committee's general policy is to vote:

E.1 AGAINST proposals seeking to adopt a poison pill

E.2 FOR proposals seeking to redeem a poison pill

E.3 FOR proposals seeking to have poison pills submitted to shareholders for ratification

E.4 FOR management proposals to change the company's name

F. CORPORATE MEETINGS

These are routine proposals relating to various requests regarding the
formalities of corporate meetings.

The Committee's general policy is to vote:

F.1 AGAINST proposals that seek authority to act on "any other business that may arise"

F.2 FOR proposals designating two shareholders to keep minutes of the meeting

F.3 FOR proposals concerning accepting or approving financial statements and statutory reports

F.4 FOR proposals approving the discharge of management and the supervisory board

F.5 FOR proposals approving the allocation of income and the dividend

F.6 FOR proposals seeking authorization to file required documents/other formalities

F.7 FOR proposals to authorize the corporate board to ratify and execute approved resolutions

F.8 FOR proposals appointing inspectors of elections

F.9 FOR proposals electing a chair of the meeting

F.10 FOR proposals to permit "virtual" shareholder meetings over the Internet

F.11 AGAINST proposals to require rotating sites for shareholder meetings

G. INVESTMENT COMPANIES

These proposals relate to proxy issues that are associated solely with
holdings of shares of investment companies, including, but not limited to,
investment companies for which BlackRock provides investment advisory,
administrative and/or other services. As with other types of companies, the
Committee believes that a fund's Board of Directors (rather than its
shareholders) is best-positioned to set fund policy and oversee

management. However, the Committee opposes granting Boards of Directors
authority over certain matters, such as changes to a fund's investment
objective, that the Investment Company Act of 1940 envisions will be approved
directly by shareholders.

The Committee's general policy is to vote:

G.1 FOR nominees for director of mutual funds in uncontested elections, EXCEPT FOR nominees who

. ignore a shareholder proposal that was approved by either a majority of the shares outstanding in
any year or by the majority of votes cast for two consecutive years

. are interested directors who serve on the audit or nominating committees or on a full Board that
does not have such committees composed exclusively of independent directors

. on a case-by-case basis, have served as directors of companies with allegedly poor corporate
governance

G.2 FOR the establishment of new series or classes of shares

G.3 AGAINST proposals to change a fund's investment objective to nonfundamental

G.4 FOR proposals to establish a master-feeder structure or authorizing the Board to approve a master-feeder
structure without a further shareholder vote

G.5 AGAINST a shareholder proposal for the establishment of a director ownership requirement

G.6 FOR classified boards of closed-end investment companies

H. ENVIRONMENTAL AND SOCIAL ISSUES

These are shareholder proposals to limit corporate conduct in some manner
that relates to the shareholder's environmental or social concerns. The
Committee generally believes that annual shareholder meetings are inappropriate
forums for the discussion of larger social issues, and opposes shareholder
resolutions "micromanaging" corporate conduct or requesting release of
information that would not help a shareholder evaluate an investment in the
corporation as an economic matter. While the Committee is generally supportive
of proposals to require corporate disclosure of matters that seem relevant and
material to the economic interests of shareholders, the Committee is generally
not supportive of proposals to require disclosure of corporate matters for
other purposes.

The Committee's general policy is to vote:

H.1 AGAINST proposals seeking to have companies adopt international codes of conduct

H.2 AGAINST proposals seeking to have companies provide non- required reports on:

. environmental liabilities;

. bank lending policies;

. corporate political contributions or activities;

. alcohol advertising and efforts to discourage drinking by minors;

. costs and risk of doing business in any individual country;

. involvement in nuclear defense systems

H.3 AGAINST proposals requesting reports on Maquiladora operations or on CERES principles

H.4 AGAINST proposals seeking implementation of the CERES principles

NOTICE TO CLIENTS

BlackRock will make records of any proxy vote it has made on behalf of a
client available to such client upon request./11/ BlackRock will use its best
efforts to treat proxy votes of clients as confidential, except as it may
decide to best serve its clients' interests or as may be necessary to effect
such votes or as may be required by law.

BlackRock encourage clients with an interest in particular proxy voting
issues to make their views known to BlackRock, provided that, in the absence of
specific written direction from a client on how to vote that client's proxies,
BlackRock reserves the right to vote any proxy in a manner it deems in the best
interests of its clients, as it determines in its sole discretion.

These policies are as of the date indicated on the cover hereof. The
Committee may subsequently amend these policies at any time, without notice.

- - --------
/11/ Such request may be made to the client's portfolio or relationship manager
or addressed in writing to Secretary, BlackRock Equity Investment Policy
Oversight Committee, Legal and Compliance Department, BlackRock Inc., 40
East 52/nd/ Street, New York, New York 10022.

I. PROXY VOTING POLICY AND PROCEDURES

A. POLICY.

Proxy voting is an important right of shareholders and reasonable care and
diligence must be undertaken to ensure that such rights are properly and timely
exercised. When DVM has discretion to vote the proxies of its Clients, it will
vote those proxies in the best interest of its Clients and in accordance with
these policies and procedures.

B. PROXY VOTING PROCEDURES.

All proxies received by Dreman Value Management, LLC will be sent to the
Chief Operating Officer, VP of Operations, or their designate. The person that
receives the proxy will:

1. Keep a record of each proxy received.

2. Forward the proxy to both the Portfolio Manager and DVM's Chief
Investment Officer (the "CIO").

3. Determine which accounts managed by DVM holds the security to which
the proxy relates.

4. Provide the Portfolio Manager and the CIO with a list of accounts that
hold the security, together with the number of votes each account controls
(reconciling any duplications), and the date by which DVM must vote the
proxy in order to allow enough time for the completed proxy to be returned
to the issuer prior to the vote taking place.

5. Absent material conflicts (see Section V), the Portfolio Manager and
CIO will determine how DVM should vote the proxy. The Portfolio Manager and
the CIO will send their decision on how Dreman Value Management, LLC will
vote the proxy to the Chief Operating Officer, VP of Operations, or their
designee. The person receiving the instructions is responsible for
completing the proxy and mailing the proxy in a timely and appropriate
manner.

6. DVM may retain a third party to assist it in coordinating and voting
proxies with respect to Client securities. If so, the Chief Operating
Officer or VP of Operations shall monitor the third party to assure that all
proxies are being properly voted and appropriate records are being retained.

7. Where a Client specifies in writing that it will maintain the
authority to vote proxies itself or that it has delegated the right to vote
proxies to a third party, DVM will not vote the securities and will direct
the relevant custodian to send the proxy material directly to the Client. If
any proxy material is received by DVM for such account, it will promptly be
forwarded to the Client or specified third party.

8. DVM shall promptly provide to each investment company Client for which
it has discretion to vote proxies, any and all information necessary for
such investment company Client, or its investment adviser or administrator,
to timely file its Form N-PX under the 1940 Act. Form N-PX will provide
information concerning each matter relating to a portfolio security
considered at any shareholder meeting with respect to which an investment
company Client was entitled to vote. Each Form N-PX will need to be filed no
later than August 31/st/ of each year, and will cover all proxy votes with
respect to which a mutual fund was entitled to vote for the period July 1st
through June 30th. DVM shall maintain and provide the following information
concerning any shareholder meetings with respect to which an investment
company Client was entitled to vote:

. the name of the issuer of the portfolio security;

. the exchange ticker symbol of the portfolio security/1/;

. the CUSIP number of the portfolio security/1/;

. the shareholder meeting date;

- - --------
/1/ The exchange ticker symbol and CUSIP number may be difficult to obtain for
certain portfolio securities, such as foreign issuers. Accordingly, such
information may be omitted if it's not available through reasonably
practicable means.

. a brief description of the matter voted on;

. whether the matter was put forward by the issuer or a shareholder;

. whether the investment company Client voted;

. how the investment company Client cast its vote; and

. whether the investment company Client cast its vote for or against
management.

C. VOTING GUIDELINES.

In the absence of specific voting guidelines from a Client, DVM will vote
proxies in the best interest of each particular Client, which may result in
different voting results for proxies for the same issuer. DVM believes that
voting proxies in accordance with the following guidelines is in the best
interest of its Client.

Generally, DVM will vote in favor of routine corporate housekeeping
proposals, including election of directors (where no corporate governance
issues are implicated), selection of auditors, and increases in or
reclassification of common stock.

Generally, DVM will vote against proposals that make it more difficult to
replace members of the issuer's board of directors, including proposals to
stagger the board, cause management to be overrepresented on the board,
introduce cumulative voting, introduce unequal voting rights, and create
supermajority voting.

For other proposals, DVM shall determine whether a proposal is in the best
interest of its Clients and may take into account the following factors, among
others:

1. Whether the proposal was recommended by management and DVM's opinion
of management;

2. Whether the proposal acts to entrench existing management; and

3. Whether the proposal fairly compensates management for past and future
performance.

DVM reserves the right to add to these factors as it deems necessary in
order to ensure that further categories of proposals are covered and that the
general principles in determining how to vote all proxies are fully stated.

D. CONFLICTS OF INTEREST.

The Compliance Officer will identify any conflicts that exist between the
interest of DVM and its Clients. This examination will include a review of the
relationship of DVM and its affiliates with the issuer of each security [and
any of the issuer's affiliates] to determine if the issuer is a Client of DVM
or an affiliate of DVM or has some other relationship with DVM or a Client of
DVM.

If a material conflict exist, DVM will determine whether voting in
accordance with the voting guidelines and factors described above is in the
best interest of the Client. DVM will also determine whether it is appropriate
to disclose the conflict to the affected Clients and, except in the case of
Clients that are subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), give the Clients the opportunity to vote their
proxies themselves. In the case of ERISA Clients, if the Investment Management
Agreement reserves to the ERISA Client the authority to vote proxies when DVM
determines it has a material conflict that affects its best judgment as an
ERISA fiduciary, DVM will give the ERISA Client the opportunity to vote the
proxies themselves.

E. DISCLOSURE.

DVM will disclose in its Form ADV, Part II that Clients may contact the COO
or CCO or Compliance Manager, or Compliance staff person, via e-mail or
telephone at mappleton@dreman.com or 201-793-2005 in order to obtain
information on how DVM voted such Client's proxies, and to request a copy of
these policies and procedures. If a Client requests this information, the CCO
will prepare a written response to the Client that lists,

with respect to each voted proxy that the Client has inquired about, (1) the
name of the issuer; (2) the proposal voted upon and (3) how DVM voted the
Client's proxy.

A concise summary of these Proxy Voting Policies and Procedures will be
included in DVM's Form ADV, Part II, and will be updated whenever these
policies and procedures are updated. The CCO or his designee will arrange for a
copy of this summary to be sent to all existing Clients, either as a separate
mailing or along with a periodic account statement or other correspondence sent
to Clients.

F. RECORD KEEPING.

The Compliance Officer will maintain files relating to DVM proxy voting
procedures. Records will be maintained and preserved for five years from the
end of the fiscal year during which the last entry was made on a record, with
records for the first two years kept in the offices of DVM. Records of the
following will be included in the files:

1. Copies of these proxy voting policies and procedures and any
amendments thereto.

2. A copy of each proxy statement that DVM receives provided however that
DVM may rely on obtaining a copy of proxy statements from the SEC's EDGAR
system for those proxy statements that are so available. DVM may also choose
to have a third party retain a copy of the proxy statements, provided that
third party undertakes to provide a copy of the proxy statement promptly
upon request.

3. A record of each vote that DVM casts. DVM may also rely on a third
party to retain a copy of the votes cast, provided that third party
undertakes to provide a copy of the record promptly upon request.

4. A copy of any document DVM created that was material to making a
decision how to vote proxies, or that memorializes that decision.

5. A copy of each written Client request for information on how DVM voted
such Client's proxies, and a copy of any written response to any (written
and oral) Client request for information on how DVM voted its proxy.

6. DVM will coordinate with all investment company Clients to assist in
the provision of all information required to be filed on Form N-PX.

FRANKLIN MUTUAL ADVISERS, LLC

PROXY VOTING POLICIES & PROCEDURES

RESPONSIBILITY OF INVESTMENT MANAGER TO VOTE PROXIES

Franklin Mutual Advisers, LLC (hereinafter "Investment Manager") has
delegated its administrative duties with respect to voting proxies to the Proxy
Group within Franklin Templeton Companies, LLC (the "Proxy Group"), a
wholly-owned subsidiary of Franklin Resources, Inc. Franklin Templeton
Companies, LLC provides a variety of general corporate services to its
affiliates, including but not limited to legal and compliance activities. Proxy
duties consist of analyzing proxy statements of issuers whose stock is owned by
any client (including both investment companies and any separate accounts
managed by Investment Manager) that has either delegated proxy voting
administrative responsibility to Investment Manager or has asked for
information and/or recommendations on the issues to be voted. The Proxy Group
will process proxy votes on behalf of, and Investment Manager votes proxies
solely in the interests of, separate account clients, Investment
Manager-managed mutual fund shareholders, or, where employee benefit plan
assets are involved, in the interests of the plan participants and
beneficiaries (collectively, "Advisory Clients") that have properly delegated
such responsibility or will inform Advisory Clients that have not delegated the
voting responsibility but that have requested voting advice about Investment
Manager's views on such proxy votes. The Proxy Group also provides these
services to other advisory affiliates of Investment Manager.

HOW INVESTMENT MANAGER VOTES PROXIES

FIDUCIARY CONSIDERATIONS

All proxies received by the Proxy Group will be voted based upon Investment
Manager's instructions and/or policies. To assist it in analyzing proxies,
Investment Manager subscribes to RiskMetrics Group ("RiskMetrics"), an
unaffiliated third party corporate governance research service that provides
in-depth analyses of shareholder meeting agendas, vote recommendations, record
keeping and vote disclosure services. In addition, Investment Manager
subscribes to Glass Lewis & Co., LLC ("Glass Lewis"), an unaffiliated third
party analytical research firm, to receive analyses and vote recommendations on
the shareholder meetings of publicly held U.S. companies. Although RiskMetrics'
and/or Glass Lewis' analyses are thoroughly reviewed and considered in making a
final voting decision, Investment Manager does not consider recommendations
from RiskMetrics, Glass Lewis, or any other third party to be determinative of
Investment Manager's ultimate decision. As a matter of policy, the officers,
directors and employees of Investment Manager and the Proxy Group will not be
influenced by outside sources whose interests conflict with the interests of
Advisory Clients.

CONFLICTS OF INTEREST

All conflicts of interest will be resolved in the interests of the Advisory
Clients. Investment Manager is an affiliate of a large, diverse financial
services firm with many affiliates and makes its best efforts to avoid
conflicts of interest. However, conflicts of interest can arise in situations
where:

1. The issuer is a client/1/ of Investment Manager or its affiliates;

2. The issuer is a vendor whose products or services are material or
significant to the business of Investment Manager or its affiliates;

- - --------
/1/ For purposes of this section, a "client" does not include underlying
investors in a commingled trust, Canadian pooled fund, or other pooled
investment vehicle managed by the Investment Manager or its affiliates.
Sponsors of funds sub-advised by Investment Manager or its affiliates will
be considered a "client."

3. The issuer is an entity participating to a material extent in the
distribution of investment products advised, administered or sponsored by
Investment Manager or its affiliates (e.g., a broker, dealer or bank);/2/

4. An Access Person/3/ of Investment Manager or its affiliates also
serves as a director or officer of the issuer;

5. A director or trustee of Franklin Resources, Inc. or of a Franklin
Templeton investment product, or an immediate family member/4/ of such
director or trustee, also serves as an officer or director of the issuer; or

6. The issuer is Franklin Resources, Inc. or any of its proprietary
investment products.

Nonetheless, even though a potential conflict of interest exists, the
Investment Manager may vote in opposition to the recommendations of an issuer's
management.

Material conflicts of interest are identified by the Proxy Group based upon
analyses of client, broker and vendor lists, information periodically gathered
from directors and officers, and information derived from other sources,
including public filings. The Proxy Group gathers and analyzes this information
on a best efforts basis, as much of this information is provided directly by
individuals and groups other than the Proxy Group, and the Proxy Group relies
on the accuracy of the information it receives from such parties.

In situations where a material conflict of interest is identified, the Proxy
Group may defer to the voting recommendation of RiskMetrics, Glass Lewis, or
those of another independent third party provider of proxy services or send the
proxy directly to the relevant Advisory Clients with the Investment Manager's
recommendation regarding the vote for approval. If the conflict is not resolved
by the Advisory Client, the Proxy Group may refer the matter, along with the
recommended course of action by the Investment Manager, if any, to a Proxy
Review Committee comprised of representatives from the Portfolio Management
(which may include portfolio managers and/or research analysts employed by
Investment Manager), Fund Administration, Legal and Compliance Departments
within Franklin Templeton for evaluation and voting instructions. The Proxy
Review Committee may defer to the voting recommendation of RiskMetrics, Glass
Lewis, or those of another independent third party provider of proxy services
or send the proxy directly to the relevant Advisory Clients.

Where the Proxy Group or the Proxy Review Committee refers a matter to an
Advisory Client, it may rely upon the instructions of a representative of the
Advisory Client, such as the board of directors or trustees or a committee of
the board in the case of a U. S. registered mutual fund, the conducting officer
in the case of an open-ended collective investment scheme formed as a Societe
d'investissement a capital variable (SICAV), the Independent Review Committee
for Canadian investment funds, or a plan administrator in the case of an
employee benefit plan. The Proxy Group or the Proxy Review Committee may
determine to vote all shares held by Advisory Clients in accordance with the
instructions of one or more of the Advisory Clients.

- - --------
/2/ The top 40 executing broker-dealers (based on gross brokerage commissions
and client commissions), and distributors (based on aggregate 12b-1
distribution fees), as determined on a quarterly basis, will be considered
to present a potential conflict of interest. In addition, any insurance
company that has entered into a participation agreement with a Franklin
Templeton entity to distribute the Franklin Templeton Variable Insurance
Products Trust or other variable products will be considered to present a
potential conflict of interest.
/3/ "Access Person" shall have the meaning provided under the current Code of
Ethics of Franklin Resources, Inc.
/4/ The term "immediate family member" means a person's spouse; child residing
in the person's household (including step and adoptive children); and any
dependent of the person, as defined in Section 152 of the Internal Revenue
Code (26 U.S.C. 152).

to defer to an independent third party or refer a matter to an Advisory
Client); report the results of such votes to Investment Manager's clients as
may be requested; and recommend changes to the Proxy Voting Policies and
Procedures as appropriate.

The Proxy Review Committee will also decide whether to vote proxies for
securities deemed to present conflicts of interest that are sold following a
record date, but before a shareholder meeting date. The Proxy Review Committee
may consider various factors in deciding whether to vote such proxies,
including Investment Manager's long-term view of the issuer's securities for
investment, or it may defer the decision to vote to the applicable Advisory
Client.

Where a material conflict of interest has been identified, but the items on
which the Investment Manager's vote recommendations differ from Glass Lewis,
RiskMetrics, or another independent third party provider of proxy services
relate specifically to (1) shareholder proposals regarding social or
environmental issues or political contributions, (2) "Other Business" without
describing the matters that might be considered, or (3) items the Investment
Manager wishes to vote in opposition to the recommendations of an issuer's
management, the Proxy Group may defer to the vote recommendations of the
Investment Manager rather than sending the proxy directly to the relevant
Advisory Clients for approval.

To avoid certain potential conflicts of interest, the Investment Manager
will employ echo voting, if possible, in the following instances: (1) when a
Franklin Templeton investment company invests in an underlying fund in reliance
on any one of Sections 12(d)(1)(E), (F), or (G) of the Investment Company Act
of 1940, as amended, or pursuant to an SEC exemptive order; (2) when a Franklin
Templeton investment company invests uninvested cash in affiliated money market
funds pursuant to an SEC exemptive order ("cash sweep arrangement"); or
(3) when required pursuant to an account's governing documents or applicable
law. Echo voting means that the Investment Manager will vote the shares in the
same proportion as the vote of all of the other holders of the fund's shares.

WEIGHT GIVEN MANAGEMENT RECOMMENDATIONS

One of the primary factors Investment Manager considers when determining the
desirability of investing in a particular company is the quality and depth of
that company's management. Accordingly, the recommendation of management on any
issue is a factor that Investment Manager considers in determining how proxies
should be voted. However, Investment Manager does not consider recommendations
from management to be determinative of Investment Manager's ultimate decision.
As a matter of practice, the votes with respect to most issues are cast in
accordance with the position of the company's management. Each issue, however,
is considered on its own merits, and Investment Manager will not support the
position of a company's management in any situation where it determines that
the ratification of management's position would adversely affect the investment
merits of owning that company's shares.

THE PROXY GROUP

The Proxy Group is part of the Franklin Templeton Companies, LLC Legal
Department and is overseen by legal counsel. Full-time staff members are
devoted to proxy voting administration and providing support and assistance
where needed. On a daily basis, the Proxy Group will review each proxy upon
receipt as well as any agendas, materials and recommendations that they receive
from RiskMetrics, Glass Lewis, or other sources. The Proxy Group maintains a
log of all shareholder meetings that are scheduled for companies whose
securities are held by Investment Manager's managed funds and accounts. For
each shareholder meeting, a member of the Proxy Group will consult with the
research analyst that follows the security and provide the analyst with the
meeting notice, agenda, RiskMetrics and/or Glass Lewis analyses,
recommendations and any other available information. Except in situations
identified as presenting material conflicts of interest, Investment Manager's
research analyst and relevant portfolio manager(s) are responsible for making
the final voting decision based on their review of the agenda, RiskMetrics
and/or Glass Lewis analyses, their knowledge of the company and any other
information readily available. In situations where the Investment Manager has
not responded with vote recommendations to the Proxy Group by the deadline
date, the Proxy Group may defer to the vote

recommendations of an independent third party provider of proxy services.
Except in cases where the Proxy Group is deferring to the voting recommendation
of an independent third party service provider, the Proxy Group must obtain
voting instructions from Investment Manager's research analyst, relevant
portfolio manager(s), legal counsel and/or the Advisory Client or Proxy Review
Committee prior to submitting the vote.

GENERAL PROXY VOTING GUIDELINES

Investment Manager has adopted general guidelines for voting proxies as
summarized below. In keeping with its fiduciary obligations to its Advisory
Clients, Investment Manager reviews all proposals, even those that may be
considered to be routine matters. Although these guidelines are to be followed
as a general policy, in all cases each proxy and proposal will be considered
based on the relevant facts and circumstances. Investment Manager may deviate
from the general policies and procedures when it determines that the particular
facts and circumstances warrant such deviation to protect the interests of the
Advisory Clients. These guidelines cannot provide an exhaustive list of all the
issues that may arise nor can Investment Manager anticipate all future
situations. Corporate governance issues are diverse and continually evolving
and Investment Manager devotes significant time and resources to monitor these
changes.

INVESTMENT MANAGER'S PROXY VOTING POLICIES AND PRINCIPLES

Investment Manager's proxy voting positions have been developed based on
years of experience with proxy voting and corporate governance issues. These
principles have been reviewed by various members of Investment Manager's
organization, including portfolio management, legal counsel, and Investment
Manager's officers. The Board of Directors of Franklin Templeton's
U.S.-registered mutual funds will approve the proxy voting policies and
procedures annually.

The following guidelines reflect what Investment Manager believes to be good
corporate governance and behavior:

BOARD OF DIRECTORS: The election of directors and an independent board are
key to good corporate governance. Directors are expected to be competent
individuals and they should be accountable and responsive to shareholders.
Investment Manager supports an independent board of directors, and prefers that
key committees such as audit, nominating, and compensation committees be
comprised of independent directors. Investment Manager will generally vote
against management efforts to classify a board and will generally support
proposals to declassify the board of directors. Investment Manager will
consider withholding votes from directors who have attended less than 75% of
meetings without a valid reason. While generally in favor of separating
Chairman and CEO positions, Investment Manager will review this issue on a
case-by-case basis taking into consideration other factors including the
company's corporate governance guidelines and performance. Investment Manager
evaluates proposals to restore or provide for cumulative voting on a
case-by-case basis and considers such factors as corporate governance
provisions as well as relative performance. The Investment Manager generally
will support non-binding shareholder proposals to require a majority vote
standard for the election of directors; however, if these proposals are
binding, the Investment Manager will give careful review on a case-by-case
basis of the potential ramifications of such implementation.

RATIFICATION OF AUDITORS: In light of several high profile accounting
scandals, Investment Manager will closely scrutinize the role and performance
of auditors. On a case-by-case basis, Investment Manager will examine proposals
relating to non-audit relationships and non-audit fees. Investment Manager will
also consider, on a case-by-case basis, proposals to rotate auditors, and will
vote against the ratification of auditors when there is clear and compelling
evidence of accounting irregularities or negligence attributable to the
auditors.

MANAGEMENT & DIRECTOR COMPENSATION: A company's equity-based compensation
plan should be in alignment with the shareholders' long-term interests.
Investment Manager believes that executive compensation should be directly
linked to the performance of the company. Investment Manager evaluates plans on
a case-by-case basis by considering several factors to determine whether the
plan is fair and reasonable. Investment Manager reviews the RiskMetrics
quantitative model utilized to assess such plans and/or the Glass Lewis
evaluation of the plan. Investment Manager will generally oppose plans that
have the potential to be excessively

dilutive, and will almost always oppose plans that are structured to allow the
repricing of underwater options, or plans that have an automatic share
replenishment "evergreen" feature. Investment Manager will generally support
employee stock option plans in which the purchase price is at least 85% of fair
market value, and when potential dilution is 10% or less.

Severance compensation arrangements will be reviewed on a case-by-case
basis, although Investment Manager will generally oppose "golden parachutes"
that are considered excessive. Investment Manager will normally support
proposals that require that a percentage of directors' compensation be in the
form of common stock, as it aligns their interests with those of the
shareholders.

ANTI-TAKEOVER MECHANISMS AND RELATED ISSUES: Investment Manager generally
opposes anti-takeover measures since they tend to reduce shareholder rights.
However, as with all proxy issues, Investment Manager conducts an independent
review of each anti-takeover proposal. On occasion, Investment Manager may vote
with management when the research analyst has concluded that the proposal is
not onerous and would not harm Advisory Clients' interests as stockholders.
Investment Manager generally supports proposals that require shareholder rights
plans ("poison pills") to be subject to a shareholder vote. Investment Manager
will closely evaluate shareholder rights' plans on a case-by-case basis to
determine whether or not they warrant support. Investment Manager will
generally vote against any proposal to issue stock that has unequal or
subordinate voting rights. In addition, Investment Manager generally opposes
any supermajority voting requirements as well as the payment of "greenmail."
Investment Manager usually supports "fair price" provisions and confidential
voting.

CHANGES TO CAPITAL STRUCTURE: Investment Manager realizes that a company's
financing decisions have a significant impact on its shareholders, particularly
when they involve the issuance of additional shares of common or preferred
stock or the assumption of additional debt. Investment Manager will carefully
review, on a case-by-case basis, proposals by companies to increase authorized
shares and the purpose for the increase. Investment Manager will generally not
vote in favor of dual-class capital structures to increase the number of
authorized shares where that class of stock would have superior voting rights.
Investment Manager will generally vote in favor of the issuance of preferred
stock in cases where the company specifies the voting, dividend, conversion and
other rights of such stock and the terms of the preferred stock issuance are
deemed reasonable. Investment Manager will review proposals seeking preemptive
rights on a case-by-case basis.

MERGERS AND CORPORATE RESTRUCTURING: Mergers and acquisitions will be
subject to careful review by the research analyst to determine whether they
would be beneficial to shareholders. Investment Manager will analyze various
economic and strategic factors in making the final decision on a merger or
acquisition. Corporate restructuring proposals are also subject to a thorough
examination on a case-by-case basis.

SOCIAL AND CORPORATE POLICY ISSUES: As a fiduciary, Investment Manager is
primarily concerned about the financial interests of its Advisory Clients.
Investment Manager will generally give management discretion with regard to
social, environmental and ethical issues although Investment Manager may vote
in favor of those issues that are believed to have significant economic
benefits or implications.

GLOBAL CORPORATE GOVERNANCE: Investment Manager manages investments in
countries worldwide. Many of the tenets discussed above are applied to
Investment Manager's proxy voting decisions for international investments.
However, Investment Manager must be flexible in these worldwide markets and
must be mindful of the varied market practices of each region. As experienced
money managers, Investment Manager's analysts are skilled in understanding the
complexities of the regions in which they specialize and are trained to analyze
proxy issues germane to their regions.

PROXY PROCEDURES

The Proxy Group is fully cognizant of its responsibility to process proxies
and maintain proxy records pursuant to applicable rules and regulations,
including those of the U.S. Securities and Exchange Commission ("SEC") and the
Canadian Securities Administrators ("CSA"). In addition, Investment Manager
understands its fiduciary duty to vote proxies and that proxy voting decisions
may affect the value of shareholdings. Therefore,

Investment Manager will attempt to process every proxy it receives for all
domestic and foreign securities. However, there may be situations in which
Investment Manager cannot vote proxies. For example, if the cost of voting a
foreign proxy outweighs the benefit of voting, the Proxy Group may refrain from
processing that vote. Additionally, the Proxy Group may not be given enough
time to process the vote. For example, the Proxy Group, through no fault of
their own, may receive a meeting notice from the company too late, or may be
unable to obtain a timely translation of the agenda. In addition, if Investment
Manager has outstanding sell orders, or anticipates placing sell orders prior
to the date of the shareholder meeting, in certain markets that have blocking
restrictions, the proxies for those meetings may not be voted in order to
facilitate the sale of those securities. If a security is on loan, Investment
Manager may determine that it is not in the best interests of its clients to
recall the security for voting purposes. Although Investment Manager may hold
shares on a company's record date, should it sell them prior to the company's
meeting date, Investment Manager ultimately may decide not to vote those
shares. Lastly, the Investment Manager will not vote proxies when prohibited
from voting by applicable law.

Investment Manager may vote against an agenda item where no further
information is provided, particularly in non-U.S. markets. For example, if
"Other Business" is listed on the agenda with no further information included
in the proxy materials, Investment Manager may vote against the item to send a
message to the company that if it had provided additional information,
Investment Manager may have voted in favor of that item. Investment Manager may
also enter a "withhold" vote on the election of certain directors from time to
time based on individual situations, particularly where Investment Manager is
not in favor of electing a director and there is no provision for voting
against such director.

The following describes the standard procedures that are to be followed with
respect to carrying out Investment Manager's proxy policy:

1. The Proxy Group will identify all Advisory Clients, maintain a list of
those clients, and indicate those Advisory Clients who have delegated proxy
voting authority to the Investment Manager. The Proxy Group will
periodically review and update this list.

2. All relevant information in the proxy materials received (e.g., the
record date of the meeting) will be recorded immediately by the Proxy Group
in a database to maintain control over such materials. The Proxy Group will
confirm each relevant Advisory Client's holdings of the securities and that
the client is eligible to vote.

3. The Proxy Group will review and compile information on each proxy upon
receipt of any agendas, materials, reports, recommendations from RiskMetrics
and/or Glass Lewis, or other information. The Proxy Group will then forward
this information to the appropriate research analyst and/or legal counsel
for review and voting instructions.

4. In determining how to vote, Investment Manager's analysts and relevant
portfolio manager(s) will consider the General Proxy Voting Guidelines set
forth above, their in-depth knowledge of the company, any readily available
information and research about the company and its agenda items, and the
recommendations put forth by RiskMetrics, Glass Lewis, or other independent
third party providers of proxy services.

5. The Proxy Group is responsible for maintaining the documentation that
supports Investment Manager's voting position. Such documentation may
include, but is not limited to, any information provided by RiskMetrics,
Glass Lewis, or other proxy service providers, and, especially as to
non-routine, materially significant or controversial matters, memoranda
describing the position it has taken. Additionally, the Proxy Group may
include documentation obtained from the research analyst, portfolio manager,
legal counsel and/or the Proxy Review Committee.

6. After the proxy is completed but before it is returned to the issuer
and/or its agent, the Proxy Group may review those situations including
special or unique documentation to determine that the appropriate
documentation has been created, including conflict of interest screening.

foreign securities. However, in certain foreign jurisdictions it may be
impossible to return the proxy 10 days in advance of the meeting. In these
situations, the Proxy Group will use its best efforts to send the proxy vote
to RiskMetrics in sufficient time for the vote to be processed.

8. The Proxy Group prepares reports for each client that has requested a
record of votes cast. The report specifies the proxy issues that have been
voted for the client during the requested period and the position taken with
respect to each issue. The Proxy Group sends one copy to the client, retains
a copy in the Proxy Group's files and forwards a copy to either the
appropriate portfolio manager or the client service representative. While
many Advisory Clients prefer quarterly or annual reports, the Proxy Group
will provide reports for any timeframe requested by a client.

9. If the Franklin Templeton Services, LLC Fund Treasury Department
learns of a vote on a material event that will affect a security on loan,
the Fund Treasury Department will notify Investment Manager and obtain
instructions regarding whether Investment Manager desires the Fund Treasury
Department to contact the custodian bank in an effort to retrieve the
securities. If so requested by Investment Manager, the Fund Treasury
Department shall use its best efforts to recall any security on loan and
will use other practicable and legally enforceable means to ensure that
Investment Manager is able to fulfill its fiduciary duty to vote proxies for
Advisory Clients with respect to such loaned securities. The Fund Treasury
Department will advise the Proxy Group of all recalled securities.

10. The Proxy Group, in conjunction with Legal Staff responsible for
coordinating Fund disclosure, on a timely basis, will file all required Form
N-PXs, with respect to investment company clients, disclose that its proxy
voting record is available on the web site, and will make available the
information disclosed in its Form N-PX as soon as is reasonably practicable
after filing Form N-PX with the SEC.

11. The Proxy Group, in conjunction with Legal Staff responsible for
coordinating Fund disclosure, will ensure that all required disclosure about
proxy voting of the investment company clients is made in such clients'
financial statements and disclosure documents.

12. The Proxy Group will review the guidelines of RiskMetrics and Glass
Lewis, with special emphasis on the factors they use with respect to proxy
voting recommendations.

13. The Proxy Group will familiarize itself with the procedures of
RiskMetrics that govern the transmission of proxy voting information from
the Proxy Group to RiskMetrics and periodically review how well this process
is functioning.

14. The Proxy Group will investigate, or cause others to investigate, any
and all instances where these Procedures have been violated or there is
evidence that they are not being followed. Based upon the findings of these
investigations, the Proxy Group, if practicable, will recommend amendments
to these Procedures to minimize the likelihood of the reoccurrence of
non-compliance.

15. At least annually, the Proxy Group will verify that:

. Each proxy or a sample of proxies received has been voted in a manner
consistent with these Procedures and the Proxy Voting Guidelines;

. Each proxy or sample of proxies received has been voted in accordance
with the instructions of the Investment Manager;

. Adequate disclosure has been made to clients and fund shareholders
about the procedures and how proxies were voted; and

. Timely filings were made with applicable regulators related to proxy
voting.

Templeton Companies, LLC, 500 East Broward Boulevard, Suite 1500, Fort
Lauderdale, FL 33394, Attention: Proxy Group. Advisory Clients may review
Investment Manager's proxy voting policies and procedures on-line at
www.franklintempleton.com and may request additional copies by calling the
number above. For U.S. mutual fund products, an annual proxy voting record for
the period ending June 30 of each year will be posted to
www.franklintempleton.com no later than August 31 of each year. For Canadian
mutual fund products, an annual proxy voting record for the period ending
June 30 of each year will be posted to www.franklintempleton.ca no later than
August 31 of each year. The Proxy Group will periodically review web site
posting and update the posting when necessary. In addition, the Proxy Group is
responsible for ensuring that the proxy voting policies, procedures and records
of the Investment Manager are available as required by law and is responsible
for overseeing the filing of such policies, procedures and mutual fund voting
records with the SEC, the CSA and other applicable regulators.

As of January 2, 2008

FRANKLIN ADVISERS, INC.

PROXY VOTING POLICIES & PROCEDURES

RESPONSIBILITY OF INVESTMENT MANAGER TO VOTE PROXIES

Franklin Advisers, Inc. (hereinafter "Investment Manager") has delegated its
administrative duties with respect to voting proxies to the Proxy Group within
Franklin Templeton Companies, LLC (the "Proxy Group"), a wholly-owned
subsidiary of Franklin Resources, Inc. Franklin Templeton Companies, LLC
provides a variety of general corporate services to its affiliates, including
but not limited to legal and compliance activities. Proxy duties consist of
analyzing proxy statements of issuers whose stock is owned by any client
(including both investment companies and any separate accounts managed by
Investment Manager) that has either delegated proxy voting administrative
responsibility to Investment Manager or has asked for information and/or
recommendations on the issues to be voted. The Proxy Group will process proxy
votes on behalf of, and Investment Manager votes proxies solely in the
interests of, separate account clients, Investment Manager-managed mutual fund
shareholders, or, where employee benefit plan assets are involved, in the
interests of the plan participants and beneficiaries (collectively, "Advisory
Clients") that have properly delegated such responsibility or will inform
Advisory Clients that have not delegated the voting responsibility but that
have requested voting advice about Investment Manager's views on such proxy
votes. The Proxy Group also provides these services to other advisory
affiliates of Investment Manager.

HOW INVESTMENT MANAGER VOTES PROXIES

FIDUCIARY CONSIDERATIONS

CONFLICTS OF INTEREST

1. The issuer is a client/1/ of Investment Manager or its affiliates;

2. The issuer is a vendor whose products or services are material or
significant to the business of Investment Manager or its affiliates;

4. An Access Person/3/ of Investment Manager or its affiliates also
serves as a director or officer of the issuer;

6. The issuer is Franklin Resources, Inc. or any of its proprietary
investment products.

Nonetheless, even though a potential conflict of interest exists, the
Investment Manager may vote in opposition to the recommendations of an issuer's
management.

an independent third party or refer a matter to an Advisory Client); report the
results of such votes to Investment Manager's clients as may be requested; and
recommend changes to the Proxy Voting Policies and Procedures as appropriate.

WEIGHT GIVEN MANAGEMENT RECOMMENDATIONS

THE PROXY GROUP

Group is deferring to the voting recommendation of an independent third party
service provider, the Proxy Group must obtain voting instructions from
Investment Manager's research analyst, relevant portfolio manager(s), legal
counsel and/or the Advisory Client or Proxy Review Committee prior to
submitting the vote.

GENERAL PROXY VOTING GUIDELINES

INVESTMENT MANAGER'S PROXY VOTING POLICIES AND PRINCIPLES

The following guidelines reflect what Investment Manager believes to be good
corporate governance and behavior:

plans that have an automatic share replenishment "evergreen" feature.
Investment Manager will generally support employee stock option plans in which
the purchase price is at least 85% of fair market value, and when potential
dilution is 10% or less.

PROXY PROCEDURES

However, there may be situations in which Investment Manager cannot vote
proxies. For example, if the cost of voting a foreign proxy outweighs the
benefit of voting, the Proxy Group may refrain from processing that vote.
Additionally, the Proxy Group may not be given enough time to process the vote.
For example, the Proxy Group, through no fault of their own, may receive a
meeting notice from the company too late, or may be unable to obtain a timely
translation of the agenda. In addition, if Investment Manager has outstanding
sell orders, or anticipates placing sell orders prior to the date of the
shareholder meeting, in certain markets that have blocking restrictions, the
proxies for those meetings may not be voted in order to facilitate the sale of
those securities. If a security is on loan, Investment Manager may determine
that it is not in the best interests of its clients to recall the security for
voting purposes. Although Investment Manager may hold shares on a company's
record date, should it sell them prior to the company's meeting date,
Investment Manager ultimately may decide not to vote those shares. Lastly, the
Investment Manager will not vote proxies when prohibited from voting by
applicable law.

The following describes the standard procedures that are to be followed with
respect to carrying out Investment Manager's proxy policy:

in advance of the meeting. In these situations, the Proxy Group will use its
best efforts to send the proxy vote to RiskMetrics in sufficient time for
the vote to be processed.

12. The Proxy Group will review the guidelines of RiskMetrics and Glass
Lewis, with special emphasis on the factors they use with respect to proxy
voting recommendations.

15. At least annually, the Proxy Group will verify that:

. Each proxy or a sample of proxies received has been voted in a manner
consistent with these Procedures and the Proxy Voting Guidelines;

. Each proxy or sample of proxies received has been voted in accordance
with the instructions of the Investment Manager;

. Adequate disclosure has been made to clients and fund shareholders
about the procedures and how proxies were voted; and

. Timely filings were made with applicable regulators related to proxy
voting.

Proxy Group. Advisory Clients may review Investment Manager's proxy voting
policies and procedures on-line at www.franklintempleton.com and may request
additional copies by calling the number above. For U.S. mutual fund products,
an annual proxy voting record for the period ending June 30 of each year will
be posted to www.franklintempleton.com no later than August 31 of each year.
For Canadian mutual fund products, an annual proxy voting record for the period
ending June 30 of each year will be posted to www.franklintempleton.ca no later
than August 31 of each year. The Proxy Group will periodically review web site
posting and update the posting when necessary. In addition, the Proxy Group is
responsible for ensuring that the proxy voting policies, procedures and records
of the Investment Manager are available as required by law and is responsible
for overseeing the filing of such policies, procedures and mutual fund voting
records with the SEC, the CSA and other applicable regulators.

As of January 2, 2008

TEMPLETON GLOBAL ADVISORS LIMITED

PROXY VOTING POLICIES & PROCEDURES

RESPONSIBILITY OF INVESTMENT MANAGER TO VOTE PROXIES

Templeton Global Advisors Limited (hereinafter "Investment Manager") has
delegated its administrative duties with respect to voting proxies to the Proxy
Group within Franklin Templeton Companies, LLC (the "Proxy Group"), a
wholly-owned subsidiary of Franklin Resources, Inc. Franklin Templeton
Companies, LLC provides a variety of general corporate services to its
affiliates, including but not limited to legal and compliance activities. Proxy
duties consist of analyzing proxy statements of issuers whose stock is owned by
any client (including both investment companies and any separate accounts
managed by Investment Manager) that has either delegated proxy voting
administrative responsibility to Investment Manager or has asked for
information and/or recommendations on the issues to be voted. The Proxy Group
will process proxy votes on behalf of, and Investment Manager votes proxies
solely in the interests of, separate account clients, Investment
Manager-managed mutual fund shareholders, or, where employee benefit plan
assets are involved, in the interests of the plan participants and
beneficiaries (collectively, "Advisory Clients") that have properly delegated
such responsibility or will inform Advisory Clients that have not delegated the
voting responsibility but that have requested voting advice about Investment
Manager's views on such proxy votes. The Proxy Group also provides these
services to other advisory affiliates of Investment Manager.

HOW INVESTMENT MANAGER VOTES PROXIES

FIDUCIARY CONSIDERATIONS

CONFLICTS OF INTEREST

1. The issuer is a client/1/ of Investment Manager or its affiliates;

2. The issuer is a vendor whose products or services are material or
significant to the business of Investment Manager or its affiliates;

4. An Access Person/3/ of Investment Manager or its affiliates also
serves as a director or officer of the issuer;

6. The issuer is Franklin Resources, Inc. or any of its proprietary
investment products.

Nonetheless, even though a potential conflict of interest exists, the
Investment Manager may vote in opposition to the recommendations of an issuer's
management.

WEIGHT GIVEN MANAGEMENT RECOMMENDATIONS

THE PROXY GROUP

GENERAL PROXY VOTING GUIDELINES

INVESTMENT MANAGER'S PROXY VOTING POLICIES AND PRINCIPLES

The following guidelines reflect what Investment Manager believes to be good
corporate governance and behavior:

PROXY PROCEDURES

The following describes the standard procedures that are to be followed with
respect to carrying out Investment Manager's proxy policy:

12. The Proxy Group will review the guidelines of RiskMetrics and Glass
Lewis, with special emphasis on the factors they use with respect to proxy
voting recommendations.

15. At least annually, the Proxy Group will verify that:

. Each proxy or a sample of proxies received has been voted in a manner
consistent with these Procedures and the Proxy Voting Guidelines;

. Each proxy or sample of proxies received has been voted in accordance
with the instructions of the Investment Manager;

. Adequate disclosure has been made to clients and fund shareholders
about the procedures and how proxies were voted; and

. Timely filings were made with applicable regulators related to proxy
voting.

As of January 2, 2008

July 2003

GOLDMAN, SACHS & CO.
GOLDMAN SACHS ASSET MANAGEMENT, L.P.
GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
GOLDMAN SACHS PRINCETON LLC
(COLLECTIVELY, "GSAM")

SUMMARY OF POLICY ON PROXY VOTING
FOR INVESTMENT ADVISORY CLIENTS

Proxy voting and our understanding of corporate governance issues are
important elements of the portfolio management services we perform for our
advisory clients who have authorized us to address these matters on their
behalf. Our guiding principles in performing this service are to make proxy
voting decisions that (i) favor proposals that tend to maximize a company's
shareholder value and (ii) are free from the influence of conflicts of interest.

PUBLIC EQUITY INVESTMENTS

OVERVIEW OF GSAM PROXY VOTING POLICY

To implement these general principles for investments in publicly-traded
equities, we have adopted the GSAM Proxy Voting Policy to assist us in making
proxy voting decisions and developing procedures for effecting those decisions.
The GSAM Proxy Voting Policy and associated procedures are designed to ensure
that where GSAM has the authority to vote proxies, GSAM complies with its
legal, fiduciary, and contractual obligations.

The GSAM Proxy Voting Policy addresses a wide variety of individual topics,
including, among other matters, shareholder voting rights, anti-takeover
defenses, board structures and the election of directors, executive and
director compensation, reorganizations, mergers and various shareholder
proposals. It reflects GSAM's fundamental belief that sound corporate
governance will create a framework within which a company can be directed and
managed in the interests of its shareholders. Senior management of GSAM
periodically reviews the GSAM Proxy Voting Policy to ensure it continues to be
consistent with our guiding principles. Clients may request a copy of the GSAM
Proxy Voting Policy for their review by contacting their Goldman Sachs
representative.

IMPLEMENTATION BY PORTFOLIO MANAGEMENT TEAMS

Each GSAM equity portfolio management team ("Portfolio Management Team") has
developed an approach for how best to evaluate proxy votes on an individualized
basis in relation to the GSAM Proxy Voting Policy and each Portfolio Management
Team's investment philosophy and process. For example, our active-equity
Portfolio Management Teams view the analysis of corporate governance practices
as an integral part of the investment research and stock valuation process.
Therefore, on a case-by-case basis, each active-equity Portfolio Management
Team may vote differently from the pre-determined application of the GSAM Proxy
Voting Policy. Our quantitative-equity Portfolio Management Teams, by contrast,
exclusively follow such pre-determined application.

In addition, the GSAM Proxy Voting Policy is designed generally to permit
Portfolio Management Teams to consider applicable regional rules and practices
regarding proxy voting when forming their views on a particular matter.

USE OF THIRD-PARTY SERVICE PROVIDERS

We utilize independent service providers to assist us in determining the
GSAM Proxy Voting Policy and in implementing our proxy voting decisions. The
primary provider we currently use is Institutional Shareholder Services
("ISS"), which provides proxy voting services to many asset managers on a
global basis. Senior GSAM management is responsible for reviewing our
relationship with ISS and for evaluating the quality and effectiveness of the
various services provided by ISS to assist us in satisfying our proxy voting
responsibilities.

Specifically, ISS assists GSAM in the proxy voting and corporate governance
oversight process by developing and updating the ISS Proxy Voting Guidelines,
which are incorporated into the GSAM Proxy Voting Policy, and by providing
research and analysis, recommendations regarding votes, operational
implementation, and recordkeeping and reporting services. GSAM's decision to
retain ISS is based principally on the view the services ISS provides, subject
to GSAM's oversight, will generally result in proxy voting decisions which are
favorable to shareholders' interests. GSAM may, however, hire other service
providers to supplement or replace the services GSAM receives from ISS. In
addition, active-equity Portfolio Management Teams are able to cast votes that
differ from recommendations made by ISS, as detailed in the GSAM Proxy Voting
Policy.

CONFLICTS OF INTEREST

The GSAM Proxy Voting Policy also contains procedures to address potential
conflicts of interest. These procedures include our adoption of and reliance on
the GSAM Proxy Voting Policy, including the ISS Proxy Voting Guidelines, and
the day-to-day implementation of those Guidelines by ISS. The procedures also
establish a process under which an active-equity Portfolio Management Team's
decision to vote against an ISS recommendation is approved by the local Chief
Investment Officer for the requesting Portfolio Management Team and
notification of the vote is provided to the Global Chief Investment Officer for
active-equity investment strategies and other appropriate GSAM personnel.

FIXED INCOME AND PRIVATE INVESTMENTS

Voting decisions with respect to client investments in fixed income
securities and the securities of privately-held issuers generally will be acted
upon by the relevant portfolio managers based on their assessment of the
particular transactions or other matters at issue.

EXTERNAL MANAGERS

Where GSAM places client assets with managers outside of GSAM, whether
through separate accounts, funds-of-funds or other structures, such external
managers generally will be responsible for proxy voting. GSAM may, however,
retain such responsibilities where it deems appropriate.

CLIENT DIRECTION

Clients may choose to vote proxies themselves, in which case they must
arrange for their custodian to send proxy materials directly to them. GSAM can
also accommodate situations where individual clients have developed their own
guidelines with ISS or another proxy service. Clients may also discuss with
GSAM the possibility of receiving individualized reports or other
individualized services regarding proxy voting conducted on their behalf.

[LOGO]
Goldman
Sachs
Asset
Management OCTOBER 2003

GOLDMAN SACHS ASSET MANAGEMENT

POLICY ON PROXY VOTING
FOR INVESTMENT ADVISORY CLIENTS

Goldman Sachs Asset Management ("GSAM")* has adopted the policies and
procedures set out below regarding the voting of proxies on securities held in
client accounts (the "Policy"). These policies and procedures are designed to
ensure that where GSAM has the authority to vote proxies, GSAM complies with
its legal, fiduciary, and contractual obligations.

GUIDING PRINCIPLES

Proxy voting and the analysis of corporate governance issues in general are
important elements of the portfolio management services we provide to our
advisory clients who have authorized us to address these matters on their
behalf. Our guiding principles in performing proxy voting are to make decisions
that (i) favor proposals that tend to maximize a company's shareholder value
and (ii) are not influenced by conflicts of interest. These principles reflect
GSAM's belief that sound corporate governance will create a framework within
which a company can be managed in the interests of its shareholders.

PUBLIC EQUITY INVESTMENTS

To implement these guiding principles for investments in publicly-traded
equities, we follow the Institutional Shareholder Services ("ISS") Standard
Proxy Voting Guidelines (the "Guidelines"), except in circumstances as
described below. The Guidelines embody the positions and factors GSAM generally
considers important in casting proxy votes. They address a wide variety of
individual topics, including, among other matters, shareholder voting rights,
anti-takeover defenses, board structures, the election of directors, executive
and director compensation, reorganizations, mergers, and various shareholder
proposals. Recognizing the complexity and fact-specific nature of many
corporate governance issues, the Guidelines often do not direct a particular
voting outcome, but instead identify factors ISS considers in determining how
the vote should be cast. A summary of the Guidelines is attached as Appendix A.

In connection with each proxy vote, ISS prepares a written analysis and
recommendation (an "ISS Recommendation") that reflects ISS's application of
Guidelines to the particular proxy issues. Where the Guidelines do not direct a
particular response and instead list relevant factors, the ISS Recommendation
will reflect ISS's own evaluation of the factors. As explained more fully
below, however, each GSAM equity portfolio management team ("Portfolio
Management Team") may on any particular proxy vote decide to diverge from the
Guidelines or an ISS Recommendation. In such cases, our procedures require:
(i) the requesting Portfolio Management Team to set forth the reasons for their
decision; (ii) the approval of the Local Chief Investment Officer for the
requesting Portfolio Management Team; (iii) notification to the Global Chief
Investment Officer and other appropriate GSAM personnel; (iv) a determination
that the decision is not influenced by any conflict of interest; and (v) the
creation of a written record reflecting the process.

The principles and positions reflected in this Policy are designed to guide
us in voting proxies, and not necessarily in making investment decisions.
Portfolio Management Teams base their determinations of whether to invest in a
particular company on a variety of factors, and while corporate governance may
be one such factor, it may not be the primary consideration.

- - --------
* For purposes of this Policy, "GSAM" refers, collectively, to the Goldman
Sachs Asset Management unit of Goldman, Sachs & Co.'s Investment Management
Division; Goldman Sachs Asset Management, L.P.; Goldman Sachs Asset
Management International; and Goldman Sachs Princeton LLC.

[LOGO]
Goldman
Sachs
Asset
Management OCTOBER 2003

Senior management of GSAM periodically reviews this Policy, including our
use of the Guidelines, to ensure it continues to be consistent with our guiding
principles.

IMPLEMENTATION BY PORTFOLIO MANAGEMENT TEAMS

General Overview

While it is GSAM's policy generally to follow the Guidelines and the ISS
Recommendations, the active-equity and quantitative-equity Portfolio Management
Teams have developed different approaches for using the Guidelines and ISS
Recommendations in light of their different investment philosophies and
processes.

Active Equity

Our active-equity Portfolio Management Teams view the analysis of corporate
governance practices as an integral part of the investment research and stock
valuation process. Therefore, on a case-by-case basis and subject to the
approval process described above, each active-equity Portfolio Management Team
may vote differently from the Guidelines or a particular ISS Recommendation. In
forming their views on particular matters, our active-equity Portfolio
Management Teams are permitted to consider applicable regional rules and
practices, including codes of conduct and other guides, regarding proxy voting,
in addition to the Guidelines and ISS Recommendations.

In our active-equity investment research process, responsibility for
analyzing corporate board structures and the corporate governance practices of
portfolio companies in connection with proxy voting decisions lies with the
relevant Portfolio Management Team. Accordingly, each active-equity Portfolio
Management Team is charged with performing these functions for the portfolio
companies as part of the team's research efforts.

As part of that research process, each active-equity Portfolio Management
Team has regular internal research meetings to discuss the companies held in a
particular team's investment portfolio. Among the topics that may be discussed
at these meetings are issues pertaining to a portfolio company's record and
policies on corporate governance practices that may affect shareholder value.

Each active-equity Portfolio Management Team determines how to allocate
responsibility for analyzing corporate governance issues and proxy voting
decisions among the team's members. Under each arrangement, the work related to
proxy voting is integrated into our research process. Each active-equity
Portfolio Management Team remains responsible for ensuring that corporate
governance issues are analyzed and proxy votes are cast in a manner consistent
with our guiding principles.

Quantitative Equity

Our quantitative-equity Portfolio Management Teams, by contrast, have
decided to follow the Guidelines and ISS Recommendations exclusively, based on
such Portfolio Management Teams' investment philosophy and approach to
portfolio construction, as well as the evaluation of ISS's services and
methodology in analyzing shareholder and corporate governance matters.
Nevertheless, our quantitative-equity Portfolio Management Teams retain the
authority to revisit this position, with respect to both their general approach
to proxy voting (subject to the approval of GSAM senior management) and any
specific shareholder vote (subject to the approval process described above).

USE OF THIRD-PARTY SERVICE PROVIDERS

We utilize independent service providers, such as ISS, to assist us in
developing substantive proxy voting positions. ISS also updates and revises the
Guidelines on a periodic basis, and any such revisions are reviewed by

[LOGO]
Goldman
Sachs
Asset
Management OCTOBER 2003

GSAM to determine whether they are consistent with our guiding principles. In
addition, ISS assists us in the proxy voting process by providing operational,
recordkeeping and reporting services.

GSAM's decision to retain ISS to perform the services described in this
Policy is based principally on the view the services ISS provides will result
in proxy voting decisions that are consistent with our guiding principles. GSAM
management is responsible for reviewing our relationship with ISS and for
evaluating the quality and effectiveness of the various services provided by
ISS to assist us in satisfying our proxy voting responsibilities.

GSAM may hire other service providers to replace or supplement ISS with
respect to any of the services GSAM currently receives from ISS. In addition,
individual Portfolio Management Teams may supplement the information and
analyses ISS provides from other sources.

CONFLICTS OF INTEREST

Pursuant to this Policy, GSAM has implemented procedures designed to prevent
conflicts of interest from influencing its proxy voting decisions. These
procedures include our use of the Guidelines and ISS Recommendations. Proxy
votes cast by GSAM in accordance with the Guidelines and ISS Recommendations
will not present any conflicts of interest because GSAM casts such votes in
accordance with a pre-determined policy based upon the recommendations of an
independent third party.

Our procedures also prohibit the influence of conflicts of interest where an
active-equity Portfolio Management Team decides to vote against an ISS
Recommendation. In general, conflicts of interest between GSAM and other
businesses within Goldman Sachs should not affect GSAM in light of the
information barrier policies separating GSAM from those other businesses. In
addition, in any particular case, the approval process for a decision to vote
against an ISS Recommendation, as described above, includes an inquiry into
potential conflicts of interest, and GSAM senior management will not approve
decisions that are based on the influence of such conflicts.

FIXED INCOME AND PRIVATE INVESTMENTS

Voting decisions with respect to client investments in fixed income
securities and the securities of privately-held issuers generally will be made
by the relevant portfolio managers based on their assessment of the particular
transactions or other matters at issue.

EXTERNAL MANAGERS

Where GSAM places client assets with managers outside of GSAM, whether
through separate accounts, funds-of-funds or other structures, such external
managers generally will be responsible for voting proxies in accordance with
the managers' own policies. GSAM may, however, retain such responsibilities
where it deems appropriate.

CLIENT DIRECTION

Clients may choose to vote proxies themselves, in which case they must
arrange for their custodians to send proxy materials directly to them. GSAM can
also accommodate individual clients that have developed their own guidelines
with ISS or another proxy service. Clients may also discuss with GSAM the
possibility of receiving individualized reports or other individualized
services regarding proxy voting conducted on their behalf.

APPENDIX A

ISS STANDARD PROXY VOTING GUIDELINES SUMMARY

The following is a concise summary of the ISS Standard Proxy Voting
Guidelines (the "Guidelines"), which form the substantive basis of GSAM's
Policy on Proxy Voting for Investment Advisory Clients ("Policy") with respect
to public equity investments. As described in the main body of the Policy, GSAM
may diverge from the Guidelines and a related ISS recommendation on any
particular proxy vote or in connection with any individual investment decision.

1. AUDITORS

Vote FOR proposals to ratify auditors, unless any of the following apply:

. An auditor has a financial interest in or association with the company,
and is therefore not independent,

. Fees for non-audit services are excessive, or

. There is reason to believe that the independent auditor has rendered an
opinion which is neither accurate nor indicative of the company's
financial position.

2. BOARD OF DIRECTORS

A. VOTING ON DIRECTOR NOMINEES IN UNCONTESTED ELECTIONS

Votes on director nominees should be made on a CASE-BY-CASE basis, examining
the following factors: independence of the board and key board committees,
attendance at board meetings, corporate governance provisions and takeover
activity, long-term company performance, responsiveness to shareholder
proposals, any egregious board actions, and any excessive non-audit fees or
other potential auditor conflicts.

B. CLASSIFICATION/DECLASSIFICATION OF THE BOARD

Vote AGAINST proposals to classify the board.

Vote FOR proposals to repeal classified boards and to elect all directors
annually.

C. INDEPENDENT CHAIRMAN (SEPARATE CHAIRMAN/CEO)

Vote on a CASE-BY-CASE basis shareholder proposals requiring that the
positions of chairman and CEO be held separately. Because some companies have
governance structures in place that counterbalance a combined position, certain
factors should be taken into account in determining whether the proposal
warrants support. These factors include the presence of a lead director, board
and committee independence, governance guidelines, company performance, and
annual review by outside directors of CEO pay.

D. MAJORITY OF INDEPENDENT DIRECTORS/ESTABLISHMENT OF COMMITTEES

Vote FOR shareholder proposals asking that a majority or more of directors
be independent unless the board composition already meets the proposed
threshold by ISS's definition of independence.

Vote FOR shareholder proposals asking that board audit, compensation, and/or
nominating committees be composed exclusively of independent directors if they
currently do not meet that standard.

3. SHAREHOLDER RIGHTS

A. SHAREHOLDER ABILITY TO ACT BY WRITTEN CONSENT

Vote AGAINST proposals to restrict or prohibit shareholder ability to take
action by written consent.

Vote FOR proposals to allow or make easier shareholder action by written
consent.

B. SHAREHOLDER ABILITY TO CALL SPECIAL MEETINGS

Vote AGAINST proposals to restrict or prohibit shareholder ability to call
special meetings.

Vote FOR proposals that remove restrictions on the right of shareholders to
act independently of management.

C. SUPERMAJORITY VOTE REQUIREMENTS

Vote AGAINST proposals to require a supermajority shareholder vote. Vote FOR
proposals to lower supermajority vote requirements.

D. CUMULATIVE VOTING

Vote AGAINST proposals to eliminate cumulative voting.

Vote proposals to restore or permit cumulative voting on a CASE-BY-CASE
basis relative to the company's other governance provisions.

E. CONFIDENTIAL VOTING

Vote FOR shareholder proposals requesting that corporations adopt
confidential voting, use independent vote tabulators and use independent
inspectors of election, as long as the proposal includes a provision for proxy
contests as follows: In the case of a contested election, management should be
permitted to request that the dissident group honor its confidential voting
policy. If the dissidents agree, the policy remains in place. If the dissidents
will not agree, the confidential voting policy is waived.

Vote FOR management proposals to adopt confidential voting.

4. PROXY CONTESTS

A. VOTING FOR DIRECTOR NOMINEES IN CONTESTED ELECTIONS

Votes in a contested election of directors must be evaluated on a
CASE-BY-CASE basis, considering the factors that include the long-term
financial performance, management's track record, qualifications of director
nominees (both slates), and an evaluation of what each side is offering
shareholders.

B. REIMBURSING PROXY SOLICITATION EXPENSES

Vote CASE-BY-CASE. Where ISS recommends in favor of the dissidents, ISS also
recommends voting for reimbursing proxy solicitation expenses.

5. POISON PILLS

Vote FOR shareholder proposals that ask a company to submit its poison pill
for shareholder ratification. Review on a CASE-BY-CASE basis shareholder
proposals to redeem a company's poison pill and management proposals to ratify
a poison pill.

6. MERGERS AND CORPORATE RESTRUCTURINGS

Vote CASE-BY-CASE on mergers and corporate restructurings based on such
features as the fairness opinion, pricing, strategic rationale, and the
negotiating process.

7. REINCORPORATION PROPOSALS

Proposals to change a company's state of incorporation should be evaluated
on a CASE-BY-CASE basis, giving consideration to both financial and corporate
governance concerns, including the reasons for reincorporating, a comparison of
the governance provisions, and a comparison of the jurisdictional laws. Vote
FOR reincorporation when the economic factors outweigh any neutral or negative
governance changes.

8. CAPITAL STRUCTURE

A. COMMON STOCK AUTHORIZATION

Votes on proposals to increase the number of shares of common stock
authorized for issuance are determined on a CASE-BY-CASE basis using a model
developed by ISS.

Vote AGAINST proposals at companies with dual-class capital structures to
increase the number of authorized shares of the class of stock that has
superior voting rights.

Vote FOR proposals to approve increases beyond the allowable increase when a
company's shares are in danger of being de-listed or if a company's ability to
continue to operate as a going concern is uncertain.

B. DUAL-CLASS STOCK

Vote AGAINST proposals to create a new class of common stock with superior
voting rights.

Vote FOR proposals to create a new class of non-voting or sub-voting common
stock if:

. It is intended for financing purposes with minimal or no dilution to
current shareholders

. It is not designed to preserve the voting power of an insider or
significant shareholder

9. EXECUTIVE AND DIRECTOR COMPENSATION

Votes with respect to compensation plans should be determined on a
CASE-BY-CASE basis. The ISS methodology for reviewing compensation plans
primarily focuses on the transfer of shareholder wealth (the dollar cost of pay
plans to shareholders instead of simply focusing on voting power dilution).
Using the expanded compensation data disclosed under the Securities and
Exchange Commission's rules, ISS will value every award type. ISS will include
in its analyses an estimated dollar cost for the proposed plan and all
continuing plans. This cost, dilution to shareholders' equity, will also be
expressed as a percentage figure for the transfer of shareholder wealth, and
will be considered along with dilution to voting power. Once ISS determines the
estimated cost of the plan, ISS compares it to a company-specific dilution cap.

Vote AGAINST equity plans that explicitly permit repricing or where the
company has a history of repricing without shareholder approval.

A. MANAGEMENT PROPOSALS SEEKING APPROVAL TO REPRICE OPTIONS

Votes on management proposals seeking approval to reprice options are
evaluated on a CASE-BY-CASE basis giving consideration to the following:

. Historic trading patterns

. Rationale for the repricing

. Value-for-value exchange

. Option vesting

. Term of the option

. Exercise price

. Participation

B. EMPLOYEE STOCK PURCHASE PLANS

Votes on employee stock purchase plans should be determined on a
CASE-BY-CASE basis.

Vote FOR employee stock purchase plans where all of the following apply:

. Purchase price is at least 85 percent of fair market value;

. Offering period is 27 months or less; and

. Potential voting power dilution is ten percent or less.

Vote AGAINST employee stock purchase plans where any of the opposite
conditions obtain.

C. SHAREHOLDER PROPOSALS ON COMPENSATION

Vote on a CASE-BY-CASE basis for all other shareholder proposals regarding
executive and director pay, taking into account company performance, pay level
versus peers, pay level versus industry, and long-term corporate outlook.

10. SOCIAL AND ENVIRONMENTAL ISSUES

These issues cover a wide range of topics, including consumer and public
safety, environment and energy, general corporate issues, labor standards and
human rights, military business, and workplace diversity.

In general, vote CASE-BY-CASE. While a wide variety of factors go into each
analysis, the overall principle guiding all vote recommendations focuses on how
the proposal will enhance the economic value of the company.

ISS 2007 US PROXY VOTING GUIDELINES
SUMMARY

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ISS is a trademark used herein under license.

ISS 2007 PROXY VOTING GUIDELINES SUMMARY
EFFECTIVE FOR MEETINGS FEB 1, 2007
UPDATED DECEMBER 15, 2006

The following is a condensed version of the proxy voting recommendations
contained in the ISS Proxy Voting Manual.

1. OPERATIONAL ITEMS................................................. 6
Adjourn Meeting................................................... 6
Amend Quorum Requirements......................................... 6
Amend Minor Bylaws................................................ 6
Auditor Indemnification and Limitation of Liability............... 6
Auditor Ratification.............................................. 6
Change Company Name............................................... 7
Change Date, Time, or Location of Annual Meeting.................. 7
Transact Other Business........................................... 7

2. BOARD OF DIRECTORS:............................................... 8
Voting on Director Nominees in Uncontested Elections.............. 8
2007 Classification of Directors.................................. 10
Age Limits........................................................ 11
Board Size........................................................ 11
Classification/Declassification of the Board...................... 12
Cumulative Voting................................................. 12
Director and Officer Indemnification and Liability Protection..... 12
Establish/Amend Nominee Qualifications............................ 13
Filling Vacancies/Removal of Directors............................ 13
Independent Chair (Separate Chair/CEO)............................ 13
Majority of Independent Directors/Establishment of Committees..... 14
Majority Vote Shareholder Proposals............................... 14
Office of the Board............................................... 14
Open Access....................................................... 15
Performance Test for Directors.................................... 15
Stock Ownership Requirements...................................... 16
Term Limits....................................................... 16

3. PROXY CONTESTS.................................................... 17
Voting for Director Nominees in Contested Elections............... 17
Reimbursing Proxy Solicitation Expenses........................... 17
Confidential Voting............................................... 17

4. ANTITAKEOVER DEFENSES AND VOTING RELATED ISSUES................... 18
Advance Notice Requirements for Shareholder Proposals/Nominations. 18
Amend Bylaws without Shareholder Consent.......................... 18
Poison Pills...................................................... 18
Shareholder Ability to Act by Written Consent..................... 18
Shareholder Ability to Call Special Meetings...................... 19
Supermajority Vote Requirements................................... 19

5. MERGERS AND CORPORATE RESTRUCTURINGS.............................. 20
Overall Approach.................................................... 20
Appraisal Rights.................................................. 20

Asset Purchases............................................................................ 20
Asset Sales................................................................................ 21
Bundled Proposals.......................................................................... 21
Conversion of Securities................................................................... 21
Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy Plans/Reverse Leveraged
Buyouts/Wrap Plans....................................................................... 21
Formation of Holding Company............................................................... 22
Going Private Transactions (LBOs, Minority Squeezeouts, and Going Dark).................... 22
Joint Ventures............................................................................. 22
Liquidations............................................................................... 23
Mergers and Acquisitions/Issuance of Shares to Facilitate Merger or Acquisition............ 23
Private Placements/Warrants/Convertible Debentures......................................... 23
Spinoffs................................................................................... 23
Value Maximization Proposals............................................................... 24

6. STATE OF INCORPORATION..................................................................... 25
Control Share Acquisition Provisions....................................................... 25
Control Share Cash-out Provisions.......................................................... 25
Disgorgement Provisions.................................................................... 25
Fair Price Provisions...................................................................... 25
Freeze-out Provisions...................................................................... 25
Greenmail.................................................................................. 26
Reincorporation Proposals.................................................................. 26
Stakeholder Provisions..................................................................... 26
State Antitakeover Statutes................................................................ 26

7. CAPITAL STRUCTURE.......................................................................... 27
Adjustments to Par Value of Common Stock................................................... 27
Common Stock Authorization................................................................. 27
Dual-Class Stock........................................................................... 27
Issue Stock for Use with Rights Plan....................................................... 27
Preemptive Rights.......................................................................... 27
Preferred Stock............................................................................ 28
Recapitalization........................................................................... 28
Reverse Stock Splits....................................................................... 28
Share Repurchase Programs.................................................................. 28
Stock Distributions: Splits and Dividends.................................................. 29
Tracking Stock............................................................................. 29

8. EXECUTIVE AND DIRECTOR COMPENSATION........................................................ 30
Equity Compensation Plans.................................................................... 30
Cost of Equity Plans....................................................................... 30
Repricing Provisions....................................................................... 30
Pay-for Performance Disconnect............................................................. 31
Three-Year Burn Rate/Burn Rate Commitment.................................................. 32
Poor Pay Practices......................................................................... 33
Specific Treatment of Certain Award Types in Equity Plan Evaluations:........................ 34
Dividend Equivalent Rights................................................................. 34
Liberal Share Recycling Provisions......................................................... 34
Other Compensation Proposals and Policies.................................................... 34
401(k) Employee Benefit Plans.............................................................. 34
Director Compensation...................................................................... 34

Director Retirement Plans................................................................... 35
Employee Stock Ownership Plans (ESOPs)...................................................... 35
Employee Stock Purchase Plans--Qualified Plans.............................................. 35
Employee Stock Purchase Plans--Non-Qualified Plans.......................................... 35
Incentive Bonus Plans and Tax Deductibility Proposals (OBRA-Related Compensation Proposals). 36
Options Backdating.......................................................................... 36
Option Exchange Programs/Repricing Options.................................................. 36
Stock Plans in Lieu of Cash................................................................. 37
Transfer Programs of Stock Options.......................................................... 37
Shareholder Proposals on Compensation......................................................... 38
Advisory Vote on Executive Compensation (Say-on-Pay)........................................ 38
Compensation Consultants-Disclosure of Board or Company's Utilization....................... 38
Disclosure/Setting Levels or Types of Compensation for Executives and Directors............. 38
Option Repricing............................................................................ 38
Pay for Superior Performance................................................................ 38
Pension Plan Income Accounting.............................................................. 39
Performance-Based Awards.................................................................... 39
Severance Agreements for Executives/Golden Parachutes....................................... 39
Supplemental Executive Retirement Plans (SERPs)............................................. 40

9. CORPORATE RESPONSIBILITY.................................................................... 41
Consumer Issues and Public Safety............................................................. 41
Animal Rights............................................................................... 41
Drug Pricing................................................................................ 41
Drug Reimportation.......................................................................... 41
Genetically Modified Foods.................................................................. 41
Handguns.................................................................................... 42
HIV/AIDS.................................................................................... 42
Predatory Lending........................................................................... 43
Tobacco..................................................................................... 43
Toxic Chemicals............................................................................. 44
Environment and Energy........................................................................ 44
Arctic National Wildlife Refuge............................................................. 44
CERES Principles............................................................................ 44
Climate Change.............................................................................. 44
Concentrated Area Feeding Operations (CAFOs)................................................ 45
Environmental-Economic Risk Report.......................................................... 45
Environmental Reports....................................................................... 45
Global Warming.............................................................................. 45
Kyoto Protocol Compliance................................................................... 45
Land Use.................................................................................... 46
Nuclear Safety.............................................................................. 46
Operations in Protected Areas............................................................... 46
Recycling................................................................................... 46
Renewable Energy............................................................................ 46
Sustainability Report....................................................................... 47
General Corporate Issues...................................................................... 47
Charitable/Political Contributions.......................................................... 47
Disclosure of Lobbying Expenditures/Initiatives............................................. 47
Link Executive Compensation to Social Performance........................................... 48
Outsourcing/Offshoring...................................................................... 48

Labor Standards and Human Rights......................................................... 48
China Principles....................................................................... 48
Country-specific Human Rights Reports.................................................. 48
International Codes of Conduct/Vendor Standards........................................ 49
MacBride Principles.................................................................... 49
Military Business........................................................................ 50
Foreign Military Sales/Offsets......................................................... 50
Landmines and Cluster Bombs............................................................ 50
Nuclear Weapons........................................................................ 50
Operations in Nations Sponsoring Terrorism (e.g., Iran)................................ 50
Spaced-Based Weaponization............................................................. 50
Workplace Diversity...................................................................... 51
Board Diversity........................................................................ 51
Equal Employment Opportunity (EEO)..................................................... 51
Glass Ceiling.......................................................................... 51
Sexual Orientation..................................................................... 52

10. MUTUAL FUND PROXIES................................................................... 53
Election of Directors.................................................................. 53
Converting Closed-end Fund to Open-end Fund............................................ 53
Proxy Contests......................................................................... 53
Investment Advisory Agreements......................................................... 53
Approving New Classes or Series of Shares.............................................. 53
Preferred Stock Proposals.............................................................. 54
1940 Act Policies...................................................................... 54
Changing a Fundamental Restriction to a Nonfundamental Restriction..................... 54
Change Fundamental Investment Objective to Nonfundamental.............................. 54
Name Change Proposals.................................................................. 54
Change in Fund's Subclassification..................................................... 54
Disposition of Assets/Termination/Liquidation.......................................... 55
Changes to the Charter Document........................................................ 55
Changing the Domicile of a Fund........................................................ 55
Authorizing the Board to Hire and Terminate Subadvisors Without Shareholder Approval .. 55
Distribution Agreements................................................................ 56
Master-Feeder Structure................................................................ 56
Mergers................................................................................ 56
Shareholder Proposals for Mutual Funds................................................... 56
Establish Director Ownership Requirement............................................... 56
Reimburse Shareholder for Expenses Incurred............................................ 56
Terminate the Investment Advisor....................................................... 56

1. OPERATIONAL ITEMS

ADJOURN MEETING

Generally vote AGAINST proposals to provide management with the authority to
adjourn an annual or special meeting absent compelling reasons to support the
proposal.

Vote FOR proposals that relate specifically to soliciting votes for a merger
or transaction if supporting that merger or transaction. Vote AGAINST proposals
if the wording is too vague or if the proposal includes "other business."

AMEND QUORUM REQUIREMENTS

Vote AGAINST proposals to reduce quorum requirements for shareholder
meetings below a majority of the shares outstanding unless there are compelling
reasons to support the proposal.

AMEND MINOR BYLAWS

Vote FOR bylaw or charter changes that are of a housekeeping nature (updates
or corrections).

AUDITOR INDEMNIFICATION AND LIMITATION OF LIABILITY

Consider the issue of auditor indemnification and limitation of liability on
a CASE-BY-CASE basis. Factors to be assessed include, but are not limited to:

. The terms of the auditor agreement- the degree to which these agreements
impact shareholders' rights;

. Motivation and rationale for establishing the agreements;

. Quality of disclosure; and

. Historical practices in the audit area.

WTHHOLD against members of an audit committee in situations where there is
persuasive evidence that the audit committee entered into an inappropriate
indemnification agreement with its auditor that limits the ability of the
company, or its shareholders, to pursue legitimate legal recourse against the
audit firm.

AUDITOR RATIFICATION

Vote FOR proposals to ratify auditors, unless any of the following apply:

. An auditor has a financial interest in or association with the company,
and is therefore not independent,

. There is reason to believe that the independent auditor has rendered an
opinion which is neither accurate nor indicative of the company's
financial position, or

. Fees for non-audit services ("Other" fees) are excessive.

Non-audit fees are excessive if:

Non-audit ("other") fees > audit fees + audit-related fees + tax
compliance/preparation fees

Tax compliance and preparation include the preparation of original and
amended tax returns, refund claims and tax payment planning. All other services
in the tax category, such as tax advice, planning or consulting should be added
to "Other" fees. If the breakout of tax fees cannot be determined, add all tax
fees to "Other" fees.

Vote CASE-BY-CASE on shareholder proposals asking companies to prohibit or
limit their auditors from engaging in non-audit services.

Vote CASE-BY-CASE on shareholder proposals asking for audit firm rotation,
taking into account:

. The tenure of the audit firm;

. The length of rotation specified in the proposal;

. Any significant audit-related issues at the company;

. The number of Audit Committee meetings held each year;

. The number of financial experts serving on the committee; and

. Whether the company has a periodic renewal process where the auditor is
evaluated for both audit quality and competitive price.

CHANGE COMPANY NAME

Vote FOR proposals to change the corporate name.

CHANGE DATE, TIME, OR LOCATION OF ANNUAL MEETING

Vote FOR management proposals to change the date, time, and/or location of
the annual meeting unless the proposed change is unreasonable.

Vote AGAINST shareholder proposals to change the date, time, and/or location
of the annual meeting unless the current scheduling or location is unreasonable.

TRANSACT OTHER BUSINESS

Vote AGAINST proposals to approve other business when it appears as voting
item.

2. BOARD OF DIRECTORS:

VOTING ON DIRECTOR NOMINEES IN UNCONTESTED ELECTIONS

Vote CASE-BY-CASE on director nominees, examining, but not limited to, the
following factors:

. Composition of the board and key board committees;

. Attendance at board and committee meetings;

. Corporate governance provisions and takeover activity;

. Disclosures under Section 404 of Sarbanes-Oxley Act;

. Long-term company performance relative to a market and peer index;

. Extent of the director's investment in the company;

. Existence of related party transactions;

. Whether the chairman is also serving as CEO;

. Whether a retired CEO sits on the board;

. Number of outside boards at which a director serves;

. Majority vote standard for director elections without a provision to
allow for plurality voting when there are more nominees than seats.

WITHHOLD from individual directors who:

. Attend less than 75 percent of the board and committee meetings without
a valid excuse (such as illness, service to the nation, work on behalf
of the company);

. Sit on more than six public company boards;

. Are CEOs of public companies who sit on the boards of more than two
public companies besides their own--withhold only at their outside
boards.

WITHHOLD from the entire board of directors, (except from new nominees, who
should be considered on a CASE-BY-CASE basis) if:

. The company's proxy indicates that not all directors attended 75% of the
aggregate of their board and committee meetings, but fails to provide
the required disclosure of the names of the directors involved. If this
information cannot be obtained, withhold from all incumbent directors;

. The company's poison pill has a dead-hand or modified dead-hand feature.
Withhold every year until this feature is removed;

. The board adopts or renews a poison pill without shareholder approval
since the beginning of 2005, does not commit to putting it to
shareholder vote within 12 months of adoption, or reneges on a
commitment to put the pill to a vote, and has not yet received a
withhold recommendation for this issue;

. The board failed to act on a shareholder proposal that received approval
by a majority of the shares outstanding the previous year;

. The board failed to act on a shareholder proposal that received approval
of the majority of shares cast for the previous two consecutive years;

. The board failed to act on takeover offers where the majority of the
shareholders tendered their shares;

. At the previous board election, any director received more than 50
percent withhold votes of the shares cast and the company has failed to
address the issue(s) that caused the high withhold rate;

. The company is a Russell 3000 company that underperformed its industry
group (GICS group) under the criteria discussed in the section
"Performance Test for Directors".

WITHHOLD from Inside Directors and Affiliated Outside Directors (per the
Classification of Directors below) when:

. The inside or affiliated outside director serves on any of the three key
committees: audit, compensation, or nominating;

. The company lacks an audit, compensation, or nominating committee so
that the full board functions as that committee;

. The company lacks a formal nominating committee, even if board attests
that the independent directors fulfill the functions of such a committee;

. The full board is less than majority independent.

WITHHOLD from the members of the Audit Committee if:

. The non-audit fees paid to the auditor are excessive (see discussion
under Auditor Ratification);

. A material weakness identified in the Section 404 Sarbanes-Oxley Act
disclosures rises to a level of serious concern; there are chronic
internal control issues and an absence of established effective control
mechanisms;

. There is persuasive evidence that the audit committee entered into an
inappropriate indemnification agreement with its auditor that limits the
ability of the company, or its shareholders, to pursue legitimate legal
recourse against the audit firm.

WITHHOLD from the members of the Compensation Committee if:

. There is a negative correlation between the chief executive's pay and
company performance (see discussion under Equity Compensation Plans);

. The company reprices underwater options for stock, cash or other
consideration without prior shareholder approval, even if allowed in
their equity plan;

. The company fails to submit one-time transfers of stock options to a
shareholder vote;

. The company fails to fulfill the terms of a burn rate commitment they
made to shareholders;

. The company has backdated options (see "Options Backdating" policy);

. The company has poor compensation practices (see "Poor Pay Practices"
policy). Poor pay practices may warrant withholding votes from the CEO
and potentially the entire board as well.

WITHHOLD from directors, individually or the entire board, for egregious
actions or failure to replace management as appropriate.

2007 CLASSIFICATION OF DIRECTORS

INSIDE DIRECTOR (I)

. Employee of the company or one of its affiliates/1/;

. Non-employee officer of the company if among the five most highly paid
individuals (excluding interim CEO);

. Listed as a Section 16 officer/2/;

. Current interim CEO;

. Beneficial owner of more than 50 percent of the company's voting power
(this may be aggregated if voting power is distributed among more than
one member of a defined group).

AFFILIATED OUTSIDE DIRECTOR (AO)

. Board attestation that an outside director is not independent;

. Former CEO of the company;

. Former CEO of an acquired company within the past five years;

. Former interim CEO if the service was longer than 18 months. If the
service was between twelve and eighteen months an assessment of the
interim CEO's employment agreement will be made;/3/

. Former executive/2/ of the company, an affiliate or an acquired firm
within the past five years;

. Executive/2 /of a former parent or predecessor firm at the time the
company was sold or split off from the parent/predecessor within the
past five years;

. Executive, former executive, general or limited partner of a joint
venture or partnership with the company;

. Relative/4/ of a current Section 16 officer of company or its affiliates;

. Relative/4/ of a current employee of company or its affiliates where
additional factors raise concern (which may include, but are not limited
to, the following: a director related to numerous employees; the company
or its affiliates employ relatives of numerous board members; or a
non-Section 16 officer in a key strategic role);

- - --------
FOOTNOTES:

/1/ "Affiliate" includes a subsidiary, sibling company, or parent company. ISS
uses 50 percent control ownership by the parent company as the standard
for applying its affiliate designation.
/2/ "Executives" (officers subject to Section 16 of the Securities and
Exchange Act of 1934) include the chief executive, operating, financial,
legal, technology, and accounting officers of a company (including the
president, treasurer, secretary, controller, or any vice president in
charge of a principal business unit, division or policy function).
/3/ ISS will look at the terms of the interim CEO's employment contract to
determine if it contains severance pay, long-term health and pension
benefits or other such standard provisions typically contained in
contracts of permanent, non-temporary CEOs. ISS will also consider if a
formal search process was underway for a full-time CEO at the time.
/4/ "Relative" follows the SEC's new definition of "immediate family members"
which covers spouses, parents, children, step-parents, step-children,
siblings, in-laws, and any person (other than a tenant or employee)
sharing the household of any director, nominee for director, executive
officer, or significant shareholder of the company.

. Relative/4/ of former Section 16 officer, of company or its affiliate
within the last five years;

. Currently provides (or a relative/4/ provides) professional services/5/
to the company, to an affiliate of the company or an individual officer
of the company or one of its affiliates in excess of $10,000 per year;

. Employed by (or a relative/4/ is employed by) a significant customer or
supplier/6/;

. Has (or a relative/4/ has) any transactional relationship with the
company or its affiliates excluding investments in the company through a
private placement;/6/

. Any material financial tie or other related party transactional
relationship to the company;

. Party to a voting agreement to vote in line with management on proposals
being brought to shareholder vote;

. Has (or a relative/4 /has) an interlocking relationship as defined by
the SEC involving members of the board of directors or its Compensation
and Stock Option Committee;/7/

. Founder/8/ of the company but not currently an employee;

. Is (or a relative/4 /is) a trustee, director or employee of a charitable
or non-profit organization that receives grants or endowments/6/ from
the company or its affiliates/1/.

INDEPENDENT OUTSIDE DIRECTOR (IO)

. No material/9/ connection to the company other than a board seat.

AGE LIMITS

Vote AGAINST shareholder or management proposals to limit the tenure of
outside directors through mandatory retirement ages.

BOARD SIZE

Vote FOR proposals seeking to fix the board size or designate a range for
the board size.

- - --------
FOOTNOTES:

/5/ Professional services can be characterized as advisory in nature and
generally include the following: investment banking/financial advisory
services; commercial banking (beyond deposit services); investment
services; insurance services; accounting/audit services; consulting
services; marketing services; and legal services. The case of
participation in a banking syndicate by a non-lead bank should be
considered a transaction (and hence subject to the associated materiality
test) rather than a professional relationship.
/6/ If the company makes or receives annual payments exceeding the greater of
$200,000 or five percent of the recipient's gross revenues. (The recipient
is the party receiving the financial proceeds from the transaction).
/7/ Interlocks include: (a) executive officers serving as directors on each
other's compensation or similar committees (or, in the absence of such a
committee, on the board) or (b) executive officers sitting on each other's
boards and at least one serves on the other's compensation or similar
committees (or, in the absence of such a committee, on the board).
/8/ The operating involvement of the Founder with the company will be
considered. Little to no operating involvement may cause ISS to deem the
Founder as an independent outsider.
/9/ For purposes of ISS' director independence classification, "material" will
be defined as a standard of relationship (financial, personal or
otherwise) that a reasonable person might conclude could potentially
influence one's objectivity in the boardroom in a manner that would have a
meaningful impact on an individual's ability to satisfy requisite
fiduciary standards on behalf of shareholders.

Vote AGAINST proposals that give management the ability to alter the size of
the board outside of a specified range without shareholder approval.

CLASSIFICATION/DECLASSIFICATION OF THE BOARD

Vote AGAINST proposals to classify the board.

Vote FOR proposals to repeal classified boards and to elect all directors
annually.

CUMULATIVE VOTING

Generally vote AGAINST proposals to eliminate cumulative voting.

Generally vote FOR proposals to restore or provide for cumulative voting
unless the company meets ALL of the following criteria:

. Majority vote standard in director elections, including a carve-out for
plurality voting in contested situations;

. Annually elected board;

. Two-thirds of the board composed of independent directors;

. Nominating committee composed solely of independent directors;

. Confidential voting; however, there may be a provision for suspending
confidential voting during proxy contests;

. Ability of shareholders to call special meetings or act by written
consent with 90 days' notice;

. Absence of superior voting rights for one or more classes of stock;

. Board does not have the right to change the size of the board beyond a
stated range that has been approved by shareholders;

. The company has not under-performed its both industry peers and index on
both a one-year and three-year total shareholder returns basis*, unless
there has been a change in the CEO position within the last three years;
and

. No director received a WITHHOLD vote level of 35% or more of the votes
cast in the previous election.
- - --------
* Starting in 2007, the industry peer group used for this evaluation will
change from the 4-digit GICS group to the average of the 12 companies in the
same 6-digit GICS group that are closest in revenue to the company. To fail,
the company must under-perform its index and industry group on all 4
measures (1 and 3 year on industry peers and index).

DIRECTOR AND OFFICER INDEMNIFICATION AND LIABILITY PROTECTION

Vote CASE-BY-CASE on proposals on director and officer indemnification and
liability protection using Delaware law as the standard.

Vote AGAINST proposals to eliminate entirely directors' and officers'
liability for monetary damages for violating the duty of care.

Vote AGAINST indemnification proposals that would expand coverage beyond
just legal expenses to liability for acts, such as negligence, that are more
serious violations of fiduciary obligation than mere carelessness.

Vote AGAINST proposals that would expand the scope of indemnification to
provide for mandatory indemnification of company officials in connection with
acts that previously the company was permitted to provide indemnification for
at the discretion of the company's board (i.e. "permissive indemnification")
but that previously the company was not required to indemnify.

Vote FOR only those proposals providing such expanded coverage in cases when
a director's or officer's legal defense was unsuccessful if both of the
following apply:

. If the director was found to have acted in good faith and in a manner
that he reasonably believed was in the best interests of the company; and

. If only the director's legal expenses would be covered.

ESTABLISH/AMEND NOMINEE QUALIFICATIONS

Vote CASE-BY-CASE on proposals that establish or amend director
qualifications. Votes should be based on how reasonable the criteria are and to
what degree they may preclude dissident nominees from joining the board.

Vote AGAINST shareholder proposals requiring two candidates per board seat.

FILLING VACANCIES/REMOVAL OF DIRECTORS

Vote AGAINST proposals that provide that directors may be removed only for
cause.

Vote FOR proposals to restore shareholders' ability to remove directors with
or without cause.

Vote AGAINST proposals that provide that only continuing directors may elect
replacements to fill board vacancies.

Vote FOR proposals that permit shareholders to elect directors to fill board
vacancies.

INDEPENDENT CHAIR (SEPARATE CHAIR/CEO)

Generally vote FOR shareholder proposals requiring the position of chair be
filled by an independent director unless there are compelling reasons to
recommend against the proposal, such as a counterbalancing governance
structure. This should include all of the following:

. Designated lead director, elected by and from the independent board
members with clearly delineated and comprehensive duties. (The role may
alternatively reside with a presiding director, vice chairman, or
rotating lead director; however the director must serve a minimum of one
year in order to qualify as a lead director.) At a minimum these should
include:

- Presides at all meetings of the board at which the chairman is not
present, including executive sessions of the independent directors,

- Serves as liaison between the chairman and the independent directors,

- Approves information sent to the board,

- Approves meeting agendas for the board,

- Approves meetings schedules to assure that there is sufficient time
for discussion of all agenda items,

- Has the authority to call meetings of the independent directors,

- If requested by major shareholders, ensures that he is available for
consultation and direct communication;

. Two-thirds independent board;

. All-independent key committees;

. Established governance guidelines;

. The company should not have underperformed both its industry peers and
index on both a one-year and three-year total shareholder returns
basis*, unless there has been a change in the Chairman/CEO position
within that time;

. The company does not have any problematic governance issues.
- - --------
* Starting in 2007, the industry peer group used for this evaluation will
change from the 4-digit GICS group to the average of the 12 companies in the
same 6-digit GICS group that are closest in revenue to the company. To fail,
the company must under-perform its index and industry group on all 4
measures (1 and 3 year on industry peers and index).

MAJORITY OF INDEPENDENT DIRECTORS/ESTABLISHMENT OF COMMITTEES

Vote FOR shareholder proposals asking that a majority or more of directors
be independent unless the board composition already meets the proposed
threshold by ISS' definition of independent outsider. (See Classification of
Directors.)

Vote FOR shareholder proposals asking that board audit, compensation, and/or
nominating committees be composed exclusively of independent directors if they
currently do not meet that standard.

MAJORITY VOTE SHAREHOLDER PROPOSALS

Generally vote FOR precatory and binding resolutions requesting that the
board change the company's bylaws to stipulate that directors need to be
elected with an affirmative majority of votes cast, provided it does not
conflict with the state law where the company is incorporated. Binding
resolutions need to allow for a carve-out for a plurality vote standard when
there are more nominees than board seats.

Companies are strongly encouraged to also adopt a post-election policy (also
know as a director resignation policy) that will provide guidelines so that the
company will promptly address the situation of a holdover director.

OFFICE OF THE BOARD

Generally vote FOR shareholders proposals requesting that the board
establish an Office of the Board of Directors in order to facilitate direct
communications between shareholders and non-management directors, unless the
company has all of the following:

. Established a communication structure that goes beyond the exchange
requirements to facilitate the exchange of information between
shareholders and members of the board;

. Effectively disclosed information with respect to this structure to its
shareholders;

. Company has not ignored majority-supported shareholder proposals or a
majority withhold vote on a director nominee; and

. The company has an independent chairman or a lead/presiding director,
according to ISS' definition. This individual must be made available for
periodic consultation and direct communication with major shareholders.

OPEN ACCESS

Generally vote FOR reasonably crafted shareholder proposals providing
shareholders with the ability to nominate director candidates to be included on
management's proxy card, provided the proposal substantially mirrors the SEC's
proposed two-trigger formulation (see the proposed "Security Holder Director
Nominations" rule (http://www.sec.gov/rules/proposed/34-48626.htm) or ISS'
comment letter to the SEC dated 6/13/2003, available on ISS website under
Governance Center-ISS Position Papers).

PERFORMANCE TEST FOR DIRECTORS

WITHHOLD from directors of Russell 3000 companies that underperformed
relative to their industry peers. The criterion used to evaluate such
underperformance is a combination of four performance measures:

One measurement will be a market-based performance metric and three
measurements will be tied to the company's operational performance. The market
performance metric in the methodology is five-year Total Shareholder Return
(TSR) on a relative basis within each four-digit GICS group. The three
operational performance metrics are sales growth, EBITDA growth, and pre-tax
operating Return on Invested Capital (ROIC) on a relative basis within each
four-digit GICS group. All four metrics will be time-weighted as follows: 40
percent on the trailing 12 month period and 60 percent on the 48 month period
prior to the trailing 12 months. This methodology emphasizes the company's
historical performance over a five-year period yet also accounts for near-term
changes in a company's performance.

The table below summarizes the new framework:

METRICS BASIS OF EVALUATION WEIGHTING 2/ND/ WEIGHTING
- - ------- ------------------- --------- -------------

OPERATIONAL PERFORMANCE.............. 50%
5-YEAR AVERAGE PRE-TAX OPERATING ROIC MANAGEMENT 33.3%
EFFICIENCY IN
DEPLOYING ASSETS
5-YEAR SALES GROWTH.................. TOP-LINE 33.3%
5-YEAR EBITDA GROWTH................. CORE-EARNINGS 33.3%
----
SUB TOTAL............................ 100%
====

STOCK PERFORMANCE.................... 50%
5-YEAR TSR........................... MARKET
---
TOTAL................................ 100%
===

Adopt a two-phased approach. In 2007 (YEAR 1), the worst performers (bottom
five percent) within each of the 24 GICS groups will automatically receive
cautionary language, except for companies that have already received cautionary
language or withhold votes in 2006 under the current policy. The latter may be
subject to withhold votes in 2007. For 2008 (YEAR 2), WITHHOLD votes from
director nominees if a company continues to

be in the bottom five percent within its GICS group for that respective year
and/or shows no improvement in its most recent trailing 12 months operating and
market performance relative to its peers in its GICS group. This policy would
be applied on a rolling basis going forward.

STOCK OWNERSHIP REQUIREMENTS

Generally vote AGAINST shareholder proposals that mandate a minimum amount
of stock that directors must own in order to qualify as a director or to remain
on the board. While stock ownership on the part of directors is desired, the
company should determine the appropriate ownership requirement.

Vote CASE-BY-CASE on shareholder proposals asking that the company adopt a
holding or retention period for its executives (for holding stock after the
vesting or exercise of equity awards), taking into account any stock ownership
requirements or holding period/retention ratio already in place and the actual
ownership level of executives.

TERM LIMITS

Vote AGAINST shareholder or management proposals to limit the tenure of
outside directors through term limits. However, scrutinize boards where the
average tenure of all directors exceeds 15 years for independence from
management and for sufficient turnover to ensure that new perspectives are
being added to the board.

3. PROXY CONTESTS

VOTING FOR DIRECTOR NOMINEES IN CONTESTED ELECTIONS

Vote CASE-BY-CASE on the election of directors in contested elections,
considering the following factors:

. Long-term financial performance of the target company relative to its
industry;

. Management's track record;

. Background to the proxy contest;

. Qualifications of director nominees (both slates);

. Strategic plan of dissident slate and quality of critique against
management;

. Likelihood that the proposed goals and objectives can be achieved (both
slates);

. Stock ownership positions.

REIMBURSING PROXY SOLICITATION EXPENSES

Vote CASE-BY-CASE on proposals to reimburse proxy solicitation expenses.
When voting in conjunction with support of a dissident slate, vote FOR the
reimbursement of all appropriate proxy solicitation expenses associated with
the election.

CONFIDENTIAL VOTING

Vote FOR shareholder proposals requesting that corporations adopt
confidential voting, use independent vote tabulators, and use independent
inspectors of election, as long as the proposal includes a provision for proxy
contests as follows: In the case of a contested election, management should be
permitted to request that the dissident group honor its confidential voting
policy. If the dissidents agree, the policy remains in place. If the dissidents
will not agree, the confidential voting policy is waived.

Vote FOR management proposals to adopt confidential voting.

4. ANTITAKEOVER DEFENSES AND VOTING RELATED ISSUES

ADVANCE NOTICE REQUIREMENTS FOR SHAREHOLDER PROPOSALS/NOMINATIONS

Vote CASE-BY-CASE on advance notice proposals, supporting those proposals
which allow shareholders to submit proposals as close to the meeting date as
reasonably possible and within the broadest window possible.

AMEND BYLAWS WITHOUT SHAREHOLDER CONSENT

Vote AGAINST proposals giving the board exclusive authority to amend the
bylaws.

Vote FOR proposals giving the board the ability to amend the bylaws in
addition to shareholders.

POISON PILLS

Vote FOR shareholder proposals requesting that the company submit its poison
pill to a shareholder vote or redeem it UNLESS the company has: (1) A
shareholder approved poison pill in place; or (2) The company has adopted a
policy concerning the adoption of a pill in the future specifying that the
board will only adopt a shareholder rights plan if either:

. Shareholders have approved the adoption of the plan; or

. The board, in its exercise of its fiduciary responsibilities, determines
that it is in the best interest of shareholders under the circumstances
to adopt a pill without the delay in adoption that would result from
seeking stockholder approval (i.e. the "fiduciary out" provision). A
poison pill adopted under this fiduciary out will be put to a
shareholder ratification vote within twelve months of adoption or
expire. If the pill is not approved by a majority of the votes cast on
this issue, the plan will immediately terminate.

Vote FOR shareholder proposals calling for poison pills to be put to a vote
within a time period of less than one year after adoption. If the company has
no non-shareholder approved poison pill in place and has adopted a policy with
the provisions outlined above, vote AGAINST the proposal. If these conditions
are not met, vote FOR the proposal, but with the caveat that a vote within
twelve months would be considered sufficient.

Vote CASE-by-CASE on management proposals on poison pill ratification,
focusing on the features of the shareholder rights plan. Rights plans should
contain the following attributes:

. No lower than a 20% trigger, flip-in or flip-over;

. A term of no more than three years;

. No dead-hand, slow-hand, no-hand or similar feature that limits the
ability of a future board to redeem the pill;

. Shareholder redemption feature (qualifying offer clause); if the board
refuses to redeem the pill 90 days after a qualifying offer is
announced, ten percent of the shares may call a special meeting or seek
a written consent to vote on rescinding the pill.

SHAREHOLDER ABILITY TO ACT BY WRITTEN CONSENT

Vote AGAINST proposals to restrict or prohibit shareholder ability to take
action by written consent.

Vote FOR proposals to allow or make easier shareholder action by written
consent.

SHAREHOLDER ABILITY TO CALL SPECIAL MEETINGS

Vote AGAINST proposals to restrict or prohibit shareholder ability to call
special meetings.

Vote FOR proposals that remove restrictions on the right of shareholders to
act independently of management.

SUPERMAJORITY VOTE REQUIREMENTS

Vote AGAINST proposals to require a supermajority shareholder vote.

Vote FOR proposals to lower supermajority vote requirements.

5. MERGERS AND CORPORATE RESTRUCTURINGS

OVERALL APPROACH

For mergers and acquisitions, review and evaluate the merits and drawbacks
of the proposed transaction, balancing various and sometimes countervailing
factors including:

. VALUATION--Is the value to be received by the target shareholders (or
paid by the acquirer) reasonable? While the fairness opinion may provide
an initial starting point for assessing valuation reasonableness,
emphasis is placed on the offer premium, market reaction and strategic
rationale.

. MARKET REACTION--How has the market responded to the proposed deal? A
negative market reaction should cause closer scrutiny of a deal.

. STRATEGIC RATIONALE--Does the deal make sense strategically? From where
is the value derived? Cost and revenue synergies should not be overly
aggressive or optimistic, but reasonably achievable. Management should
also have a favorable track record of successful integration of
historical acquisitions.

. NEGOTIATIONS AND PROCESS--Were the terms of the transaction negotiated
at arm's-length? Was the process fair and equitable? A fair process
helps to ensure the best price for shareholders. Significant negotiation
"wins" can also signify the deal makers' competency. The
comprehensiveness of the sales process (e.g., full auction, partial
auction, no auction) can also affect shareholder value.

. CONFLICTS OF INTEREST--Are insiders benefiting from the transaction
disproportionately and inappropriately as compared to non-insider
shareholders? As the result of potential conflicts, the directors and
officers of the company may be more likely to vote to approve a merger
than if they did not hold these interests. Consider whether these
interests may have influenced these directors and officers to support or
recommend the merger. The CIC figure presented in the "ISS Transaction
Summary" section of this report is an aggregate figure that can in
certain cases be a misleading indicator of the true value transfer from
shareholders to insiders. Where such figure appears to be excessive,
analyze the underlying assumptions to determine whether a potential
conflict exists.

. GOVERNANCE--Will the combined company have a better or worse governance
profile than the current governance profiles of the respective parties
to the transaction? If the governance profile is to change for the
worse, the burden is on the company to prove that other issues (such as
valuation) outweigh any deterioration in governance.

APPRAISAL RIGHTS

Vote FOR proposals to restore, or provide shareholders with, rights of
appraisal.

ASSET PURCHASES

Vote CASE-BY-CASE on asset purchase proposals, considering the following
factors:

. Purchase price;

. Fairness opinion;

. Financial and strategic benefits;

. How the deal was negotiated;

. Conflicts of interest;

. Other alternatives for the business;

. Non-completion risk.

ASSET SALES

Vote CASE-BY-CASE on asset sales, considering the following factors:

. Impact on the balance sheet/working capital;

. Potential elimination of diseconomies;

. Anticipated financial and operating benefits;

. Anticipated use of funds;

. Value received for the asset;

. Fairness opinion;

. How the deal was negotiated;

. Conflicts of interest.

BUNDLED PROPOSALS

Vote CASE-BY-CASE on bundled or "conditional" proxy proposals. In the case
of items that are conditioned upon each other, examine the benefits and costs
of the packaged items. In instances when the joint effect of the conditioned
items is not in shareholders' best interests, vote AGAINST the proposals. If
the combined effect is positive, support such proposals.

CONVERSION OF SECURITIES

Vote CASE-BY-CASE on proposals regarding conversion of securities. When
evaluating these proposals the investor should review the dilution to existing
shareholders, the conversion price relative to market value, financial issues,
control issues, termination penalties, and conflicts of interest.

Vote FOR the conversion if it is expected that the company will be subject
to onerous penalties or will be forced to file for bankruptcy if the
transaction is not approved.

CORPORATE REORGANIZATION/DEBT RESTRUCTURING/PREPACKAGED BANKRUPTCY
PLANS/REVERSE LEVERAGED BUYOUTS/WRAP PLANS

Vote CASE-BY-CASE on proposals to increase common and/or preferred shares
and to issue shares as part of a debt restructuring plan, taking into
consideration the following:

. Dilution to existing shareholders' position;

. Terms of the offer;

. Financial issues;

. Management's efforts to pursue other alternatives;

. Control issues;

. Conflicts of interest.

Vote FOR the debt restructuring if it is expected that the company will file
for bankruptcy if the transaction is not approved.

FORMATION OF HOLDING COMPANY

Vote CASE-BY-CASE on proposals regarding the formation of a holding company,
taking into consideration the following:

. The reasons for the change;

. Any financial or tax benefits;

. Regulatory benefits;

. Increases in capital structure;

. Changes to the articles of incorporation or bylaws of the company.

Absent compelling financial reasons to recommend the transaction, vote
AGAINST the formation of a holding company if the transaction would include
either of the following:

. Increases in common or preferred stock in excess of the allowable
maximum (see discussion under "Capital Structure");

. Adverse changes in shareholder rights.

GOING PRIVATE TRANSACTIONS (LBOS, MINORITY SQUEEZEOUTS, AND GOING DARK)

Vote CASE-BY-CASE on going private transactions, taking into account the
following:

. Offer price/premium;

. Fairness opinion;

. How the deal was negotiated;

. Conflicts of interest;

. Other alternatives/offers considered; and

. Non-completion risk.

Vote CASE-BY-CASE on "going dark" transactions, determining whether the
transaction enhances shareholder value by taking into consideration:

. Whether the company has attained benefits from being publicly-traded
(examination of trading volume, liquidity, and market research of the
stock);

. Cash-out value;

. Whether the interests of continuing and cashed-out shareholders are
balanced; and

. The market reaction to public announcement of transaction.

JOINT VENTURES

Vote CASE-BY-CASE on proposals to form joint ventures, taking into account
the following:

. Percentage of assets/business contributed;

. Percentage ownership;

. Financial and strategic benefits;

. Governance structure;

. Conflicts of interest;

. Other alternatives;

. Noncompletion risk.

LIQUIDATIONS

Vote CASE-BY-CASE on liquidations, taking into account the following:

. Management's efforts to pursue other alternatives;

. Appraisal value of assets; and

. The compensation plan for executives managing the liquidation.

Vote FOR the liquidation if the company will file for bankruptcy if the
proposal is not approved.

MERGERS AND ACQUISITIONS/ ISSUANCE OF SHARES TO FACILITATE MERGER OR ACQUISITION

Vote CASE-BY-CASE on mergers and acquisitions, determining whether the
transaction enhances shareholder value by giving consideration to items listed
under "Mergers and Corporate Restructurings: Overall Approach."

PRIVATE PLACEMENTS/WARRANTS/CONVERTIBLE DEBENTURES

Vote CASE-BY-CASE on proposals regarding private placements, taking into
consideration:

. Dilution to existing shareholders' position;

. Terms of the offer;

. Financial issues;

. Management's efforts to pursue other alternatives;

. Control issues;

. Conflicts of interest.

Vote FOR the private placement if it is expected that the company will file
for bankruptcy if the transaction is not approved.

SPINOFFS

Vote CASE-BY-CASE on spin-offs, considering:

. Tax and regulatory advantages;

. Planned use of the sale proceeds;

. Valuation of spinoff;

. Fairness opinion;

. Benefits to the parent company;

. Conflicts of interest;

. Managerial incentives;

. Corporate governance changes;

. Changes in the capital structure.

VALUE MAXIMIZATION PROPOSALS

Vote CASE-BY-CASE on shareholder proposals seeking to maximize shareholder
value by hiring a financial advisor to explore strategic alternatives, selling
the company or liquidating the company and distributing the proceeds to
shareholders. These proposals should be evaluated based on the following
factors:

. Prolonged poor performance with no turnaround in sight;

. Signs of entrenched board and management;

. Strategic plan in place for improving value;

. Likelihood of receiving reasonable value in a sale or dissolution; and

. Whether company is actively exploring its strategic options, including
retaining a financial advisor.

6. STATE OF INCORPORATION

CONTROL SHARE ACQUISITION PROVISIONS

Control share acquisition statutes function by denying shares their voting
rights when they contribute to ownership in excess of certain thresholds.
Voting rights for those shares exceeding ownership limits may only be restored
by approval of either a majority or supermajority of disinterested shares.
Thus, control share acquisition statutes effectively require a hostile bidder
to put its offer to a shareholder vote or risk voting disenfranchisement if the
bidder continues buying up a large block of shares.

Vote FOR proposals to opt out of control share acquisition statutes unless
doing so would enable the completion of a takeover that would be detrimental to
shareholders.

Vote AGAINST proposals to amend the charter to include control share
acquisition provisions.

Vote FOR proposals to restore voting rights to the control shares.

CONTROL SHARE CASH-OUT PROVISIONS

Control share cash-out statutes give dissident shareholders the right to
"cash-out" of their position in a company at the expense of the shareholder who
has taken a control position. In other words, when an investor crosses a preset
threshold level, remaining shareholders are given the right to sell their
shares to the acquirer, who must buy them at the highest acquiring price.

Vote FOR proposals to opt out of control share cash-out statutes.

DISGORGEMENT PROVISIONS

Disgorgement provisions require an acquirer or potential acquirer of more
than a certain percentage of a company's stock to disgorge, or pay back, to the
company any profits realized from the sale of that company's stock purchased 24
months before achieving control status. All sales of company stock by the
acquirer occurring within a certain period of time (between 18 months and 24
months) prior to the investor's gaining control status are subject to these
recapture-of-profits provisions.

Vote FOR proposals to opt out of state disgorgement provisions.

FAIR PRICE PROVISIONS

Vote CASE-BY-CASE on proposals to adopt fair price provisions (provisions
that stipulate that an acquirer must pay the same price to acquire all shares
as it paid to acquire the control shares), evaluating factors such as the vote
required to approve the proposed acquisition, the vote required to repeal the
fair price provision, and the mechanism for determining the fair price.

Generally, vote AGAINST fair price provisions with shareholder vote
requirements greater than a majority of disinterested shares.

FREEZE-OUT PROVISIONS

Vote FOR proposals to opt out of state freeze-out provisions. Freeze-out
provisions force an investor who surpasses a certain ownership threshold in a
company to wait a specified period of time before gaining control of the
company.

GREENMAIL

Greenmail payments are targeted share repurchases by management of company
stock from individuals or groups seeking control of the company. Since only the
hostile party receives payment, usually at a substantial premium over the
market value of its shares, the practice discriminates against all other
shareholders.

Vote FOR proposals to adopt anti-greenmail charter or bylaw amendments or
otherwise restrict a company's ability to make greenmail payments.

Vote CASE-BY-CASE on anti-greenmail proposals when they are bundled with
other charter or bylaw amendments.

REINCORPORATION PROPOSALS

Vote CASE-BY-CASE on proposals to change a company's state of incorporation,
taking into consideration both financial and corporate governance concerns,
including:

. The reasons for reincorporating;

. A comparison of the governance provisions;

. Comparative economic benefits; and

. A comparison of the jurisdictional laws.

Vote FOR re-incorporation when the economic factors outweigh any neutral or
negative governance changes.

STAKEHOLDER PROVISIONS

Vote AGAINST proposals that ask the board to consider non-shareholder
constituencies or other non-financial effects when evaluating a merger or
business combination.

STATE ANTITAKEOVER STATUTES

Vote CASE-BY-CASE on proposals to opt in or out of state takeover statutes
(including control share acquisition statutes, control share cash-out statutes,
freezeout provisions, fair price provisions, stakeholder laws, poison pill
endorsements, severance pay and labor contract provisions, anti-greenmail
provisions, and disgorgement provisions).

7. CAPITAL STRUCTURE

ADJUSTMENTS TO PAR VALUE OF COMMON STOCK

Vote FOR management proposals to reduce the par value of common stock.

COMMON STOCK AUTHORIZATION

Vote CASE-BY-CASE on proposals to increase the number of shares of common
stock authorized for issuance using a model developed by ISS.

Vote FOR proposals to approve increases beyond the allowable increase when a
company's shares are in danger of being delisted or if a company's ability to
continue to operate as a going concern is uncertain.

In addition, for capital requests less than or equal to 300 percent of the
current authorized shares that marginally fail the calculated allowable cap
(i.e., exceed the allowable cap by no more than 5 percent), on a CASE-BY-CASE
basis, vote FOR the increase based on the company's performance and whether the
company's ongoing use of shares has shown prudence. Factors should include, at
a minimum, the following:

. Rationale;

. Good performance with respect to peers and index on a five-year total
shareholder return basis;

. Absence of non-shareholder approved poison pill;

. Reasonable equity compensation burn rate;

. No non-shareholder approved pay plans; and

. Absence of egregious equity compensation practices.

DUAL-CLASS STOCK

Vote AGAINST proposals to create a new class of common stock with superior
voting rights.

Vote AGAINST proposals at companies with dual-class capital structures to
increase the number of authorized shares of the class of stock that has
superior voting rights.

Vote FOR proposals to create a new class of nonvoting or sub-voting common
stock if:

. It is intended for financing purposes with minimal or no dilution to
current shareholders;

. It is not designed to preserve the voting power of an insider or
significant shareholder.

ISSUE STOCK FOR USE WITH RIGHTS PLAN

Vote AGAINST proposals that increase authorized common stock for the
explicit purpose of implementing a non-shareholder approved shareholder rights
plan (poison pill).

PREEMPTIVE RIGHTS

Vote CASE-BY-CASE on shareholder proposals that seek preemptive rights,
taking into consideration: the size of a company, the characteristics of its
shareholder base, and the liquidity of the stock.

PREFERRED STOCK

Vote AGAINST proposals authorizing the creation of new classes of preferred
stock with unspecified voting, conversion, dividend distribution, and other
rights ("blank check" preferred stock).

Vote FOR proposals to create "declawed" blank check preferred stock (stock
that cannot be used as a takeover defense).

Vote FOR proposals to authorize preferred stock in cases where the company
specifies the voting, dividend, conversion, and other rights of such stock and
the terms of the preferred stock appear reasonable.

Vote AGAINST proposals to increase the number of blank check preferred stock
authorized for issuance when no shares have been issued or reserved for a
specific purpose.

Vote CASE-BY-CASE on proposals to increase the number of blank check
preferred shares after analyzing the number of preferred shares available for
issue given a company's industry and performance in terms of shareholder
returns.

RECAPITALIZATION

Vote CASE-BY-CASE on recapitalizations (reclassifications of securities),
taking into account the following:

. More simplified capital structure;

. Enhanced liquidity;

. Fairness of conversion terms;

. Impact on voting power and dividends;

. Reasons for the reclassification;

. Conflicts of interest; and

. Other alternatives considered.

REVERSE STOCK SPLITS

Vote FOR management proposals to implement a reverse stock split when the
number of authorized shares will be proportionately reduced.

Vote FOR management proposals to implement a reverse stock split to avoid
delisting.

Vote CASE-BY-CASE on proposals to implement a reverse stock split that do
not proportionately reduce the number of shares authorized for issue based on
the allowable increased calculated using the Capital Structure model.

SHARE REPURCHASE PROGRAMS

Vote FOR management proposals to institute open-market share repurchase
plans in which all shareholders may participate on equal terms.

STOCK DISTRIBUTIONS: SPLITS AND DIVIDENDS

Vote FOR management proposals to increase the common share authorization for
a stock split or share dividend, provided that the increase in authorized
shares would not result in an excessive number of shares available for issuance
as determined using a model developed by ISS.

TRACKING STOCK

Vote CASE-BY-CASE on the creation of tracking stock, weighing the strategic
value of the transaction against such factors as:

. Adverse governance changes;

. Excessive increases in authorized capital stock;

. Unfair method of distribution;

. Diminution of voting rights;

. Adverse conversion features;

. Negative impact on stock option plans; and

. Alternatives such as spin-off.

8. EXECUTIVE AND DIRECTOR COMPENSATION

EQUITY COMPENSATION PLANS

Vote CASE-BY-CASE on equity-based compensation plans. Vote AGAINST the
equity plan if any of the following factors apply:

. The total cost of the company's equity plans is unreasonable;

. The plan expressly permits the repricing of stock options without prior
shareholder approval;

. There is a disconnect between CEO pay and the company's performance;

. The company's three year burn rate exceeds the greater of 2% and the
mean plus 1 standard deviation of its industry group; or

. The plan is a vehicle for poor pay practices.

Each of these factors is further described below:

COST OF EQUITY PLANS

Generally, vote AGAINST equity plans if the cost is unreasonable. For
non-employee director plans, vote FOR the plan if certain factors are met (see
Director Compensation section).

The cost of the equity plans is expressed as Shareholder Value Transfer
(SVT), which is measured using a binomial option pricing model that assesses
the amount of shareholders' equity flowing out of the company to employees and
directors. SVT is expressed as both a dollar amount and as a percentage of
market value, and includes the new shares proposed, shares available under
existing plans, and shares granted but unexercised. All award types are valued.
For omnibus plans, unless limitations are placed on the most expensive types of
awards (for example, full value awards), the assumption is made that all awards
to be granted will be the most expensive types. See discussion of specific
types of awards.

The Shareholder Value Transfer is reasonable if it falls below the
company-specific allowable cap. The allowable cap is determined as follows: The
top quartile performers in each industry group (using the Global Industry
Classification Standard GICS) are identified. Benchmark SVT levels for each
industry are established based on these top performers' historic SVT.
Regression analyses are run on each industry group to identify the variables
most strongly correlated to SVT. The benchmark industry SVT level is then
adjusted upwards or downwards for the specific company by plugging the
company-specific performance measures, size and cash compensation into the
industry cap equations to arrive at the company's allowable cap.

REPRICING PROVISIONS

Vote AGAINST plans that expressly permit the repricing of underwater stock
options without prior shareholder approval, even if the cost of the plan is
reasonable. Also, WITHHOLD from members of the Compensation Committee who
approved and/or implemented an option exchange program by repricing and buying
out underwater options for stock, cash or other consideration or canceling
underwater options and regranting options with a lower exercise price without
prior shareholder approval, even if such repricings are allowed in their equity
plan.

Vote AGAINST plans if the company has a history of repricing options without
shareholder approval, and the applicable listing standards would not preclude
them from doing so.

PAY-FOR PERFORMANCE DISCONNECT

Generally vote AGAINST plans in which:

. there is a disconnect between the CEO's pay and company performance (an
increase in pay and a decrease in performance);

. the main source of the pay increase (over half) is equity-based, and

. the CEO is a participant of the equity proposal.

Performance decreases are based on negative one- and three-year total
shareholder returns. CEO pay increases are based on the CEO's total direct
compensation (salary, cash bonus, present value of stock options, face value of
restricted stock, value of non-equity incentive payouts, change in pension
value and nonqualified deferred compensation earnings, and all other
compensation) increasing over the previous year.

WITHHOLD votes from the Compensation Committee members when the company has
a pay for performance disconnect.

On a CASE-BY-CASE basis, vote for equity plans and FOR compensation
committee members with a pay-for-performance disconnect if compensation
committee members can present strong and compelling evidence of improved
committee performance. This evidence must go beyond the usual compensation
committee report disclosure. This additional evidence necessary includes all of
the following:

. The compensation committee has reviewed all components of the CEO's
compensation, including the following:

- Base salary, bonus, long-term incentives;

- Accumulative realized and unrealized stock option and restricted
stock gains;

- Dollar value of perquisites and other personal benefits to the CEO
and the total cost to the company;

- Earnings and accumulated payment obligations under the company's
nonqualified deferred compensation program;

- Actual projected payment obligations under the company's
supplemental executive retirement plan (SERPs).

. A tally sheet with all the above components should be disclosed for the
following termination scenarios:

- Payment if termination occurs within 12 months: $ ;

- Payment if "not for cause" termination occurs within 12 months:
$ ;

- Payment if "change of control" termination occurs within 12
months: $ .

. The compensation committee is committed to providing additional
information on the named executives' annual cash bonus program and/or
long-term incentive cash plan for the current fiscal year. The
compensation committee will provide full disclosure of the qualitative
and quantitative performance criteria and hurdle rates used to determine
the payouts of the cash program. From this disclosure, shareholders will
know the minimum level of performance required for any cash bonus to be
delivered, as well as the maximum cash bonus payable for superior
performance.

The repetition of the compensation committee report does not meet ISS'
requirement of compelling and strong evidence of improved disclosure. The level
of transparency and disclosure is at the highest level where shareholders can
understand the mechanics of the annual cash bonus and/or long-term incentive
cash plan based on the additional disclosure.

. The compensation committee is committed to granting a substantial
portion of performance-based equity awards to the named executive
officers. A substantial portion of performance-based awards would be at
least 50 percent of the shares awarded to each of the named executive
officers. Performance-based equity awards are earned or paid out based
on the achievement of company performance targets. The company will
disclose the details of the performance criteria (e.g., return on
equity) and the hurdle rates (e.g., 15 percent) associated with the
performance targets. From this disclosure, shareholders will know the
minimum level of performance required for any equity grants to be made.
The performance-based equity awards do not refer to non-qualified stock
options/1/ or performance-accelerated grants./2 /Instead,
performance-based equity awards are performance-contingent grants where
the individual will not receive the equity grant by not meeting the
target performance and vice versa.

The level of transparency and disclosure is at the highest level where
shareholders can understand the mechanics of the performance-based equity
awards based on the additional disclosure.

. The compensation committee has the sole authority to hire and fire
outside compensation consultants. The role of the outside compensation
consultant is to assist the compensation committee to analyze executive
pay packages or contracts and understand the company's financial
measures.

THREE-YEAR BURN RATE/BURN RATE COMMITMENT

Generally vote AGAINST plans if the company's most recent three-year burn
rate exceeds one standard deviation in excess of the industry mean (per the
following Burn Rate Table) and is over two percent of common shares
outstanding. The three-year burn rate policy does not apply to non-employee
director plans unless outside directors receive a significant portion of shares
each year.

However, vote FOR equity plans if the company fails this burn rate test but
the company commits in a public filing to a three-year average burn rate equal
to its GICS group burn rate mean plus one standard deviation (or 2%, whichever
is greater), assuming all other conditions for voting FOR the plan have been
met.

If a company fails to fulfill its burn rate commitment, vote to WITHHOLD
from the compensation committee.

- - --------
/1/ Non-qualified stock options are not performance-based awards unless the
grant or the vesting of the stock options is tied to the achievement of a
pre-determined and disclosed performance measure. A rising stock market
will generally increase share prices of all companies, despite of the
company's underlying performance.
/2/ Performance-accelerated grants are awards that vest earlier based on the
achievement of a specified measure. However, these grants will ultimately
vest over time even without the attainment of the goal(s).

2007 BURN RATE TABLE

RUSSELL 3000 NON-RUSSELL 3000
---------------------- ----------------------
STANDARD MEAN + STANDARD MEAN +
GICS DESCRIPTION MEAN DEVIATION STDEV MEAN DEVIATION STDEV
---- ------------------------------------- ----- --------- ------ ----- --------- ------

1010 Energy 1.37% 0.92% 2.29% 1.76% 2.01% 3.77%
1510 Materials 1.23% 0.62% 1.85% 2.21% 2.15% 4.36%
2010 Capital Goods 1.60% 0.98% 2.57% 2.34% 1.98% 4.32%
2020 Commercial Services & Supplies 2.39% 1.42% 3.81% 2.25% 1.93% 4.18%
2030 Transportation 1.30% 1.01% 2.31% 1.92% 1.95% 3.86%
2510 Automobiles & Components 1.93% 0.98% 2.90% 2.37% 2.32% 4.69%
2520 Consumer Durables & Apparel 1.97% 1.12% 3.09% 2.02% 1.68% 3.70%
2530 Hotels Restaurants & Leisure 2.22% 1.19% 3.41% 2.29% 1.88% 4.17%
2540 Media 1.78% 0.92% 2.70% 3.26% 2.36% 5.62%
2550 Retailing 1.95% 1.10% 3.05% 2.92% 2.21% 5.14%
3010, 3020,
3030 Food & Staples Retailing 1.66% 1.25% 2.91% 1.90% 2.00% 3.90%
3510 Health Care Equipment & Services 2.87% 1.32% 4.19% 3.51% 2.31% 5.81%
3520 Pharmaceuticals & Biotechnology 3.12% 1.38% 4.50% 3.96% 2.89% 6.85%
4010 Banks 1.31% 0.89% 2.20% 1.15% 1.10% 2.25%
4020 Diversified Financials 2.13% 1.64% 3.76% 4.84% 5.03% 9.87%
4030 Insurance 1.34% 0.88% 2.22% 1.60% 1.96% 3.56%
4040 Real Estate 1.21% 1.02% 2.23% 1.21% 1.02% 2.23%
4510 Software & Services 3.77% 2.05% 5.82% 5.33% 3.13% 8.46%
4520 Technology Hardware & Equipment 3.05% 1.65% 4.70% 3.58% 2.34% 5.92%
4530 Semiconductors & Semiconductor Equip. 3.76% 1.64% 5.40% 4.48% 2.46% 6.94%
5010 Telecommunication Services 1.71% 0.99% 2.70% 2.98% 2.94% 5.92%
5510 Utilities 0.84% 0.51% 1.35% 0.84% 0.51% 1.35%

For companies that grant both full value awards and stock options to their
employees, ISS shall apply a premium on full value awards for the past three
fiscal years. The guideline for applying the premium is as follows:

ANNUAL STOCK PRICE
CHARACTERISTICS VOLATILITY PREMIUM
- - --------------- ------------------ --------------------------------------------------

High annual volatility 53% and higher 1 full-value award will count as 1.5 option shares
Moderate annual volatility 25% - 52% 1 full-value award will count as 2.0 option shares
Low annual volatility Less than 25% 1 full-value award will count as 4.0 option shares

POOR PAY PRACTICES

Vote AGAINST equity plans if the plan is a vehicle for poor compensation
practices.

WITHHOLD from compensation committee members, CEO, and potentially the
entire board, if the company has poor compensation practices. The following
practices, while not exhaustive, are examples of poor compensation practices
that may warrant withholding votes:

. Egregious employment contracts (e.g., those containing multi-year
guarantees for bonuses and grants);

. Excessive perks that dominate compensation (e.g., tax gross-ups for
personal use of corporate aircraft);

. Huge bonus payouts without justifiable performance linkage or proper
disclosure;

. Performance metrics that are changed (e.g., canceled or replaced during
the performance period without adequate explanation of the action and
the link to performance);

. Egregious pension/SERP (supplemental executive retirement plan) payouts
(e.g., the inclusion of additional years of service not worked or
inclusion of performance-based equity awards in the pension calculation);

. New CEO awarded an overly generous new hire package (e.g., including
excessive "make whole" provisions or any of the poor pay practices
listed in this policy);

. Excessive severance provisions (e.g., including excessive change in
control payments);

. Change in control payouts without loss of job or substantial diminution
of job duties;

. Internal pay disparity;

. Options backdating (covered in a separate policy); and

. Other excessive compensation payouts or poor pay practices at the
company.

SPECIFIC TREATMENT OF CERTAIN AWARD TYPES IN EQUITY PLAN EVALUATIONS:

DIVIDEND EQUIVALENT RIGHTS

Options that have Dividend Equivalent Rights (DERs) associated with them
will have a higher calculated award value than those without DERs under the
binomial model, based on the value of these dividend streams. The higher value
will be applied to new shares, shares available under existing plans, and
shares awarded but not exercised per the plan specifications. DERS transfer
more shareholder equity to employees and non-employee directors and this cost
should be captured.

LIBERAL SHARE RECYCLING PROVISIONS

Under net share counting provisions, shares tendered by an option holder to
pay for the exercise of an option, shares withheld for taxes or shares
repurchased by the company on the open market can be recycled back into the
equity plan for awarding again. All awards with such provisions should be
valued as full-value awards. Stock-settled stock appreciation rights (SSARs)
will also be considered as full-value awards if a company counts only the net
shares issued to employees towards their plan reserve.

OTHER COMPENSATION PROPOSALS AND POLICIES

401(K) EMPLOYEE BENEFIT PLANS

Vote FOR proposals to implement a 401(k) savings plan for employees.

DIRECTOR COMPENSATION

Vote CASE-BY-CASE on compensation plans for non-employee directors, based on
the cost of the plans against the company's allowable cap.

On occasion, director stock plans that set aside a relatively small number
of shares when combined with employee or executive stock compensation plans
exceed the allowable cap. Vote for the plan if ALL of the following qualitative
factors in the board's compensation are met and disclosed in the proxy
statement:

. Director stock ownership guidelines with a minimum of three times the
annual cash retainer.

. Vesting schedule or mandatory holding/deferral period:

- A minimum vesting of three years for stock options or restricted
stock; or

- Deferred stock payable at the end of a three-year deferral period.

. Mix between cash and equity:

- A balanced mix of cash and equity, for example 40% cash/60% equity or
50% cash/50% equity; or

- If the mix is heavier on the equity component, the vesting schedule
or deferral period should be more stringent, with the lesser of five
years or the term of directorship.

. No retirement/benefits and perquisites provided to non-employee
directors; and

. Detailed disclosure provided on cash and equity compensation delivered
to each non-employee director for the most recent fiscal year in a
table. The column headers for the table may include the following: name
of each non-employee director, annual retainer, board meeting fees,
committee retainer, committee-meeting fees, and equity grants.

DIRECTOR RETIREMENT PLANS

Vote AGAINST retirement plans for non-employee directors.

Vote FOR shareholder proposals to eliminate retirement plans for
non-employee directors.

EMPLOYEE STOCK OWNERSHIP PLANS (ESOPS)

Vote FOR proposals to implement an ESOP or increase authorized shares for
existing ESOPs, unless the number of shares allocated to the ESOP is excessive
(more than five percent of outstanding shares).

EMPLOYEE STOCK PURCHASE PLANS--QUALIFIED PLANS

Vote CASE-BY-CASE on qualified employee stock purchase plans. Vote FOR
employee stock purchase plans where all of the following apply:

. Purchase price is at least 85 percent of fair market value;

. Offering period is 27 months or less; and

. The number of shares allocated to the plan is ten percent or less of the
outstanding shares.

Vote AGAINST qualified employee stock purchase plans where any of the
following apply:

. Purchase price is less than 85 percent of fair market value; or

. Offering period is greater than 27 months; or

. The number of shares allocated to the plan is more than ten percent of
the outstanding shares.

EMPLOYEE STOCK PURCHASE PLANS--NON-QUALIFIED PLANS

Vote CASE-by-CASE on nonqualified employee stock purchase plans. Vote FOR
nonqualified employee stock purchase plans with all the following features:

. Broad-based participation (i.e., all employees of the company with the
exclusion of individuals with 5 percent or more of beneficial ownership
of the company);

. Limits on employee contribution, which may be a fixed dollar amount or
expressed as a percent of base salary;

. Company matching contribution up to 25 percent of employee's
contribution, which is effectively a discount of 20 percent from market
value;

. No discount on the stock price on the date of purchase since there is a
company matching contribution.

Vote AGAINST nonqualified employee stock purchase plans when any of the plan
features do not meet the above criteria. If the company matching contribution
exceeds 25 percent of employee's contribution, evaluate the cost of the plan
against its allowable cap.

INCENTIVE BONUS PLANS AND TAX DEDUCTIBILITY PROPOSALS (OBRA-RELATED
COMPENSATION PROPOSALS)

Vote FOR proposals that simply amend shareholder-approved compensation plans
to include administrative features or place a cap on the annual grants any one
participant may receive to comply with the provisions of Section 162(m).

Vote FOR proposals to add performance goals to existing compensation plans
to comply with the provisions of Section 162(m) unless they are clearly
inappropriate.

Vote CASE-BY-CASE on amendments to existing plans to increase shares
reserved and to qualify for favorable tax treatment under the provisions of
Section 162(m) as long as the plan does not exceed the allowable cap and the
plan does not violate any of the supplemental policies.

Generally vote FOR cash or cash and stock bonus plans that are submitted to
shareholders for the purpose of exempting compensation from taxes under the
provisions of Section 162(m) if no increase in shares is requested.

OPTIONS BACKDATING

In cases where a company has practiced options backdating, WITHHOLD on a
CASE-BY-CASE basis from the members of the compensation committee, depending on
the severity of the practices and the subsequent corrective actions on the part
of the board. WITHHOLD from the compensation committee members who oversaw the
questionable options grant practices or from current compensation committee
members who fail to respond to the issue proactively, depending on several
factors, including, but not limited to:

. Reason and motive for the options backdating issue, such as inadvertent
vs. deliberate grant date changes;

. Length of time of options backdating;

. Size of restatement due to options backdating;

. Corrective actions taken by the board or compensation committee, such as
canceling or repricing backdated options, or recoupment of option gains
on backdated grants;

. Adoption of a grant policy that prohibits backdating, and creation of a
fixed grant schedule or window period for equity grants going forward.

OPTION EXCHANGE PROGRAMS/REPRICING OPTIONS

Vote CASE-by-CASE on management proposals seeking approval to
exchange/reprice options taking into consideration:

. Historic trading patterns--the stock price should not be so volatile
that the options are likely to be back "in-the-money" over the near term;

. Rationale for the re-pricing--was the stock price decline beyond
management's control?

. Is this a value-for-value exchange?

. Are surrendered stock options added back to the plan reserve?

. Option vesting--does the new option vest immediately or is there a
black-out period?

. Term of the option--the term should remain the same as that of the
replaced option;

. Exercise price--should be set at fair market or a premium to market;

. Participants--executive officers and directors should be excluded.

If the surrendered options are added back to the equity plans for
re-issuance, then also take into consideration the company's three-year average
burn rate.

In addition to the above considerations, evaluate the intent, rationale, and
timing of the repricing proposal. The proposal should clearly articulate why
the board is choosing to conduct an exchange program at this point in time.
Repricing underwater options after a recent precipitous drop in the company's
stock price demonstrates poor timing. Repricing after a recent decline in stock
price triggers additional scrutiny and a potential AGAINST vote on the
proposal. At a minimum, the decline should not have happened within the past
year. Also, consider the terms of the surrendered options, such as the grant
date, exercise price and vesting schedule. Grant dates of surrendered options
should be far enough back (two to three years) so as not to suggest that
repricings are being done to take advantage of short-term downward price
movements. Similarly, the exercise price of surrendered options should be above
the 52-week high for the stock price.

Vote FOR shareholder proposals to put option repricings to a shareholder
vote.

STOCK PLANS IN LIEU OF CASH

Vote CASE-by-CASE on plans which provide participants with the option of
taking all or a portion of their cash compensation in the form of stock.

Vote FOR non-employee director only equity plans which provide a
dollar-for-dollar cash for stock exchange.

Vote CASE-by-CASE on plans which do not provide a dollar-for-dollar cash for
stock exchange. In cases where the exchange is not dollar-for-dollar, the
request for new or additional shares for such equity program will be considered
using the binomial option pricing model. In an effort to capture the total cost
of total compensation, ISS will not make any adjustments to carve out the
in-lieu-of cash compensation.

TRANSFER PROGRAMS OF STOCK OPTIONS

One-time Transfers: WITHHOLD votes from compensation committee members if
they fail to submit one-time transfers for to shareholders for approval.

Vote CASE-BY-CASE on one-time transfers. Vote FOR if:

. Executive officers and non-employee directors are excluded from
participating;

. Stock options are purchased by third-party financial institutions at a
discount to their fair value using option pricing models such as
Black-Scholes or a Binomial Option Valuation or other appropriate
financial models;

. There is a two-year minimum holding period for sale proceeds (cash or
stock) for all participants.

Additionally, management should provide a clear explanation of why options
are being transferred and whether the events leading up to the decline in stock
price were beyond management's control. A review of the company's historic
stock price volatility should indicate if the options are likely to be back
"in-the-money" over the near term.

SHAREHOLDER PROPOSALS ON COMPENSATION

ADVISORY VOTE ON EXECUTIVE COMPENSATION (SAY-ON-PAY)

Generally, vote FOR shareholder proposals that call for non-binding
shareholder ratification of the compensation of the named Executive Officers
and the accompanying narrative disclosure of material factors provided to
understand the Summary Compensation Table.

COMPENSATION CONSULTANTS-DISCLOSURE OF BOARD OR COMPANY'S UTILIZATION

Generally vote FOR shareholder proposals seeking disclosure regarding the
Company, Board, or Board committee's use of compensation consultants, such as
company name, business relationship(s) and fees paid.

DISCLOSURE/SETTING LEVELS OR TYPES OF COMPENSATION FOR EXECUTIVES AND DIRECTORS

Generally, vote FOR shareholder proposals seeking additional disclosure of
executive and director pay information, provided the information requested is
relevant to shareholders' needs, would not put the company at a competitive
disadvantage relative to its industry, and is not unduly burdensome to the
company.

Vote AGAINST shareholder proposals seeking to set absolute levels on
compensation or otherwise dictate the amount or form of compensation.

Vote AGAINST shareholder proposals requiring director fees be paid in stock
only.

Vote CASE-BY-CASE on all other shareholder proposals regarding executive and
director pay, taking into account company performance, pay level versus peers,
pay level versus industry, and long term corporate outlook.

OPTION REPRICING

Vote FOR shareholder proposals to put option repricings to a shareholder
vote.

PAY FOR SUPERIOR PERFORMANCE

Generally vote FOR shareholder proposals based on a case-by-case analysis
that requests the board establish a pay-for-superior performance standard in
the company's executive compensation plan for senior executives. The proposals
call for:

. the annual incentive component of the plan should utilize financial
performance criteria that can be benchmarked against peer group
performance, and provide that no annual bonus be awarded based on
financial performance criteria unless the company exceeds the median or
mean performance of a disclosed group of peer companies on the selected
financial criteria;

. the long-term equity compensation component of the plan should utilize
financial and/or stock price performance criteria that can be
benchmarked against peer group performance, and any options, restricted
shares, or other equity compensation used should be structured so that
compensation is

received only when company performance exceeds the median or mean
performance of the peer group companies on the selected financial and
stock price performance criteria; and

. the plan disclosure should allow shareholders to monitor the correlation
between pay and performance.

Consider the following factors in evaluating this proposal:

. What aspects of the company's annual and long-term equity incentive
programs are performance driven?

. If the annual and long-term equity incentive programs are performance
driven, are the performance criteria and hurdle rates disclosed to
shareholders or are they benchmarked against a disclosed peer group?

. Can shareholders assess the correlation between pay and performance
based on the current disclosure?

. What type of industry and stage of business cycle does the company
belong to?

PENSION PLAN INCOME ACCOUNTING

Generally vote FOR shareholder proposals to exclude pension plan income in
the calculation of earnings used in determining executive bonuses/compensation.

PERFORMANCE-BASED AWARDS

Vote CASE-BY-CASE on shareholder proposal requesting that a significant
amount of future long-term incentive compensation awarded to senior executives
shall be performance-based and requesting that the board adopt and disclose
challenging performance metrics to shareholders, based on the following
analytical steps:

. First, vote FOR shareholder proposals advocating the use of
performance-based equity awards, such as performance contingent options
or restricted stock, indexed options or premium-priced options, unless
the proposal is overly restrictive or if the company has demonstrated
that it is using a "substantial" portion of performance-based awards for
its top executives. Standard stock options and performance-accelerated
awards do not meet the criteria to be considered as performance-based
awards. Further, premium-priced options should have a premium of at
least 25 percent and higher to be considered performance-based awards.

. Second, assess the rigor of the company's performance-based equity
program. If the bar set for the performance-based program is too low
based on the company's historical or peer group comparison, generally
vote FOR the proposal. Furthermore, if target performance results in an
above target payout, vote FOR the shareholder proposal due to program's
poor design. If the company does not disclose the performance metric of
the performance-based equity program, vote FOR the shareholder proposal
regardless of the outcome of the first step to the test.

In general, vote FOR the shareholder proposal if the company does not meet
both of the above two steps.

SEVERANCE AGREEMENTS FOR EXECUTIVES/GOLDEN PARACHUTES

Vote FOR shareholder proposals to require golden parachutes or executive
severance agreements to be submitted for shareholder ratification, unless the
proposal requires shareholder approval prior to entering into employment
contracts.

Vote on a CASE-BY-CASE basis on proposals to ratify or cancel golden
parachutes. An acceptable parachute should include, but is not limited to, the
following:

. The triggering mechanism should be beyond the control of management;

. The amount should not exceed three times base amount (defined as the
average annual taxable W-2 compensation during the five years prior to
the year in which the change of control occurs;

. Change-in-control payments should be double-triggered, i.e., (1) after a
change in control has taken place, and (2) termination of the executive
as a result of the change in control. Change in control is defined as a
change in the company ownership structure.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS (SERPS)

Generally vote FOR shareholder proposals requesting to put extraordinary
benefits contained in SERP agreements to a shareholder vote unless the
company's executive pension plans do not contain excessive benefits beyond what
is offered under employee-wide plans.

Generally vote FOR shareholder proposals requesting to limit the executive
benefits provided under the company's supplemental executive retirement plan
(SERP) by limiting covered compensation to a senior executive's annual salary
and excluding of all incentive or bonus pay from the plan's definition of
covered compensation used to establish such benefits.

9. CORPORATE RESPONSIBILITY

CONSUMER ISSUES AND PUBLIC SAFETY

ANIMAL RIGHTS

Generally vote AGAINST proposals to phase out the use of animals in product
testing unless:

. The company is conducting animal testing programs that are unnecessary
or not required by regulation;

. The company is conducting animal testing when suitable alternatives are
accepted and used at peer firms;

. The company has been the subject of recent, significant controversy
related to its testing programs.

Generally vote FOR proposals seeking a report on the company's animal
welfare standards unless:

. The company has already published a set of animal welfare standards and
monitors compliance;

. The company's standards are comparable to or better than those of peer
firms; and

. There are no serious controversies surrounding the company's treatment
of animals.

DRUG PRICING

Generally vote AGAINST proposals requesting that companies implement
specific price restraints on pharmaceutical products unless the company fails
to adhere to legislative guidelines or industry norms in its product pricing.

Vote CASE-BY-CASE on proposals requesting that the company evaluate their
product pricing considering:

. The existing level of disclosure on pricing policies;

. Deviation from established industry pricing norms;

. The company's existing initiatives to provide its products to needy
consumers;

. Whether the proposal focuses on specific products or geographic regions.

DRUG REIMPORTATION

Generally vote FOR proposals requesting that companies report on the
financial and legal impact of their policies regarding prescription drug
reimportation unless such information is already publicly disclosed.

Generally vote AGAINST proposals requesting that companies adopt specific
policies to encourage or constrain prescription drug reimportation.

GENETICALLY MODIFIED FOODS

Vote AGAINST proposals asking companies to voluntarily label genetically
engineered (GE) ingredients in their products or alternatively to provide
interim labeling and eventually eliminate GE ingredients due to the costs and
feasibility of labeling and/or phasing out the use of GE ingredients.

Vote CASE-BY-CASE on proposals asking for a report on the feasibility of
labeling products containing GE ingredients taking into account:

. The relevance of the proposal in terms of the company's business and the
proportion of it affected by the resolution;

. The quality of the company's disclosure on GE product labeling and
related voluntary initiatives and how this disclosure compares with peer
company disclosure;

. Company's current disclosure on the feasibility of GE product labeling,
including information on the related costs;

. Any voluntary labeling initiatives undertaken or considered by the
company.

Vote CASE-BY-CASE on proposals asking for the preparation of a report on the
financial, legal, and environmental impact of continued use of GE
ingredients/seeds. Evaluate the following:

. The relevance of the proposal in terms of the company's business and the
proportion of it affected by the resolution;

. The quality of the company's disclosure on risks related to GE product
use and how this disclosure compares with peer company disclosure;

. The percentage of revenue derived from international operations,
particularly in Europe, where GE products are more regulated and
consumer backlash is more pronounced.

Vote AGAINST proposals seeking a report on the health and environmental
effects of genetically modified organisms (GMOs). Health studies of this sort
are better undertaken by regulators and the scientific community.

Vote AGAINST proposals to completely phase out GE ingredients from the
company's products or proposals asking for reports outlining the steps
necessary to eliminate GE ingredients from the company's products. Such
resolutions presuppose that there are proven health risks to GE ingredients (an
issue better left to federal regulators) that outweigh the economic benefits
derived from biotechnology.

HANDGUNS

Generally vote AGAINST requests for reports on a company's policies aimed at
curtailing gun violence in the United States unless the report is confined to
product safety information. Criminal misuse of firearms is beyond company
control and instead falls within the purview of law enforcement agencies.

HIV/AIDS

Vote CASE-BY-CASE on requests for reports outlining the impact of the health
pandemic (HIV/AIDS, malaria and tuberculosis) on the company's Sub-Saharan
operations and how the company is responding to it, taking into account:

. The nature and size of the company's operations in Sub-Saharan Africa
and the number of local employees;

. The company's existing healthcare policies, including benefits and
healthcare access for local workers;

. Company donations to healthcare providers operating in the region.

Vote AGAINST proposals asking companies to establish, implement, and report
on a standard of response to the HIV/AIDS, TB, and malaria health pandemic in
Africa and other developing countries, unless the company has significant
operations in these markets and has failed to adopt policies and/or procedures
to address these issues comparable to those of industry peers.

PREDATORY LENDING

Vote CASE-BY CASE on requests for reports on the company's procedures for
preventing predatory lending, including the establishment of a board committee
for oversight, taking into account:

. Whether the company has adequately disclosed mechanisms in place to
prevent abusive lending practices;

. Whether the company has adequately disclosed the financial risks of its
subprime business;

. Whether the company has been subject to violations of lending laws or
serious lending controversies;

. Peer companies' policies to prevent abusive lending practices.

TOBACCO

Most tobacco-related proposals should be evaluated on a CASE-BY-CASE basis,
taking into account the following factors:

Second-hand smoke:

. Whether the company complies with all local ordinances and regulations;

. The degree that voluntary restrictions beyond those mandated by law
might hurt the company's competitiveness;

. The risk of any health-related liabilities.

Advertising to youth:

. Whether the company complies with federal, state, and local laws on the
marketing of tobacco or if it has been fined for violations;

. Whether the company has gone as far as peers in restricting advertising;

. Whether the company entered into the Master Settlement Agreement, which
restricts marketing of tobacco to youth;

. Whether restrictions on marketing to youth extend to foreign countries.

Cease production of tobacco-related products or avoid selling products to
tobacco companies:

. The percentage of the company's business affected;

. The economic loss of eliminating the business versus any potential
tobacco-related liabilities.

Spin-off tobacco-related businesses:

. The percentage of the company's business affected;

. The feasibility of a spin-off;

. Potential future liabilities related to the company's tobacco business.

Stronger product warnings:

Vote AGAINST proposals seeking stronger product warnings. Such decisions are
better left to public health authorities.

Investment in tobacco stocks:

Vote AGAINST proposals prohibiting investment in tobacco equities. Such
decisions are better left to portfolio managers.

TOXIC CHEMICALS

Generally vote FOR resolutions requesting that a company discloses its
policies related to toxic chemicals.

Vote CASE-BY-CASE on resolutions requesting that companies evaluate and
disclose the potential financial and legal risks associated with utilizing
certain chemicals, considering:

. Current regulations in the markets in which the company operates;

. Recent significant controversy, litigation, or fines stemming from toxic
chemicals or ingredients at the company; and

. The current level of disclosure on this topic.

Generally vote AGAINST resolutions requiring that a company reformulate its
products within a certain timeframe unless such actions are required by law in
specific markets.

ENVIRONMENT AND ENERGY

ARCTIC NATIONAL WILDLIFE REFUGE

Generally vote AGAINST request for reports outlining potential environmental
damage from drilling in the Arctic National Wildlife Refuge (ANWR) unless:

. New legislation is adopted allowing development and drilling in the ANWR
region;

. The company intends to pursue operations in the ANWR; and

. The company does not currently disclose an environmental risk report for
their operations in the ANWR.

CERES PRINCIPLES

Vote CASE-BY-CASE on proposals to adopt the CERES Principles, taking into
account:

. The company's current environmental disclosure beyond legal
requirements, including environmental health and safety (EHS) audits and
reports that may duplicate CERES;

. The company's environmental performance record, including violations of
federal and state regulations, level of toxic emissions, and accidental
spills;

. Environmentally conscious practices of peer companies, including
endorsement of CERES;

. Costs of membership and implementation.

CLIMATE CHANGE

In general, vote FOR resolutions requesting that a company disclose
information on the impact of climate change on the company's operations unless:

. The company already provides current, publicly-available information on
the perceived impact that climate change may have on the company as well
as associated policies and procedures to address such risks and/or
opportunities;

. The company's level of disclosure is comparable to or better than
information provided by industry peers; and

. There are no significant fines, penalties, or litigation associated with
the company's environmental performance.

CONCENTRATED AREA FEEDING OPERATIONS (CAFOS)

Vote FOR resolutions requesting that companies report to shareholders on the
risks and liabilities associated with CAFOs unless:

. The company has publicly disclosed guidelines for its corporate and
contract farming operations, including compliance monitoring; or

. The company does not directly source from CAFOs.

ENVIRONMENTAL-ECONOMIC RISK REPORT

Vote CASE-BY-CASE on proposals requesting an economic risk assessment of
environmental performance considering:

. The feasibility of financially quantifying environmental risk factors;

. The company's compliance with applicable legislation and/or regulations
regarding environmental performance;

. The costs associated with implementing improved standards;

. The potential costs associated with remediation resulting from poor
environmental performance; and

. The current level of disclosure on environmental policies and
initiatives.

ENVIRONMENTAL REPORTS

Generally vote FOR requests for reports disclosing the company's
environmental policies unless it already has well-documented environmental
management systems that are available to the public.

GLOBAL WARMING

Generally vote FOR proposals requesting a report on greenhouse gas emissions
from company operations and/or products unless this information is already
publicly disclosed or such factors are not integral to the company's line of
business.

Generally vote AGAINST proposals that call for reduction in greenhouse gas
emissions by specified amounts or within a restrictive time frame unless the
company lags industry standards and has been the subject of recent, significant
fines or litigation resulting from greenhouse gas emissions.

KYOTO PROTOCOL COMPLIANCE

Generally vote FOR resolutions requesting that companies outline their
preparations to comply with standards established by Kyoto Protocol signatory
markets unless:

. The company does not maintain operations in Kyoto signatory markets;

. The company already evaluates and substantially discloses such
information; or,

. Greenhouse gas emissions do not significantly impact the company's core
businesses.

LAND USE

Generally vote AGAINST resolutions that request the disclosure of detailed
information on a company's policies related to land use or development unless
the company has been the subject of recent, significant fines or litigation
stemming from its land use.

NUCLEAR SAFETY

Generally vote AGAINST resolutions requesting that companies report on risks
associated with their nuclear reactor designs and/or the production and interim
storage of irradiated fuel rods unless:

. The company does not have publicly disclosed guidelines describing its
policies and procedures for addressing risks associated with its
operations;

. The company is non-compliant with Nuclear Regulatory Commission (NRC)
requirements; or

. The company stands out amongst its peers or competitors as having
significant problems with safety or environmental performance related to
its nuclear operations.

OPERATIONS IN PROTECTED AREAS

Generally vote FOR requests for reports outlining potential environmental
damage from operations in protected regions, including wildlife refuges unless:

. The company does not currently have operations or plans to develop
operations in these protected regions; or,

. The company provides disclosure on its operations and environmental
policies in these regions comparable to industry peers.

RECYCLING

Vote CASE-BY-CASE on proposals to adopt a comprehensive recycling strategy,
taking into account:

. The nature of the company's business and the percentage affected;

. The extent that peer companies are recycling;

. The timetable prescribed by the proposal;

. The costs and methods of implementation;

. Whether the company has a poor environmental track record, such as
violations of federal and state regulations.

RENEWABLE ENERGY

In general, vote FOR requests for reports on the feasibility of developing
renewable energy sources unless the report is duplicative of existing
disclosure or irrelevant to the company's line of business.

Generally vote AGAINST proposals requesting that the company invest in
renewable energy sources. Such decisions are best left to management's
evaluation of the feasibility and financial impact that such programs may have
on the company.

SUSTAINABILITY REPORT

Generally vote FOR proposals requesting the company to report on policies
and initiatives related to social, economic, and environmental sustainability,
unless:

. The company already discloses similar information through existing
reports or policies such as an Environment, Health, and Safety (EHS)
report; a comprehensive Code of Corporate Conduct; and/or a Diversity
Report; or

. The company has formally committed to the implementation of a reporting
program based on Global Reporting Initiative (GRI) guidelines or a
similar standard within a specified time frame.

GENERAL CORPORATE ISSUES

CHARITABLE/POLITICAL CONTRIBUTIONS

Generally vote AGAINST proposals asking the company to affirm political
nonpartisanship in the workplace so long as:

. The company is in compliance with laws governing corporate political
activities; and

. The company has procedures in place to ensure that employee
contributions to company-sponsored political action committees (PACs)
are strictly voluntary and not coercive.

Vote AGAINST proposals to publish in newspapers and public media the
company's political contributions as such publications could present
significant cost to the company without providing commensurate value to
shareholders.

Vote CASE-BY-CASE on proposals to improve the disclosure of a company's
political contributions considering:

. Recent significant controversy or litigation related to the company's
political contributions or governmental affairs; and

. The public availability of a policy on political contributions.

Vote AGAINST proposals barring the company from making political
contributions. Businesses are affected by legislation at the federal, state,
and local level and barring contributions can put the company at a competitive
disadvantage.

Vote AGAINST proposals restricting the company from making charitable
contributions. Charitable contributions are generally useful for assisting
worthwhile causes and for creating goodwill in the community. In the absence of
bad faith, self-dealing, or gross negligence, management should determine which
contributions are in the best interests of the company.

Vote AGAINST proposals asking for a list of company executives, directors,
consultants, legal counsels, lobbyists, or investment bankers that have prior
government service and whether such service had a bearing on the business of
the company. Such a list would be burdensome to prepare without providing any
meaningful information to shareholders.

DISCLOSURE OF LOBBYING EXPENDITURES/INITIATIVES

Vote CASE-BY-CASE on proposals requesting information on a company's
lobbying initiatives, considering any significant controversy or litigation
surrounding a company's public policy activities, the current level of
disclosure on lobbying strategy, and the impact that the policy issue may have
on the company's business operations.

LINK EXECUTIVE COMPENSATION TO SOCIAL PERFORMANCE

Vote CASE-BY-CASE on proposals to review ways of linking executive
compensation to social factors, such as corporate downsizings, customer or
employee satisfaction, community involvement, human rights, environmental
performance, predatory lending, and executive/employee pay disparities. Such
resolutions should be evaluated in the context of:

. The relevance of the issue to be linked to pay;

. The degree that social performance is already included in the company's
pay structure and disclosed;

. The degree that social performance is used by peer companies in setting
pay;

. Violations or complaints filed against the company relating to the
particular social performance measure;

. Artificial limits sought by the proposal, such as freezing or capping
executive pay

. Independence of the compensation committee;

. Current company pay levels.

OUTSOURCING/OFFSHORING

Vote CASE-BY-CASE on proposals calling for companies to report on the risks
associated with outsourcing, considering:

. Risks associated with certain international markets;

. The utility of such a report to shareholders;

. The existence of a publicly available code of corporate conduct that
applies to international operations.

LABOR STANDARDS AND HUMAN RIGHTS

CHINA PRINCIPLES

Vote AGAINST proposals to implement the China Principles unless:

. There are serious controversies surrounding the company's China
operations; and

. The company does not have a code of conduct with standards similar to
those promulgated by the International Labor Organization (ILO).

COUNTRY-SPECIFIC HUMAN RIGHTS REPORTS

Vote CASE-BY-CASE on requests for reports detailing the company's operations
in a particular country and steps to protect human rights, based on:

. The nature and amount of company business in that country;

. The company's workplace code of conduct;

. Proprietary and confidential information involved;

. Company compliance with U.S. regulations on investing in the country;

. Level of peer company involvement in the country.

INTERNATIONAL CODES OF CONDUCT/VENDOR STANDARDS

Vote CASE-BY-CASE on proposals to implement certain human rights standards
at company facilities or those of its suppliers and to commit to outside,
independent monitoring. In evaluating these proposals, the following should be
considered:

. The company's current workplace code of conduct or adherence to other
global standards and the degree they meet the standards promulgated by
the proponent;

. Agreements with foreign suppliers to meet certain workplace standards;

. Whether company and vendor facilities are monitored and how;

. Company participation in fair labor organizations;

. Type of business;

. Proportion of business conducted overseas;

. Countries of operation with known human rights abuses;

. Whether the company has been recently involved in significant labor and
human rights controversies or violations;

. Peer company standards and practices;

. Union presence in company's international factories.

Generally vote FOR reports outlining vendor standards compliance unless any
of the following apply:

. The company does not operate in countries with significant human rights
violations;

. The company has no recent human rights controversies or violations; or

. The company already publicly discloses information on its vendor
standards compliance.

MACBRIDE PRINCIPLES

Vote CASE-BY-CASE on proposals to endorse or increase activity on the
MacBride Principles, taking into account:

. Company compliance with or violations of the Fair Employment Act of 1989;

. Company antidiscrimination policies that already exceed the legal
requirements;

. The cost and feasibility of adopting all nine principles;

. The cost of duplicating efforts to follow two sets of standards (Fair
Employment and the MacBride Principles);

. The potential for charges of reverse discrimination;

. The potential that any company sales or contracts in the rest of the
United Kingdom could be negatively impacted;

. The level of the company's investment in Northern Ireland;

. The number of company employees in Northern Ireland;

. The degree that industry peers have adopted the MacBride Principles;

. Applicable state and municipal laws that limit contracts with companies
that have not adopted the MacBride Principles.

MILITARY BUSINESS

FOREIGN MILITARY SALES/OFFSETS

Vote AGAINST reports on foreign military sales or offsets. Such disclosures
may involve sensitive and confidential information. Moreover, companies must
comply with government controls and reporting on foreign military sales.

LANDMINES AND CLUSTER BOMBS

Vote CASE-BY-CASE on proposals asking a company to renounce future
involvement in antipersonnel landmine production, taking into account:

. Whether the company has in the past manufactured landmine components;

. Whether the company's peers have renounced future production.

Vote CASE-BY-CASE on proposals asking a company to renounce future
involvement in cluster bomb production, taking into account:

. What weapons classifications the proponent views as cluster bombs;

. Whether the company currently or in the past has manufactured cluster
bombs or their components;

. The percentage of revenue derived from cluster bomb manufacture;

. Whether the company's peers have renounced future production.

NUCLEAR WEAPONS

Vote AGAINST proposals asking a company to cease production of nuclear
weapons components and delivery systems, including disengaging from current and
proposed contracts. Components and delivery systems serve multiple military and
non-military uses, and withdrawal from these contracts could have a negative
impact on the company's business.

OPERATIONS IN NATIONS SPONSORING TERRORISM (E.G., IRAN)

Vote CASE-BY-CASE on requests for a board committee review and report
outlining the company's financial and reputational risks from its operations in
a terrorism-sponsoring state, taking into account current disclosure on:

. The nature and purpose of the operations and the amount of business
involved (direct and indirect revenues and expenses) that could be
affected by political disruption;

. Compliance with U.S. sanctions and laws.

SPACED-BASED WEAPONIZATION

Generally vote FOR reports on a company's involvement in spaced-based
weaponization unless:

. The information is already publicly available; or

. The disclosures sought could compromise proprietary information.

WORKPLACE DIVERSITY

BOARD DIVERSITY

Generally vote FOR reports on the company's efforts to diversify the board,
unless:

. The board composition is reasonably inclusive in relation to companies
of similar size and business; or

. The board already reports on its nominating procedures and diversity
initiatives.

Generally vote AGAINST proposals that would call for the adoption of
specific committee charter language regarding diversity initiatives unless the
company fails to publicly disclose existing equal opportunity or
non-discrimination policies.

Vote CASE-BY-CASE on proposals asking the company to increase the
representation of women and minorities on the board, taking into account:

. The degree of board diversity;

. Comparison with peer companies;

. Established process for improving board diversity;

. Existence of independent nominating committee;

. Use of outside search firm;

. History of EEO violations.

EQUAL EMPLOYMENT OPPORTUNITY (EEO)

Generally vote FOR reports outlining the company's affirmative action
initiatives unless all of the following apply:

. The company has well-documented equal opportunity programs;

. The company already publicly reports on its company-wide affirmative
initiatives and provides data on its workforce diversity; and

. The company has no recent EEO-related violations or litigation.

Vote AGAINST proposals seeking information on the diversity efforts of
suppliers and service providers, which can pose a significant cost and
administration burden on the company.

GLASS CEILING

Generally vote FOR reports outlining the company's progress towards the
Glass Ceiling Commission's business recommendations, unless:

. The composition of senior management and the board is fairly inclusive;

. The company has well-documented programs addressing diversity
initiatives and leadership development;

. The company already issues public reports on its company-wide
affirmative initiatives and provides data on its workforce diversity; and

. The company has had no recent, significant EEO-related violations or
litigation.

SEXUAL ORIENTATION

Vote FOR proposals seeking to amend a company's EEO statement in order to
prohibit discrimination based on sexual orientation, unless the change would
result in excessive costs for the company.

Vote AGAINST proposals to extend company benefits to or eliminate benefits
from domestic partners. Benefits decisions should be left to the discretion of
the company.

10. MUTUAL FUND PROXIES

ELECTION OF DIRECTORS

Vote CASE-BY-CASE on the election of directors and trustees, following the
same guidelines for uncontested directors for public company shareholder
meetings. However, mutual fund boards do not usually have compensation
committees, so do not withhold for the lack of this committee.

CONVERTING CLOSED-END FUND TO OPEN-END FUND

Vote CASE-BY-CASE on conversion proposals, considering the following factors:

. Past performance as a closed-end fund;

. Market in which the fund invests;

. Measures taken by the board to address the discount; and

. Past shareholder activism, board activity, and votes on related
proposals.

PROXY CONTESTS

Vote CASE-BY-CASE on proxy contests, considering the following factors:

. Past performance relative to its peers;

. Market in which fund invests;

. Measures taken by the board to address the issues;

. Past shareholder activism, board activity, and votes on related
proposals;

. Strategy of the incumbents versus the dissidents;

. Independence of directors;

. Experience and skills of director candidates;

. Governance profile of the company;

. Evidence of management entrenchment.

INVESTMENT ADVISORY AGREEMENTS

Vote CASE-BY-CASE on investment advisory agreements, considering the
following factors:

. Proposed and current fee schedules;

. Fund category/investment objective;

. Performance benchmarks;

. Share price performance as compared with peers;

. Resulting fees relative to peers;

. Assignments (where the advisor undergoes a change of control).

APPROVING NEW CLASSES OR SERIES OF SHARES

Vote FOR the establishment of new classes or series of shares.

PREFERRED STOCK PROPOSALS

Vote CASE-BY-CASE on the authorization for or increase in preferred shares,
considering the following factors:

. Stated specific financing purpose;

. Possible dilution for common shares;

. Whether the shares can be used for antitakeover purposes.

1940 ACT POLICIES

Vote CASE-BY-CASE on policies under the Investment Advisor Act of 1940,
considering the following factors:

. Potential competitiveness;

. Regulatory developments;

. Current and potential returns; and

. Current and potential risk.

Generally vote FOR these amendments as long as the proposed changes do not
fundamentally alter the investment focus of the fund and do comply with the
current SEC interpretation.

CHANGING A FUNDAMENTAL RESTRICTION TO A NONFUNDAMENTAL RESTRICTION

Vote CASE-BY-CASE on proposals to change a fundamental restriction to a
non-fundamental restriction, considering the following factors:

. The fund's target investments;

. The reasons given by the fund for the change; and

. The projected impact of the change on the portfolio.

CHANGE FUNDAMENTAL INVESTMENT OBJECTIVE TO NONFUNDAMENTAL

Vote AGAINST proposals to change a fund's fundamental investment objective
to non-fundamental.

NAME CHANGE PROPOSALS

Vote CASE-BY-CASE on name change proposals, considering the following
factors:

. Political/economic changes in the target market;

. Consolidation in the target market; and

. Current asset composition.

CHANGE IN FUND'S SUBCLASSIFICATION

Vote CASE-BY-CASE on changes in a fund's sub-classification, considering the
following factors:

. Potential competitiveness;

. Current and potential returns;

. Risk of concentration;

. Consolidation in target industry.

DISPOSITION OF ASSETS/TERMINATION/LIQUIDATION

Vote CASE-BY-CASE on proposals to dispose of assets, to terminate or
liquidate, considering the following factors:

. Strategies employed to salvage the company;

. The fund's past performance;

. The terms of the liquidation.

CHANGES TO THE CHARTER DOCUMENT

Vote CASE-BY-CASE on changes to the charter document, considering the
following factors:

. The degree of change implied by the proposal;

. The efficiencies that could result;

. The state of incorporation;

. Regulatory standards and implications.

Vote AGAINST any of the following changes:

. Removal of shareholder approval requirement to reorganize or terminate
the trust or any of its series;

. Removal of shareholder approval requirement for amendments to the new
declaration of trust;

. Removal of shareholder approval requirement to amend the fund's
management contract, allowing the contract to be modified by the
investment manager and the trust management, as permitted by the 1940
Act;

. Allow the trustees to impose other fees in addition to sales charges on
investment in a fund, such as deferred sales charges and redemption fees
that may be imposed upon redemption of a fund's shares;

. Removal of shareholder approval requirement to engage in and terminate
subadvisory arrangements;

. Removal of shareholder approval requirement to change the domicile of
the fund.

CHANGING THE DOMICILE OF A FUND

Vote CASE-BY-CASE on re-incorporations, considering the following factors:

. Regulations of both states;

. Required fundamental policies of both states;

. The increased flexibility available.

AUTHORIZING THE BOARD TO HIRE AND TERMINATE SUBADVISORS WITHOUT SHAREHOLDER
APPROVAL

Vote AGAINST proposals authorizing the board to hire/terminate subadvisors
without shareholder approval.

DISTRIBUTION AGREEMENTS

Vote CASE-BY-CASE on distribution agreement proposals, considering the
following factors:

. Fees charged to comparably sized funds with similar objectives;

. The proposed distributor's reputation and past performance;

. The competitiveness of the fund in the industry;

. The terms of the agreement.

MASTER-FEEDER STRUCTURE

Vote FOR the establishment of a master-feeder structure.

MERGERS

Vote CASE-BY-CASE on merger proposals, considering the following factors:

. Resulting fee structure;

. Performance of both funds;

. Continuity of management personnel;

. Changes in corporate governance and their impact on shareholder rights.

SHAREHOLDER PROPOSALS FOR MUTUAL FUNDS

ESTABLISH DIRECTOR OWNERSHIP REQUIREMENT

Generally vote AGAINST shareholder proposals that mandate a specific minimum
amount of stock that directors must own in order to qualify as a director or to
remain on the board.

REIMBURSE SHAREHOLDER FOR EXPENSES INCURRED

Vote CASE-BY-CASE on shareholder proposals to reimburse proxy solicitation
expenses. When supporting the dissidents, vote FOR the reimbursement of the
proxy solicitation expenses.

TERMINATE THE INVESTMENT ADVISOR

Vote CASE-BY-CASE on proposals to terminate the investment advisor,
considering the following factors:

. Performance of the fund's Net Asset Value (NAV);

. The fund's history of shareholder relations;

. The performance of other funds under the advisor's management.

Harris Associates L.P.

PROXY VOTING POLICIES, GUIDELINES, AND PROCEDURES
- - -----------------------------------------------------------------------------

I. PROXY VOTING POLICY

Harris Associates L.P. ("Harris", "the Firm" or "we") believes that proxy
voting rights are valuable portfolio assets and an important part of our
investment process, and we exercise our voting responsibilities as a fiduciary
solely with the goal of serving the best interests of our clients in their
capacity as shareholders of a company. As an investment manager, Harris is
primarily concerned with maximizing the value of its clients' investment
portfolios. Harris has long been active in voting proxies on behalf of
shareholders in the belief that the proxy voting process is a significant means
of addressing crucial corporate governance issues and encouraging corporate
actions that are believed to enhance shareholder value. We have a Proxy
Committee comprised of investment professionals that reviews and recommends
policies and procedures regarding our proxy voting and ensures compliance with
those policies.

The proxy voting guidelines below summarize Harris' position on various
issues of concern to investors and give a general indication of how proxies on
portfolio securities will be voted on proposals dealing with particular issues.
We will generally vote proxies in accordance with these guidelines, except as
otherwise determined by the Proxy Committee, unless the client has specifically
instructed us to vote otherwise. These guidelines are not exhaustive and do not
include all potential voting issues. Because proxy issues and the circumstances
of individual companies vary, there may be instances when Harris may not vote
in strict adherence to these guidelines. Our investment professionals, as part
of their ongoing review and analysis of all portfolio holdings, are responsible
for monitoring significant corporate developments, including proxy proposals
submitted to shareholders, and notifying the Proxy Committee if they believe
the economic interests of shareholders may warrant a vote contrary to these
guidelines. In such cases, the Proxy Committee will determine how the proxies
will be voted.

In determining the vote on any proposal, the Proxy Committee will consider
the proposal's expected impact on shareholder value and will not consider any
benefit to Harris, its employees, its affiliates or any other person, other
than benefits to the owners of the securities to be voted, as shareholders.

Harris considers the reputation, experience and competence of a company's
management when it evaluates the merits of investing in a particular company,
and we invest in companies in which we believe management goals and shareholder
goals are aligned. When this happens, by definition, voting with management is
generally the same as voting to maximize the expected value of our investment.
Accordingly, on most issues, our votes are cast in accordance with management's
recommendations. This does not mean that we do not care about corporate
governance. Rather, it is confirmation that our process of investing with
shareholder aligned management is working. Proxy voting is not always black and
white, however, and reasonable people can disagree over some matters of
business judgment. When we believe management's position on a particular issue
is not in the best interests of our clients, we will vote contrary to
management's recommendation.

II. VOTING GUIDELINES

The following guidelines are grouped according to the types of proposals
generally presented to shareholders.

BOARD OF DIRECTORS ISSUES

Harris believes that boards should have a majority of independent directors
and that audit, compensation and nominating committees should generally consist
solely of independent directors.

1. Harris will normally vote in favor of the slate of directors recommended
by the issuer's board provided that a majority of the directors would be
independent.

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Harris Associates L.P.

2. Harris will normally vote in favor of proposals to require a majority of
directors to be independent.

3. Harris will normally vote in favor of proposals that audit, compensation
and nominating committees consist solely of independent directors, and
will vote against the election of non-independent directors who serve on
those committees.

4. Harris will normally vote in favor of proposals regarding director
indemnification arrangements.

5. Harris will normally vote against proposals advocating classified or
staggered boards of directors.

6. Harris will normally vote in favor of cumulative voting for directors.

AUDITORS

Harris believes that the relationship between an issuer and its auditors
should be limited primarily to the audit engagement, although it may include
certain closely related activities such as financial statement preparation and
tax-related services that do not raise any appearance of impaired independence.

1. Harris will normally vote in favor of ratification of auditors selected
by the board or audit committee, subject to the above.

2. Harris will normally vote against proposals to prohibit or limit fees
paid to auditors for all non-audit services, subject to the above.

3. Harris will normally vote in favor of proposals to prohibit or limit
fees paid to auditors for general management consulting services other
than auditing, financial statement preparation and controls, and
tax-related services.

EQUITY BASED COMPENSATION PLANS

Harris believes that appropriately designed equity-based compensation plans
approved by shareholders can be an effective way to align the interests of
long-term shareholders and the interests of management, employees and
directors. However, we are opposed to plans that substantially dilute our
ownership interest in the company, provide participants with excessive awards
or have inherently objectionable structural features.

1. Harris will normally vote against such plans where total potential
dilution (including all equity-based plans) exceeds 15% of shares
outstanding.

2. Harris will normally vote in favor of plans where total potential
dilution (including all equity-based plans) does not exceed 15% of
shares outstanding.

3. Harris will normally vote in favor of proposals to require expensing of
options.

4. Harris will normally vote against proposals to permit repricing of
underwater options.

5. Harris will normally vote against shareholder proposals that seek to
limit directors' compensation to common stock.

6. Harris will normally vote in favor of proposals for employee stock
purchase plans, so long as shares purchased through such plans are sold
at no less than 85% of current market value.

CORPORATE STRUCTURE AND SHAREHOLDER RIGHTS

Harris generally believes that all shareholders should have an equal voice
and that barriers which limit the ability of shareholders to effect change and
to realize full value are not desirable.

1. Harris will normally vote in favor of proposals to authorize the
repurchase of shares.

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Harris Associates L.P.

2. Harris will normally vote against proposals creating or expanding
supermajority voting rights.

3. Harris will normally vote against the adoption of poison pill plans.

4. Harris will normally vote in favor of proposals for stock splits and
reverse stock splits.

5. Harris will normally vote against proposals to authorize different
classes of stock with different voting rights.

6. Harris will normally vote against proposals to increase authorized
shares with preemptive rights if the increase is greater than 100% of
currently issued shares.

7. Harris will normally vote for proposals to increase authorized shares
with preemptive rights if the increase is less than 100% of currently
issued shares.

8. Harris will normally vote against proposals to increase authorized
shares without preemptive rights if the increase is greater than 20% of
currently issued shares.

9. Harris will normally vote for proposals to increase authorized shares
without preemptive rights if the increase is less than 20% of currently
issued shares.

ROUTINE CORPORATE MATTERS

Harris will generally vote in favor of routine business matters such as
approving a motion to adjourn the meeting, declaring final payment of
dividends, approving a change in the annual meeting date and location,
approving the minutes of a previously held meeting, receiving consolidated
financial statements, change of corporate name and similar matters. However, to
the extent that the voting recommendation of Institutional Investor Services
("ISS"), the Firm's proxy voting service provider, opposes the issuer's
management on the routine matter, the proposal will be submitted to the Proxy
Committee for determination.

SOCIAL RESPONSIBILITY ISSUES

Harris believes that matters related to a company's day-to-day business
operations are primarily the responsibility of management and should be
reviewed and supervised solely by the company's board of directors. Harris is
focused on maximizing long-term shareholder value and will typically vote
against shareholder proposals requesting that a company disclose or amend
certain business practices unless we believe a proposal would have a
substantial positive economic impact on the company.

CERTAIN OTHER ISSUES

Harris may also maintain Supplemental Proxy Voting Guidelines to address
certain proposals that are not as enduring as those listed above, but yet may
be presented repeatedly by issuers during a given proxy season. For example,
companies in a particular industry or country may be affected by a change in
the law that requires them to submit a one-time proxy proposal during the proxy
season. The Proxy Committee will determine which proposals will be included on
the list of Supplemental Proxy Voting Guidelines, and will update the list as
needed. The Proxy Committee will provide the list to research analysts and the
Proxy Administrator.

III. VOTING SHARES OF FOREIGN ISSUERS

Because foreign issuers are incorporated under the laws of countries outside
the United States, protection for and disclosures to shareholders may vary
significantly from jurisdiction to jurisdiction. Laws governing foreign

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Harris Associates L.P.

issuers may, in some cases, provide substantially less protection for
shareholders. As a result, the foregoing guidelines, which are premised on the
existence of a sound corporate governance and disclosure framework, may not be
appropriate under some circumstances for foreign issuers. Harris will generally
vote proxies of foreign issuers in accordance with the foregoing guidelines
where appropriate.

In some non-U.S. jurisdictions, sales of securities voted may be prohibited
for some period of time, usually between the record and meeting dates ("share
blocking"). Since these time periods are usually relatively short in light of
our long-term investment strategy, in most cases, share blocking will not
impact our voting decisions. However, there may be occasions where the loss of
investment flexibility resulting from share blocking will outweigh the benefit
to be gained by voting.

IV. CONFLICTS OF INTEREST

The Proxy Committee, in consultation with the Legal and Compliance
Departments, is responsible for monitoring and resolving possible material
conflicts of interest with respect to proxy voting. A conflict of interest may
exist, for example, when: (i) proxy votes regarding non-routine matters are
solicited by an issuer who has an institutional separate account relationship
with Harris or Harris is actively soliciting business from the issuer;
(ii) when we are aware that a proponent of a proxy proposal has a business
relationship with Harris or Harris is actively soliciting such business (E.G.,
an employee group for which Harris manages money); (iii) when we are aware that
Harris has business relationships with participants in proxy contests,
corporate directors or director candidates; or (iv) when we are aware that a
Harris employee has a personal interest in the outcome of a particular matter
before shareholders (E.G., a Harris executive has an immediate family member
who serves as a director of a company). Any employee with knowledge of any
conflict of interest relating to a particular proxy vote shall disclose that
conflict to the Proxy Committee. In addition, if any member of the Proxy
Committee has a conflict of interest, he or she will recuse himself or herself
from any consideration of the matter, and an alternate member of the committee
will act in his or her place.

Harris is committed to resolving any such conflicts in its clients'
collective best interest, and accordingly, we will vote pursuant to the
Guidelines set forth in this Proxy Voting Policy when conflicts of interest
arise. However, if we believe that voting in accordance with a Guideline is not
in the best interest of our clients under the particular facts and
circumstances presented, or if the proposal is not addressed by the Guidelines,
then we will vote in accordance with the guidance of ISS. If ISS has not
provided guidance with respect to the proposal or if we believe the
recommendation of ISS is not in the best interests of our clients, then the
Proxy Committee will refer the matter to (1) the Executive Committee of the
Board of Trustees of Harris Associates Investment Trust for a determination of
how shares held in The Oakmark Funds will be voted, and (2) the Proxy Voting
Conflicts Committee consisting of Harris' General Counsel, Chief Compliance
Officer and Chief Financial Officer for a determination of how shares held in
all other client accounts will be voted. Each of those committees will keep a
written record of the basis for its decision.

V. VOTING PROCEDURES

The following procedures have been established with respect to the voting of
proxies on behalf of all clients, including mutual funds advised by Harris, for
which Harris has voting responsibility.

PROXY VOTING COMMITTEE. The Proxy Voting Committee (the "Committee") is
responsible for recommending proxy voting guidelines, establishing and
maintaining policies and procedures for proxy voting, and ensuring compliance
with these policies and procedures. The Committee consists of three investment

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Harris Associates L.P.

professionals: one domestic portfolio manager, one domestic research analyst,
and one international research analyst. Committee members serve for three years
with members replaced on a rotating basis. New Committee members are nominated
by the Committee and confirmed in writing by Harris' Chief Executive Officer.
The Committee also has two alternate members (one domestic analyst and one
international analyst) either of who may serve in the absence of a regular
member of the Committee.

PROXY ADMINISTRATOR. The Proxy Administrator is an employee of Harris
reporting to the Chief Compliance Officer and is responsible for ensuring that
all votes are placed with the proxy voting service provider and that all
necessary records, as appropriate, are maintained reflecting such voting.

PROXY VOTING SERVICE PROVIDER. Harris has engaged ISS, an independent proxy
voting service provider, to assist in voting proxies. ISS provides the Firm
with information concerning shareholder meetings, electronic voting,
recordkeeping and reporting services, research with respect to companies, and
proxy voting guidance and recommendations.

VOTING DECISIONS. As described in the Proxy Voting Policy above, the Firm
has established proxy voting guidelines, including supplemental proxy voting
guidelines, on various issues. We will generally vote proxies in accordance
with these guidelines except as otherwise determined by the Proxy Committee.
The Proxy Administrator, or designated back-up, is responsible for alerting the
Firm's research analyst who follows the company about the proxy proposals. If
the analyst believes the proxy should be voted in accordance with the
Guidelines, he or she will vote the proposal accordingly and indicate his or
her initials in the appropriate location of the electronic ballot and submit
the vote for further processing by the Proxy Administrator. If the analyst
believes the proxy should be voted contrary to the Guidelines, he or she will
submit the proposal, along with his or her recommended vote and ISS's
recommended vote, if any, to the Proxy Committee, which reviews the proposal
and the analyst's recommendation and makes a voting decision by majority vote.
If a proposal is not explicitly addressed by the Guidelines but the analyst
agrees with the voting recommendation of ISS regarding that proposal, he or she
will vote the proxy in accordance with such recommendation and indicate his or
her initials in the appropriate location of the electronic ballot and submit
the vote for further processing by the Proxy Administrator. If a proposal is
not explicitly addressed by the Guidelines and the analyst believes the proxy
should be voted contrary to the ISS recommendation, he or she will submit the
proposal, along with his or her recommended vote and ISS's recommended vote to
the Proxy Committee, which reviews the proposal and the analyst's
recommendation and makes a voting decision by majority vote. If neither the
Guidelines nor ISS address the proxy proposal, the analyst will submit the
proposal and his or her recommended vote to the Proxy Committee, which makes a
voting decision by majority vote. That Proxy Committee decision is reflected in
the electronic ballot.

In the case where securities that are not on the Firm's Approved Lists of
domestic, international or small cap securities are held in managed accounts,
the Proxy Administrator, or designated back-up, will vote all shares in
accordance with the Firm's guidelines or, if the guidelines do not address the
particular issue, in accordance with the guidance of ISS.

In the case of a conflict of interest, the Proxy Administrator will vote in
accordance with the procedures set forth in the Conflicts of Interest
provisions described above.

VOTING BALLOTS. For shares held in The Oakmark Funds and other client
accounts, the MIS Department sends a daily holdings file to ISS detailing the
holdings in the Funds and other client accounts. ISS is responsible for
reconciling this information with the information it receives from the
custodians and escalating any

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Harris Associates L.P.

discrepancies to the attention of the Proxy Administrator. The Proxy
Administrator works with ISS and custodians to resolve any discrepancies to
ensure that all shares entitled to vote are voted.

RECORDKEEPING AND REPORTING. Much of Harris' recordkeeping and reporting is
maintained electronically on ISS's systems. In the event that records are not
held electronically within ISS's system, Harris will maintain records of proxy
voting proposals received, records of votes cast on behalf of clients, and any
documentation material to a proxy voting decision as required by law. Upon
request, or on an annual basis for ERISA accounts, Harris will provide clients
with the proxy voting record for that client's account. Beginning in August
2004, on an annual basis, Harris will make available the voting record for The
Oakmark Funds for the previous one-year period ended June 30/th/ on The Oakmark
Funds website.

Approved by the Proxy Voting Committee on February 11th, 2008

SECTION 10_1000

PROXY VOTING POLICIES AND PROCEDURES

AS OF MAY 1, 2007

Proxy voting is an important right of shareholders, and reasonable care and
diligence must be undertaken to ensure that such rights are properly and timely
exercised. When ING Clarion Real Estate Securities ("Clarion") has discretion
to vote the proxies of its clients, it will vote those proxies in the best
interest of its clients and in accordance with these policies and procedures.

It will be the responsibility of the Compliance Officer to keep a record of
each proxy received, forward the proxy to the appropriate analyst, and
determine which accounts managed by Clarion hold the security to which the
proxy relates. Additionally, the Compliance Officer will provide Clarion's
proxy voting agent, Institutional Shareholder Services ("ISS"), with a list of
accounts that hold the security, together with the number of votes each account
controls, and will coordinate with ISS and the analyst to ensure the vote
decision is processed in a timely fashion. The Compliance Officer will monitor
ISS to assure that all proxies are being properly voted and appropriate records
are being retained. ISS retains a copy of each proxy statement that ISS
receives on Clarion's behalf, and these statements will be available to Clarion
upon request. Additionally, Clarion will rely on ISS to retain a copy of the
votes cast, also available to Clarion upon request.

In the absence of specific voting guidelines from the client, Clarion will
vote proxies in the best interests of each particular client, which may result
in different voting results for proxies for the same issuer. The Compliance
Officer will identify any conflicts that exist between the interests of Clarion
and its clients. This examination will include a review of the relationship of
Clarion and its affiliates with the issuer of each security (and any of the
issuer's affiliates) to determine if the issuer is a client of Clarion, or an
affiliate of Clarion, or has some other relationship with Clarion or a client
of Clarion. If a material conflict exists, Clarion will determine whether
voting in accordance with the voting guidelines and factors described above is
in the best interests of the client. Clarion will also determine whether it is
appropriate to disclose the conflict to the affected clients and, except in the
case of clients that are subject to the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), will give the clients the opportunity to vote
their proxies themselves. In the case of ERISA clients, if the Investment
Management Agreement reserves to the ERISA client the authority to vote proxies
when Clarion determines it has a material conflict that affects its best
judgment as an ERISA fiduciary, Clarion will give the ERISA client the
opportunity to vote the proxies themselves.

The Compliance Officer will maintain files relating to Clarion's proxy
voting procedures in an easily accessible place. Records will be maintained and
preserved for five years from the end of the fiscal year during which the last
entry was made on a record, with records for the first two years kept in the
offices of Clarion. These files will include (1) copies of the proxy voting
policies and procedures and any amendments thereto, (2) a copy of any document
Clarion created that was material to making a decision how to vote proxies or
that memorializes that decision, and (3) a copy of each written client request
for information on how Clarion voted such client's proxies and a copy of any
written response to any (written or oral) client request for information on how
Clarion voted its proxies.

Clients may contact the Chief Compliance Officer, William Zitelli, via
e-mail at william.zitelli@ingclarion.com, or telephone (610) 995-8935, to
obtain a copy of these policies and procedures or to request information on
such client's proxies. A written response will list, with respect to each voted
proxy that the client has inquired about, (1) the name of the issuer, (2) the
proposal voted upon, and (3) how Clarion voted the client's proxy.

JANUS CAPITAL MANAGEMENT LLC

Proxy Voting Procedures
February 2008

The following represents the procedures for Janus Capital Management LLC
("Janus") with respect to the voting of proxies on behalf of all clients,
including mutual funds advised by Janus, for which Janus has voting
responsibility and the keeping of records relating to proxy voting.

GENERAL POLICY. Janus votes proxies in the best interest of its clients.
Janus will not accept direction as to how to vote individual proxies for which
it has voting responsibility from any other person or organization (other than
the research and information provided by the Proxy Voting Service (as
hereinafter defined)). Janus will only accept direction from a client to vote
proxies for that client's account pursuant to: 1) the Janus Capital Management
LLC Proxy Voting Guidelines ("Guidelines"); 2) the recommendations of The Risk
Metrics Group, formerly known as Institutional Shareholder Services (the "Proxy
Voting Service"); or 3) the recommendations of the Proxy Voting Service under
their Proxy Voter Services program.

ERISA PLAN POLICY. On behalf of client accounts subject to ERISA, Janus
seeks to discharge its fiduciary duty by voting proxies solely in the best
interest of the participants and beneficiaries of such plans. Janus recognizes
that the exercise of voting rights on securities held by ERISA plans for which
Janus has voting responsibility is a fiduciary duty that must be exercised with
care, skill, prudence and diligence. In voting proxies for ERISA accounts,
Janus will exercise its fiduciary responsibility to vote all proxies for shares
for which it has investment discretion as investment manager unless the power
to vote such shares has been retained by the appointing fiduciary as set forth
in the documents in which the named fiduciary has appointed Janus as investment
manager.

PROXY VOTING COMMITTEE. The Janus Proxy Voting Committee (the "Committee")
develops Janus' positions on all major corporate issues, creates guidelines and
oversees the voting process. The Committee is comprised of the Vice President
of Investment Accounting, the Assistant Vice President of Compliance, and a
Portfolio Management representative (or their designees). Internal legal
counsel serves as a consultant to the Committee and is a non-voting member. A
quorum is required for all Committee meetings. In creating proxy voting
recommendations, the Committee analyzes proxy proposals, from the Proxy Voting
Service, from the prior year and evaluates whether those proposals would
adversely or beneficially affect shareholders' interests. Once the Committee
establishes its recommendations, they are distributed to Janus' portfolio
managers/1/ for review and comment. Following portfolio manager input on the
recommendations, they are implemented as the Guidelines. While the Committee
sets the Guidelines and serves as a resource for Janus portfolio management, it
does not have proxy voting authority for any proprietary or non-proprietary
mutual fund or any investment advisory client. The portfolio managers are
responsible for proxy votes on securities they own in the portfolios they
manage. Most portfolio managers vote consistently with the Guidelines. However,
a portfolio manager may choose to vote contrary to the Guidelines. When
portfolio managers cast votes which are contrary to the Guidelines, the manager
is required to document the reasons in writing for the Committee. In many
cases, a security may be held by multiple portfolio managers. Portfolio
managers are not required to cast consistent votes. Annually the Janus Funds
Board of Trustees, or a committee thereof, will review Janus' proxy voting
process, policies and voting records.

INVESTMENT ACCOUNTING GROUP. The Investment Accounting Group is responsible
for administering the proxy voting process as set forth in these procedures and
the Guidelines. The Proxy Administrator in the Investment Accounting Group
works with the Proxy Voting Service and is responsible for ensuring that all
meeting notices are reviewed against the Guidelines and proxy matters are
communicated to the portfolio managers and analysts for consideration pursuant
to the Guidelines.

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/1/ All references to portfolio managers include assistant portfolio managers.

VOTING AND USE OF PROXY VOTING SERVICE. Janus has engaged an independent
proxy voting service, the Proxy Voting Service, to assist in the voting of
proxies. The Proxy Voting Service is responsible for coordinating with the
clients' custodians to ensure that all proxy materials received by the
custodians relating to the clients' portfolio securities are processed in a
timely fashion. In addition, the Proxy Voting Service is responsible for
maintaining copies of all proxy statements received by issuers and to promptly
provide such materials to Janus upon request.

To the extent applicable, the Proxy Voting Service will process all proxy
votes in accordance with the Guidelines. Portfolio managers may decide to vote
their proxies consistent with the Guidelines and instruct the Proxy
Administrator to vote all proxies accordingly. In such cases, he or she may
request to review the vote recommendations and sign-off on all the proxies
before the votes are cast, or may choose to only sign-off on those votes cast
against management. The portfolio managers are also given the option of
reviewing and determining the votes on all proxies without utilizing the
Guidelines. In all cases, the portfolio managers may elect to receive a weekly
report summarizing all proxy votes in his or her client accounts. The Proxy
Administrator is responsible for maintaining this documentation. If the Proxy
Administrator does not receive a voting instruction from a Portfolio Manager,
and the Guidelines require Portfolio Manager input on the issue, the vote will
be cast by the Chief Investment Officer(s) or the Director of Research.

The Proxy Voting Service will refer proxy questions to the Proxy
Administrator for instructions under circumstances where: (1) the application
of the Guidelines is unclear; (2) the proxy question relates to a company
and/or issue in which the Proxy Voting Services does not have research,
analysis and/or a recommendation available, or (3) the Guidelines call for
Janus portfolio manager input. The Proxy Administrator solicits feedback from
the Portfolio Manager or the Committee as required. Janus also utilizes
research services relating to proxy questions provided by the Proxy Voting
Service.

PROCEDURES FOR PROXY ISSUES OUTSIDE THE GUIDELINES. In situations where the
Proxy Voting Service refers a proxy question to the Proxy Administrator, the
Proxy Administrator will consult with the portfolio manager regarding how the
shares will be voted. The Proxy Administrator will refer such questions,
through a written request, to the portfolio manager(s) who hold(s) the security
for a voting recommendation. The Proxy Administrator may also refer such
questions, through a written request to any member of the Committee, but the
Committee cannot direct the Proxy Administrator how to vote. If the proxy issue
raises a conflict of interest (see Conflict of Interest discussion below), the
portfolio manager will document how the proxy should be voted and the rationale
for such recommendation. If the portfolio manager has had any contact with
persons outside of Janus (excluding routine communications with proxy
solicitors) regarding the proxy issue, the portfolio manager will disclose that
contact to the Committee. The Committee will review the portfolio manager's
voting recommendation. If the Committee believes a conflict exists and that the
portfolio manager's voting recommendation is not in the best interests of the
shareholders, the Committee will refer the issue to the Janus Chief Investment
Officer(s) (or the Director of Research in his/her absence) to determine how to
vote.

PROCEDURES FOR VOTING JANUS "FUND OF FUNDS". Janus advises certain
portfolios or "fund of funds" that invest in other Janus funds. From time to
time, a fund of funds may be required to vote proxies for the underlying Janus
funds in which it is invested. Accordingly, if an underlying Janus fund submits
a matter to a vote of its shareholders, votes for and against such matters on
behalf of the owner fund of funds will be cast in the same proportion as the
votes of the other shareholders in the underlying fund (also know as
"echo-voting").

CONFLICTS OF INTEREST. The Committee is responsible for monitoring and
resolving possible material conflicts with respect to proxy voting. Because the
Guidelines are pre-determined and designed to be in the best interests of
shareholders, application of the Guidelines to vote client proxies should, in
most cases, adequately address any possible conflicts of interest. In instances
where a portfolio manager proposes to vote a proxy inconsistent with the
Guidelines, the Committee will review the proxy votes to determine whether the
portfolio manager's voting rationale appears reasonable and no material
conflict exists.

A conflict of interest may exist, for example, if Janus has a business
relationship with (or is actively soliciting business from) either the company
soliciting the proxy or a third party that has a material interest in the
outcome of a proxy vote or that is actively lobbying for a particular outcome
of a proxy vote. In addition, any portfolio manager with knowledge of a
personal conflict of interest (i.e., a family member in a company's management)
relating to a particular referral item shall disclose that conflict to the
Committee and may be required to recuse himself or herself from the proxy
voting process. Issues raising possible conflicts of interest are referred by
the Proxy Administrator to the Committee for resolution. If the Committee does
not agree that the portfolio manager's rationale is reasonable, the Committee
will refer the matter to the Chief Investment Officer(s) (or the Director of
Research) to vote the proxy.

If a matter is referred to the Chief Investment Officer(s) (or the Director
of Research) the decision made and basis for the decision will be documented by
the Committee.

REPORTING AND RECORD RETENTION. Upon request, on an annual basis, Janus will
provide its non-mutual fund clients with the proxy voting record for that
client's account. On an annual basis, Janus will provide its proxy voting
record for each proprietary mutual fund for the one-year period ending on
June 30/th/ on Janus' website.

Janus retains proxy statements received regarding client securities, records
of votes cast on behalf of clients, records of client requests for proxy voting
information and all documents prepared by Janus regarding votes cast in
contradiction to the Janus Guidelines. In addition, any document prepared by
Janus that is material to a proxy voting decision such as the Guidelines, Proxy
Voting Committee materials and other internal research relating to voting
decisions will be kept. Proxy statements received from issuers are either
available on the SEC's EDGAR database or are kept by a third party voting
service and are available on request. All proxy voting materials and supporting
documentation are retained for a minimum of 6 years.

February 2008

JANUS CAPITAL MANAGEMENT LLC
PROXY VOTING GUIDELINES

The Janus Proxy Voting Guidelines (the "Guidelines") below summarize Janus
Capital Management LLC's ("Janus") positions on various issues of concern to
investors and give a general indication of how portfolio securities will be
voted on proposals dealing with particular issues. The Guidelines, together
with the Janus Proxy Voting Procedures (the "Procedures"), will be used for
voting proxies on behalf of all Janus clients (including mutual funds) for
which Janus has voting authority. Janus will only accept direction from a
client to vote proxies for that client's account pursuant to: 1) the
Guidelines; 2) the recommendations of the Risk Metrics Group, formerly known as
Institutional Shareholder Services (the "Proxy Voting Service"); or 3) the
recommendations of the Proxy Voting Service under their Proxy Voter Services
program.

Janus has retained the services of the Proxy Voting Service, an industry
expert in proxy issues and corporate governance matters. The Proxy Voting
Service provides Janus with in-depth analysis and recommendations on complex
proxy issues. While Janus attempts to apply the following Guidelines to proxy
proposals, Janus reserves the right to use the Proxy Voting Service's expertise
and recommendations on more complex issues, including: executive compensation,
foreign issuer proxies, and proposals that may not otherwise be addressed by
the Guidelines. The Proxy Voting Service is instructed to vote all proxies
relating to portfolio securities in accordance with these Guidelines, except as
otherwise instructed by Janus. The Proxy Voting Service, may not, in all
instances, have or provide research, analysis and recommendations on proxy
issues. For example, the Proxy Voting Service may not provide such analysis and
research for privately held companies. In such instances, the Proxy
Administrator shall refer such proxy proposal to the portfolio manager.

The Guidelines are not exhaustive and do not include all potential voting
issues. Because proxy issues and the circumstances of individual companies are
so varied, there may be instances when Janus may not vote in strict adherence
to the Guidelines. In addition, Janus portfolio managers and assistant
portfolio managers are responsible for monitoring significant corporate
developments, including proxy proposals submitted to shareholders and notifying
the Proxy Administrator in the Investment Accounting Group of circumstances
where the interests of Janus' clients may warrant a vote contrary to the
Guidelines. In such instances, the portfolio manager or assistant portfolio
manager will submit a written rationale to the Proxy Voting Committee. The
Proxy Voting Committee reviews the rationale to determine: i) whether the
rationale appears reasonable; and ii) whether any business relationship with
the issuer of the proxy could have created a conflict of interest influencing
the vote (see Procedures for additional Conflicts of Interest details).

In many foreign markets, shareholders who vote proxies for shares of a
foreign issuer are not able to trade in that company's stock within a given
period of time on or around the shareholder meeting date. This practice is
known as "share blocking." In countries where share blocking is practiced,
Janus will only vote proxies if the portfolio manager or assistant portfolio
manager determines that the shareholder benefit of voting the proxies outweighs
the risk of not being able to sell the securities. In addition, international
issuers may be subject to corporate governance standards and a proxy
solicitation process that substantially differs from domestic standards and
practices. Janus will generally vote international issuer proxies using the
Guidelines unless; the application of the Guidelines is inconsistent with
corporate governance standards and practices in the foreign market, in which
case Janus may refer to the research, analysis and recommendations provided by
the Proxy Voting Service.

The Janus funds participate in a securities lending program under which
shares of an issuer may be on loan while that issuer is conducting a proxy
solicitation. Generally, if shares of an issuer are on loan during a proxy
solicitation, a fund cannot vote the shares. Janus fund managers have
discretion to instruct the Proxy Administrator to pull back lent shares before
proxy record dates and vote proxies.

In circumstances where the Janus funds held a security as of record date,
but Janus sells its holdings prior to the shareholder meeting, Janus will
abstain from voting that proxy.

The following guidelines are grouped according to the types of proposals
generally presented to shareholders.

Board of Directors Issues

The quality of management is a key consideration in the decision to invest
in a company. Because management is in the best possible position to evaluate
the qualifications and needs of a particular board, Janus considers the
recommendation of management to be an important factor in making these
decisions.

1. For domestic market and applicable foreign market issuers, Janus will
generally vote in favor of slates of director candidates that have a majority
of independent directors (as determined by the Proxy Voting Service) and
oppose slates of director candidates that do not have a majority independent
director.

2. After taking into consideration country-specific practices, Janus will
generally vote in favor of uncontested director candidates, unless they:

. attend less than 75% of the board and committee meetings without a valid
excuse;

. ignore or otherwise fail to support shareholder proposals that are
approved by a majority of the shares outstanding;

. are non-independent directors and sit on the audit, compensation or
nominating committees;

. are non-independent directors and the board does not have an audit,
compensation, or nominating committees;

. are audit committee members and the non-audit fees paid to the auditor
are excessive (as determined by the Proxy Voting Service);

. are audit committee members and the company has been deemed to have
serious material weaknesses in its internal controls (as determined by
the Proxy Voting Service);

. serve as directors on an excessive number of boards ("Overboarded") (as
determined by the Proxy Voting Service); or

. are compensation committee members and the company has poor compensation
practices (as determined by the Proxy Voting Service).

3. Janus will evaluate proposals relating to contested director candidates
and/or contested slates of directors on case-by-case basis./*/

4. Janus will generally vote in favor of proposals to increase the minimum
number of independent directors.

5. Janus believes that attracting qualified director candidates is
important to overall company success and effective corporate governance. As
such, Janus will generally vote in favor of proposals regarding director
indemnification arrangements.

6. Janus will generally vote in favor of proposals to increase the size of
a board of directors so long as the board has a majority independent
directors.

7. If the purpose of the proposal is to promote anti-takeover measures,
Janus will generally vote against proposals relating to decreasing the size
of a board of directors.

8. Janus will generally vote against proposals advocating classified or
staggered boards of directors.

9. Janus will generally vote with management regarding proposals to
declassify a board.

10. Janus will generally vote in favor of proposals to separate the role of
the Chairman from the role of the CEO.

Auditors

11. Janus will vote in favor of proposals asking for approval of auditors,
unless: (1) an auditor has a financial interest in or association with the
company, and is therefore not independent; (2) fees for non-audit services
are excessive (as determined by the Proxy Voting Service); or (3) there is
reason to believe that the independent auditor has rendered an opinion, which
is neither accurate nor indicative of the company's financial position.

12. Janus will evaluate proposals relating to contested auditors on a
case-by-case basis./*/

13. Janus will generally vote in favor of proposals to appoint internal
statutory auditors.

Equity Based Compensation Plans

Equity based compensation plans are important tools in attracting and
retaining desirable employees. Janus believes these plans should be carefully
applied with the intention of maximizing shareholder value. With this in mind,
Janus will evaluate proposals relating to executive and director compensation
plans on a case-by-case basis.

Janus will assess the potential cost of an equity based compensation plan
using the research provided by the Proxy Voting Service. The research is
designed to estimate the total cost of a proposed plan and identify factors
that demonstrate good stewardship of investors' interests regarding executive
compensation. The Proxy Voting Service evaluates whether the estimated cost is
reasonable by comparing the cost to an allowable cap. The allowable cap is
industry-specific, market cap-based, and pegged to the average amount paid by
companies performing in the top quartile of their peer groups. If the proposed
cost is above the allowable cap, Janus will generally vote against the plan.

In addition, Janus will generally oppose plans that:

. provide for re-pricing of underwater options;

. provide for automatic replenishment ("evergreen") or reload options;

. create an inconsistent relationship between long term share performance
and compensation increases; and/or

. are proposed by management and do not demonstrate good stewardship of
investors' interests regarding executive compensation (as determined by
the Proxy Voting Service).

Other Compensation Related Proposals

14. Janus will generally vote in favor of proposals relating to ESPPs--so
long as shares purchased through plans are priced no less than 15% below
market value.

15. Janus will generally vote in favor of proposals requiring the expensing
of options.

16. Janus will generally oppose proposals requesting approval to make
material amendments to equity based compensation plans without shareholder
approval.

17. Janus will generally oppose proposals regarding the re-pricing of
underwater options.

18. Janus will generally oppose proposals requesting approval of loans to
officers, executives and board members of an issuer.

19. Janus will generally oppose proposals requesting approval of automatic
share replenishment ("evergreen") features of equity based compensation plans.

20. Janus will generally oppose the issuance of reload options (stock
option that is automatically granted if an outstanding stock option is
exercised during a window period).

21. Janus will vote in favor of proposals to require golden parachutes or
executive severance agreements to be submitted for shareholder ratification,
unless the proposal requires shareholder approval PRIOR to entering into
employment contracts.

22. Janus will vote on a case-by-case basis on proposals to ratify or
cancel golden or tin parachutes. An acceptable parachute should include the
following:

. The parachute should be less attractive than an ongoing employment
opportunity with the firm;

. The triggering mechanism should be beyond the control of management; and

. The amount should not exceed three times base salary plus guaranteed
benefits.

23. Janus will generally vote in favor of proposals intended to increase
long-term stock ownership by executives, officers and directors. These may
include:

. requiring executive officers and directors to hold a minimum amount of
stock in the company;

. requiring stock acquired through exercised options to be held for a
certain period of time; and

. using restricted stock grants instead of options.

Other Corporate Matters

24. Janus will generally vote in favor of proposals relating to the
issuance of dividends and stock splits.

25. Janus will generally vote against proposals regarding supermajority
voting rights (for example to approve acquisitions or mergers).

26. Janus will generally oppose proposals for different classes of stock
with different voting rights.

27. Janus will evaluate proposals relating to issuances with and without
preemptive rights on a case-by-case basis. For foreign issuer proxies, Janus
will solicit research from the Proxy Voting Service./*/

28. Janus will generally vote against proposals seeking to implement
measures designed to prevent or obstruct corporate takeovers (includes
"poison pills").

29. Janus will evaluate proposals seeking to increase the number of shares
of common stock authorized for issue on a case-by-case basis. For domestic
issuers, Janus will use quantitative criteria provided by the Proxy Voting
Service to measure the reasonableness of the proposed share increase as
compared against a measure of industry peers. For foreign issuer proxies,
Janus will solicit research from the Proxy Voting Service.

30. Janus will evaluate proposals regarding the issuance of debt, including
convertible debt, on a case-by-case basis./*/

31. Janus will generally vote in favor of proposals regarding the
authorization of the issuer's Board of Directors to repurchase shares.

32. Janus will evaluate plans of reorganization on a case-by-case basis./*/

33. Janus will generally vote in favor of proposals regarding changes in
the state of incorporation of an issuer.

34. Janus will generally vote in favor of proposals regarding changes in
company name.

35. Janus will evaluate proposals relating to the continuance of a company
on a case-by-case basis./*/

36. Janus will evaluate proposals regarding acquisitions, mergers, tender
offers or changes in control on a case-by-case basis./*/

37. Janus will generally oppose proposals to authorize preferred stock
whose voting, conversion, dividend and other rights are determined at the
discretion of the Board of Directors when the stock is issued ("blank check
stock").

38. Janus will generally vote in favor of proposals to lower the barriers
to shareholder action (i.e., limited rights to call special meetings, limited
rights to act by written consents).

39. Janus will generally vote in favor of proposals to adopt cumulative
voting unless otherwise recommended by the Proxy Voting Service.

40. Janus will generally vote in favor of proposals to require that voting
be confidential.

41. Janus will generally oppose proposals requesting authorization of
political contributions (mainly foreign).

42. Janus will generally vote in favor of proposals relating to the
administration of an annual shareholder meeting.

43. Janus will vote against proposals to approve "other business" when it
appears as voting item.

Shareholder Proposals

Janus Capital is primarily concerned with the economic impact of shareholder
proposals on a company's short and long-term share value. Janus will generally
apply the Guidelines to shareholder proposals while weighing the following
considerations:

44. Janus will generally abstain from voting on shareholder proposals that
relate to social, moral or ethical issues, or issues that place arbitrary
constraints on the board or management of a company.

45. For shareholder proposals outside the scope of the Guidelines, Janus
will solicit additional research and a recommendation from the Proxy Voting
Service. Janus will always reserve the right to over-ride a recommendation
provided by the Proxy Voting Service.*

- - --------
* All discretionary votes of this nature are cast solely in the interests of
shareholders and without regard to any other Janus relationship, business or
otherwise.

PROXY VOTING POLICY OF
LAZARD ASSET MANAGEMENT LLC

A. INTRODUCTION

As a fiduciary, Lazard Asset Management LLC ("Lazard") is obligated to vote
proxies in the best interests of its clients. Lazard has developed a structure
that is designed to ensure that proxy voting is conducted in an appropriate
manner, consistent with clients' best interest, and within the framework of
this Proxy Voting Policy (the "Policy"). Lazard has adopted this Policy in
order to satisfy its fiduciary obligation. It is intended that this Policy also
satisfy the requirements of Rule 206(4)-6 under the Investment Advisers Act of
1940, as amended (the "Advisers Act").

Lazard manages assets for a variety of clients, including individuals,
Taft-Hartley plans, governmental plans, foundations and endowments,
corporations, and investment companies and other collective investment
vehicles. Absent specific client guidelines, Lazard's policy is to vote proxies
on a given issue the same for all of its clients. This Policy is based on the
view that Lazard, in its role as investment adviser, must vote proxies based on
what it believes will maximize shareholder value as a long-term investor, and
the votes that it casts on behalf of all its clients are intended to accomplish
that objective.

This Policy recognizes that there may be times when meeting agendas or
proposals may create the appearance of a material conflict of interest for
Lazard. When such a conflict may appear, Lazard will seek to alleviate the
potential conflict by voting consistent with pre-approved guidelines or, in
situations where the pre-approved guideline is to vote case-by-case, with the
recommendation of an independent source. More information on how Lazard handles
conflicts is provided in Section F of this Policy.

B. RESPONSIBILITY TO VOTE PROXIES

Generally, Lazard is willing to accept delegation from its clients to vote
proxies. Lazard does not delegate that authority to any other person or entity,
but retains complete authority for voting all proxies on behalf of its clients.
Not all clients delegate proxy-voting authority to Lazard, however, and Lazard
will not vote proxies, or provide advice to clients on how to vote proxies, in
the absence of a specific delegation of authority or an obligation under
applicable law. For example, securities that are held in an investment advisory
account, for which Lazard exercises no investment discretion, are not voted by
Lazard, nor are shares that the client has authorized their custodian bank to
use in a stock loan program, which passes voting rights to the party with
possession of the shares.

C. GENERAL ADMINISTRATION

1. OVERVIEW

Lazard's proxy voting process is administered by its Proxy Operations
Department ("ProxyOps"), which reports to Lazard's Chief Operations Officer.
Oversight of the process is provided by Lazard's Legal/Compliance Department
and by a Proxy Committee currently consisting of Michael Powers, Managing
Director and a Portfolio Manager for Lazard's international equity products,
Richard Tutino, Managing Director and a Portfolio Manager for Lazard's U.S.
equity products, Mark Little, Director and European Portfolio Manager, and
Melissa Cook, Managing Director and Lazard's Global Head of Research. The Proxy
Committee meets at least semi-annually to review this Policy and consider
changes to it, as well as specific proxy voting guidelines (the "Approved
Guidelines"), which are discussed below. Meetings may be convened more
frequently (for example, to discuss a specific proxy agenda or proposal) as
requested by the Manager of ProxyOps, any member of the Proxy Committee, or
Lazard's General Counsel or Chief Compliance Officer. A representative of
Lazard's Legal/Compliance Department must be present at all Proxy Committee
meetings.

2. ROLE OF THIRD PARTIES

To assist it in its proxy-voting responsibilities, Lazard currently
subscribes to several research and other proxy-related services offered by
Institutional Shareholder Services, Inc. ("ISS"), one of the world's largest
providers of proxy-voting services. ISS provides Lazard with its independent
analysis and recommendation regarding virtually every proxy proposal that
Lazard votes on behalf of its clients, with respect to both U.S. and non-U.S.
securities.

ISS provides other proxy-related administrative services to Lazard. ISS
receives on Lazard's behalf all proxy information sent by custodians that hold
securities of Lazard's clients. ISS posts all relevant information regarding
the proxy on its password-protected website for Lazard to review, including
meeting dates, all agendas and ISS's analysis. ProxyOps reviews this
information on a daily basis and regularly communicates with representatives of
ISS to ensure that all agendas are considered and proxies are voted on a timely
basis. ISS also provides Lazard with vote execution, recordkeeping and
reporting support services.

3. VOTING PROCESS

Lazard's Proxy Committee has approved specific proxy voting guidelines
regarding various common proxy proposals (the "Approved Guidelines"). As
discussed more fully below in Section D of this Policy, depending on the
proposal, the Approved Guideline may provide that Lazard should vote for or
against the proposal, or that the proposal should be considered on a
case-by-case basis.

Where the Approved Guideline for a particular type of proxy proposal is to
vote on a case-by case basis, Lazard believes that input from a portfolio
manager or research analysts with knowledge of the issuer and its securities
(collectively, "Portfolio Management") is essential. Portfolio Management is,
in Lazard's view, best able to evaluate the impact that the outcome on a
particular proposal will have on the value of the issuer's shares.
Consequently, the Manager of ProxyOps seeks Portfolio Management's
recommendation on how to vote all such proposals.

In seeking Portfolio Management's recommendation, the Manager of ProxyOps
provides ISS's recommendation and analysis. Portfolio Management provides the
Manager of ProxyOps with its recommendation and the reasons behind it. ProxyOps
will generally vote as recommended by Portfolio Management, subject to
situations where there may appear to be a material conflict of interest, in
which case an alternative approach may be followed. (See Section F, below.)
Depending on the facts surrounding a particular case-by-case proposal, or
Portfolio Management's recommendation on a case-by-case proposal, the Manager
of ProxyOps may consult with Lazard's Chief Compliance Officer or General
Counsel, and may seek the final approval of the Proxy Committee regarding
Portfolio Management's recommendation. If necessary, a meeting of the Proxy
Committee will be convened to discuss the proposal and reach a final decision
on Lazard's vote.

ProxyOps generally votes all routine proposals (described below) according
to the Approved Guidelines. For non-routine proposals where the Approved
Guideline is to vote for or against, ProxyOps will provide Portfolio Management
both the Approved Guideline, as well as ISS's recommendation and analysis.
Unless Portfolio Management disagrees with the Approved Guideline for the
specific proposal, ProxyOps will generally vote the proposal according to the
Approved Guideline. If Portfolio Management disagrees, however, it will provide
its reason for doing so. All the relevant information will be provided to the
Proxy Committee members for a final determination of such non-routine items. It
is expected that the final vote will be cast according to the Approved
Guideline, absent a compelling reason for not doing so, and subject to
situations where there may be the appearance of a material conflict of
interest, in which case an alternative approach may be followed. (See Section
F, below.)

D. SPECIFIC PROXY ITEMS

Shareholders receive proxies involving many different proposals. Many
proposals are routine in nature, such as a non-controversial election of
Directors or a change in a company's name. Others are more complicated, such

as items regarding corporate governance and shareholder rights, changes to
capital structure, stock option plans and other executive compensation issues,
mergers and other significant transactions and social or political issues.
Following are the Approved Guidelines for a significant proportion of the proxy
proposals on which Lazard regularly votes. Of course, other proposals may be
presented from time to time. Those proposals will be discussed with the Proxy
Committee to determine how they should be voted and, if it is anticipated that
they may re-occur, to adopt an Approved Guideline.

1. ROUTINE ITEMS

Lazard generally votes routine items as recommended by the issuer's
management and Board of Directors, and against any shareholder proposals
regarding those routine matters, based on the view that management is in a
better position to evaluate the need for them. Lazard considers routine items
to be those that do not change the structure, charter, bylaws, or operations of
an issuer in any way that is material to shareholder value. Routine items
generally include:

. routine election or re-election of Directors;

. appointment or election of auditors, in the absence of any controversy
or conflict regarding the auditors;

. issues relating to the timing or conduct of annual meetings; and

. name changes.

2. CORPORATE GOVERNANCE AND SHAREHOLDER RIGHTS MATTERS

Many proposals address issues related to corporate governance and
shareholder rights. These items often relate to the Board of Directors and its
committees, anti-takeover measures, and the conduct of the company's
shareholder meetings.

A. BOARD OF DIRECTOR AND ITS COMMITTEES

Lazard votes in favor of provisions that it believes will increase the
effectiveness of an issuer's Board of Directors. Lazard believes that in most
instances, the Board and the issuer's management are in the best position to
make the determination how to best increase the Board's effectiveness. Lazard
does not believe that establishing burdensome requirements regarding a Board
will achieve this objective. Lazard has Approved Guidelines to vote:

. FOR the establishment of an independent nominating committee, audit
committee or compensation committee of a Board of Directors;

. FOR a requirement that a substantial majority (e.g. 2/3) of a US or
UK company's Directors be independent;

. ON A CASE-BY-CASE BASIS regarding the election of Directors where the
Board does not have independent "key committees" or sufficient
independence;

. FOR proposals that the Board's committees be comprised solely of
independent Directors or consist of a majority of independent
directors;

. FOR proposals to limit Directors' liability; broaden indemnification
of Directors; and approve indemnification agreements for officers and
Directors, UNLESS doing so would affect shareholder interests in a
specific pending or threatened litigation; or for indemnification due
to negligence in these cases voting is ON A CASE-BY-CASE BASIS;

. FOR proposals seeking to de-classify a Board and AGAINST proposals
seeking to classify a Board;

. ON A CASE-BY-CASE BASIS on all proposals relating to cumulative
voting;

. AGAINST shareholder proposals, absent a demonstrable need, proposing
the establishment of additional committees; and ON A CASE-BY-CASE
BASIS regarding the establishment of shareholder advisory committees.

. AGAINST shareholder proposals seeking union or special-interest
representation on the Board;

. AGAINST shareholder proposals seeking to establish term limits or age
limits for Directors;

. ON A CASE-BY-CASE BASIS on shareholder proposals seeking to require
that the issuer's Chairman and Chief Executive Officer be different
individuals;

. AGAINST shareholder proposals seeking to establish Director
stock-ownership requirements; and

. AGAINST shareholder proposals seeking to change the size of a Board,
requiring women or minorities to serve on a Board, or requiring two
candidates for each Board seat.

B. ANTI-TAKEOVER MEASURES

Certain proposals are intended to deter outside parties from taking control
of a company. Such proposals could entrench management and adversely affect
shareholder rights and the value of the company's shares. Consequently, Lazard
has adopted Approved Guidelines to vote:

. AGAINST proposals to adopt supermajority vote requirements, or
increase vote requirements, for mergers or for the removal of
directors;

. ON A CASE-BY-CASE BASIS regarding shareholder rights plans (also
known as "poison pill plans") and FOR proposals seeking to require
all poison pill plans be submitted to shareholder vote;

. AGAINST proposals seeking to adopt fair price provisions and FOR
proposals seeking to rescind them;

. AGAINST "blank check" preferred stock; and

. ON A CASE-BY-CASE BASIS regarding other provisions seeking to amend a
company's by-laws or charter regarding anti-takeover provisions.

C. CONDUCT OF SHAREHOLDER MEETINGS

Lazard generally opposes any effort by management to restrict or limit
shareholder participation in shareholder meetings, and is in favor of efforts
to enhance shareholder participation. Lazard has therefore adopted Approved
Guidelines to vote:

. AGAINST proposals to adjourn meetings;

. AGAINST proposals seeking to eliminate or restrict shareholders'
right to call a special meeting;

. FOR proposals providing for confidential voting;

. AGAINST efforts to eliminate or restrict right of shareholders to act
by written consent;

. AGAINST proposals to adopt supermajority vote requirements, or
increase vote requirements, and

. ON A CASE-BY-CASE BASIS on changes to quorum requirements.

3. CHANGES TO CAPITAL STRUCTURE

Lazard receives many proxies that include proposals relating to a company's
capital structure. These proposals vary greatly, as each one is unique to the
circumstances of the company involved, as well as the general economic and
market conditions existing at the time of the proposal. The Board and
management may have many legitimate business reasons in seeking to effect
changes to the issuer's capital structure, including

raising additional capital for appropriate business reasons, cash flow and
market conditions. Lazard generally believes that these decisions are best left
to management, absent apparent reasons why they should not be. Consequently,
Lazard has adopted Approved Guidelines to vote:

. FOR management proposals to increase or decrease authorized common or
preferred stock (unless it is believed that doing so is intended to
serve as an anti-takeover measure);

. FOR stock splits and reverse stock splits;

. ON A CASE-BY-CASE BASIS on matters affecting shareholder rights, such
as amending votes-per-share;

. ON A CASE-BY-CASE BASIS on management proposals to issue a new class
of common or preferred shares;

. FOR management proposals to adopt or amend dividend reinvestment
plans;

. AGAINST changes in capital structure designed to be used in poison
pill plans; and

. ON A CASE-BY-CASE BASIS on proposals seeking to approve or amend
stock ownership limitations or transfer restrictions.

4. STOCK OPTION PLANS AND OTHER EXECUTIVE COMPENSATION ISSUES

Lazard supports efforts by companies to adopt compensation and incentive
programs to attract and retain the highest caliber management possible, and to
align the interests of the Board, management and employees with those of
shareholders. Lazard favors programs intended to reward management and
employees for positive, long-term performance. However, Lazard will evaluate
whether it believes, under the circumstances, that the level of compensation is
appropriate or excessive. Lazard has Approved Guidelines to vote:

. ON A CASE-BY-CASE BASIS regarding all stock option plans;

. AGAINST restricted stock plans that do not involve any performance
criteria;

. FOR employee stock purchase plans;

. ON A CASE-BY-CASE BASIS for stock appreciation rights plans;

. FOR deferred compensation plans;

. AGAINST proposals to approve executive loans to exercise options;

. AGAINST proposals to re-price underwater options;

. ON A CASE-BY-CASE BASIS regarding shareholder proposals to eliminate
or restrict severance agreements, and FOR proposals to submit
severance agreements to shareholders for approval; and

. AGAINST proposals to limit executive compensation or to require
executive compensation to be submitted for shareholder approval,
unless, with respect to the latter submitting compensation plans for
shareholder approval is required by local law or practice.

5. MERGERS AND OTHER SIGNIFICANT TRANSACTIONS

Shareholders are asked to consider a number of different types of
significant transactions, including mergers, acquisitions, sales of all or
substantially all of a company's assets, reorganizations involving business
combinations and liquidations. Each of these transactions is unique. Therefore,
Lazard's Approved Guideline is to vote on each of these transactions ON A
CASE-BY-CASE BASIS.

6. SOCIAL AND POLITICAL ISSUES

Proposals involving social and political issues take many forms and cover a
wide array of issues. Some examples are: adoption of principles to limit or
eliminate certain business activities, or limit or eliminate business

activities in certain countries; adoption of certain conservation efforts;
reporting of charitable contributions or political contributions or activities;
or the adoption of certain principles regarding employment practices or
discrimination policies. These items are often presented by shareholders and
are often opposed by the company's management and its Board of Directors.

Lazard generally supports the notion that corporations should be expected to
act as good citizens, but, as noted above, is obligated to vote on social and
political proposals in a way that it believes will most increase shareholder
value. As a result, Lazard has adopted Approved Guidelines to vote ON A
CASE-BY-CASE BASIS for most social and political issue proposals. Lazard will
generally vote FOR the approval of anti-discrimination policies.

E. VOTING NON-U.S. SECURITIES

Lazard invests in non-U.S. securities on behalf of many clients. Laws and
regulations regarding shareholder rights and voting procedures differ
dramatically across the world. In certain countries, the requirements or
restrictions imposed before proxies may be voted may outweigh any benefit that
could be realized by voting the proxies involved. For example, certain
countries restrict a shareholder's ability to sell shares for a certain period
of time if the shareholder votes proxies at a meeting (a practice known as
"share blocking"). In other instances, the costs of voting a proxy (i.e., by
being required to send a representative to the meeting) may simply outweigh any
benefit to the client if the proxy is voted. The Manager of ProxyOps will
consult with Portfolio Management to determine whether they believe it is in
the interest of the clients to vote the proxies. In these instances, the Proxy
Committee will have the authority to decide that it is in the best interest of
its clients not to vote the proxies.

F. CONFLICTS OF INTEREST

1. OVERVIEW

Lazard is required to vote proxies in the best interests of its clients. It
is essential, therefore, that material conflicts of interest or the appearance
of a material conflict be avoided.

Potential conflicts of interest are inherent in Lazard's organizational
structure and in the nature of its business. Following are examples of
situations that could present a conflict of interest or the appearance of a
conflict of interest:

. Lazard Freres & Co. LLC ("LF&Co."), Lazard's parent and a registered
broker-dealer, or an investment banking affiliate has an investment
banking relationship with a company the shares of which are held in
accounts of Lazard clients, and has provided services to the company
with respect to an upcoming significant proxy proposal (i.e., a merger
or other significant transaction);

. Lazard serves as an investment adviser for a company the management of
which supports a particular proposal, and shares of the company are held
in accounts of Lazard clients;

. Lazard serves as an investment adviser for the pension plan of an
organization that sponsors a proposal; or

. A Lazard employee who would otherwise be involved in the decision-making
process regarding a particular proposal has a material relationship with
the issuer or owns shares of the issuer.

2. GENERAL POLICY AND CONSEQUENCES OF VIOLATIONS

All proxies must be voted in the best interest of each Lazard client,
without any consideration of the interests of any other Lazard client
(unrelated to the economic effect of the proposal being voted on share price),
Lazard, LF&Co. or any of their Managing Directors, officers, employees or
affiliates.

PROXYOPS IS RESPONSIBLE FOR ALL PROXY VOTING IN ACCORDANCE WITH THIS POLICY
AFTER CONSULTING WITH THE APPROPRIATE MEMBER OR MEMBERS OF PORTFOLIO
MANAGEMENT, THE PROXY COMMITTEE AND/OR THE LEGAL AND COMPLIANCE DEPARTMENT. NO
OTHER MANAGING DIRECTORS, OFFICERS OR EMPLOYEES OF LAZARD, LF&CO. OR THEIR
AFFILIATES MAY INFLUENCE OR ATTEMPT TO INFLUENCE THE VOTE ON ANY PROPOSAL.
DOING SO WILL BE A VIOLATION OF THIS POLICY. ANY COMMUNICATION BETWEEN A
MANAGING DIRECTOR, OFFICER OR EMPLOYEE OF LF&CO. AND A MANAGING DIRECTOR,
OFFICER OR EMPLOYEE OF LAZARD TRYING TO INFLUENCE HOW A PROPOSAL SHOULD BE
VOTED IS PROHIBITED, AND IS A VIOLATION OF THIS POLICY. VIOLATIONS OF THIS
POLICY COULD RESULT IN DISCIPLINARY ACTION, INCLUDING LETTER OF CENSURE, FINE
OR SUSPENSION, OR TERMINATION OF EMPLOYMENT. ANY SUCH CONDUCT MAY ALSO VIOLATE
STATE AND FEDERAL SECURITIES AND OTHER LAWS, AS WELL AS LAZARD'S CLIENT
AGREEMENTS, WHICH COULD RESULT IN SEVERE CIVIL AND CRIMINAL PENALTIES BEING
IMPOSED, INCLUDING THE VIOLATOR BEING PROHIBITED FROM EVER WORKING FOR ANY
ORGANIZATION ENGAGED IN A SECURITIES BUSINESS.

EVERY MANAGING DIRECTOR, OFFICER AND EMPLOYEE OF LAZARD WHO PARTICIPATES IN
ANY WAY IN THE DECISION-MAKING PROCESS REGARDING PROXY VOTING IS RESPONSIBLE
FOR CONSIDERING WHETHER THEY HAVE A CONFLICTING INTEREST OR THE APPEARANCE OF A
CONFLICTING INTEREST ON ANY PROPOSAL. A CONFLICT COULD ARISE, FOR EXAMPLE, IF A
MANAGING DIRECTOR, OFFICER OR EMPLOYEE HAS A FAMILY MEMBER WHO IS AN OFFICER OF
THE ISSUER OR OWNS SECURITIES OF THE ISSUER. IF A MANAGING DIRECTOR, OFFICER OR
EMPLOYEE BELIEVES SUCH A CONFLICT EXISTS OR MAY APPEAR TO EXIST, HE OR SHE
SHOULD NOTIFY THE CHIEF COMPLIANCE OFFICER IMMEDIATELY AND, UNLESS DETERMINED
OTHERWISE, SHOULD NOT CONTINUE TO PARTICIPATE IN THE DECISION-MAKING PROCESS.

3. MONITORING FOR CONFLICTS AND VOTING WHEN A MATERIAL CONFLICT EXISTS

Lazard monitors for potential conflicts of interest when it is possible that
a conflict could be viewed as influencing the outcome of the voting decision.
Consequently, the steps that Lazard takes to monitor conflicts, and voting
proposals when the appearance of a material conflict exists, differ depending
on whether the Approved Guideline for the specific item is to vote for or
against, or is to vote on a case-by-case basis.

A. WHERE APPROVED GUIDELINE IS FOR OR AGAINST

Most proposals on which Lazard votes have an Approved Guideline to vote for
or against. Generally, unless Portfolio Management disagrees with the Approved
Guideline for a specific proposal, ProxyOps votes according to the Approved
Guideline. It is therefore necessary to consider whether an apparent conflict
of interest exists where Portfolio Management disagrees with the Approved
Guideline. When that happens, the Manager of ProxyOps will use its best efforts
to determine whether a conflict of interest or potential conflict of interest
exists by inquiring whether the company itself, or the sponsor of the proposal
is a Lazard client. If either is a Lazard client, the Manager of Proxy Ops will
notify Lazard's Chief Compliance Officer, who will determine whether some other
conflict or potential conflict exists.

If it appears that a conflict of interest exists, the Manager of ProxyOps
will notify the Proxy Committee, who will review the facts surrounding the
conflict and determine whether the conflict is material. Whether a conflict is
"material" will depend on the facts and circumstances involved. For purposes of
this Policy, the appearance of a material conflict is one that the Proxy
Committee determines could be expected by a reasonable person in similar
circumstances to influence or potentially influence the voting decision on the
particular proposal involved.

If the Proxy Committee determines that there is no material conflict, the
proxy will be voted as outlined in this Policy. If the Proxy Committee
determines that a material conflict appears to exist, then the proposal will be
voted according to the Approved Guideline.

B. WHERE APPROVED GUIDELINE IS CASE-BY-CASE

In situations where the Approved Guideline is to vote case-by-case and a
material conflict of interest appears to exist, Lazard's policy is to vote the
proxy item according to the recommendation of an independent

source, currently ISS. The Manager of ProxyOps will use his best efforts to
determine whether a conflict of interest or a potential conflict of interest
may exist by inquiring whether the sponsor of the proposal is a Lazard client.
If the sponsor is a Lazard client, the Manager of Proxy Ops will notify
Lazard's Chief Compliance Officer, who will determine whether some other
conflict or potential conflict exists.

If it appears that a conflict of interest exists, the Manager of ProxyOps
will notify the Proxy Committee, who will review the facts surrounding the
conflict and determine whether the conflict is material. There is a presumption
that certain circumstances will give rise to a material conflict of interest or
the appearance of such material conflict, such as LF&Co. having provided
services to a company with respect to an upcoming significant proxy proposal
(i.e., a merger or other significant transaction). If the Proxy Committee
determines that there is no material conflict, the proxy will be voted as
outlined in this Policy. If the Proxy Committee determines that a material
conflict appears to exist, then the proposal will generally be voted according
to the recommendation of ISS, however, before doing so, ProxyOps will obtain a
written representation from ISS that it is not in a position of conflict with
respect to the proxy, which could exist if ISS receives compensation from the
proxy issuer on corporate governance issues in addition to the advice it
provides Lazard on proxies. If ISS is in a conflicting position or if the
recommendations of the two services offered by ISS, the Proxy Advisor Service
and the Proxy Voter Service, are not the same, Lazard will obtain a
recommendation from a third independent source that provides proxy voting
advisory services, and will defer to the majority recommendation. If a
recommendation for a third independent source is not available and ISS is not
in a conflicting position, Lazard will follow the recommendation of ISS's Proxy
Advisor Service. In addition, in the event of a conflict that arises in
connection with a proposal for a Lazard mutual fund, Lazard will either follow
the procedures described above or vote shares for or against the proposal in
proportion to shares voted by other shareholders.

G. REVIEW OF POLICY

The Proxy Committee will review this Policy at least semi-annually to
consider whether any changes should be made to it or to any of the Approved
Guidelines. Questions or concerns regarding the Policy should be raised with
Lazard's General Counsel or Chief Compliance Officer.

[LOGO]

BATTERYMARCH FINANCIAL MANAGEMENT, INC.
PROXY VOTING POLICIES AND PROCEDURES

INTRODUCTION

Batterymarch's primary focus and responsibility is to preserve and enhance
its clients' investment returns. An integral part of this responsibility is
encouraging good corporate governance practices by the companies we invest in
through conscientiously exercising shareholder rights. We believe this will
result in increased value for shareholders.

Batterymarch has adopted and implemented the following policies and
procedures, which we believe are reasonably designed to ensure that
Batterymarch's votes are cast in a consistent manner that place our clients'
interests first.

Batterymarch's Proxy Voting Philosophy and Guidelines are an integral part
of this document.

VOTING AND MONITORING RESPONSIBILITY

Batterymarch's Compliance Department is responsible for managing and
monitoring proxy voting operations. Batterymarch has retained Institutional
Shareholder Services ("ISS"), a recognized authority on proxy voting and
corporate governance, to provide day-to-day proxy voting services, including,
but not limited to, obtaining information from clients' custodians, reconciling
proxy ballots, providing vote recommendations, voting, recordkeeping and
reporting. Batterymarch's compliance personnel are responsible for managing the
relationship with ISS and ensuring that Batterymarch's fiduciary obligations
are met.

VOTING AUTHORITY

Batterymarch assumes voting authority for all client accounts unless a
client's Investment Management Agreement explicitly states otherwise.

HOW PROXIES ARE VOTED

Batterymarch's policy is generally to vote in accordance with the
recommendations of ISS. Voting will normally be conducted in accordance with
ISS's standard guidelines. However, a client may direct Batterymarch to vote in
accordance with the guidelines of Proxy Voter Services ("PVS"), an independent
division of ISS which focuses on the specific concerns of Taft-Hartley plans
and which conform to the AFL-CIO voting guidelines. In instances where ISS has
not made any recommendations with respect to a proxy, Batterymarch will
generally vote in accordance with ISS's proxy voting guidelines.

Under certain circumstances, Batterymarch may believe that it will be in the
best interests of clients to vote against ISS's recommendations or, in cases
where ISS has not provided Batterymarch with any recommendations with respect
to a proxy, to vote in contradiction with ISS's general proxy voting
guidelines. In such cases, provided that Batterymarch's Compliance Department
does not identify a material conflict of interest in overriding an ISS vote
recommendation or voting against ISS's proxy voting guidelines, Batterymarch
will override the voting recommendation of ISS.

Batterymarch will generally cast votes for all shares for which it has
voting authority, unless the cost of voting is presumed to outweigh the
benefit. Batterymarch's policy regarding when it may not vote proxies is
described below.

CONFLICTS OF INTEREST

Potential conflicts of interest may arise due to a variety of reasons that
could affect how Batterymarch votes proxies. Batterymarch manages assets for a
wide variety of clients that may have mutually exclusive goals regarding the
outcome of a shareholders meeting. Batterymarch may have a conflict of interest
when a company that is soliciting a proxy is an advisory client of
Batterymarch, or when Batterymarch's employees have an interest in a proxy
voting proposal that is at variance with the interests of Batterymarch's
clients. With the ability to influence the outcome of a corporation's
shareholders meeting comes the responsibility to prevent potential conflicts of
interest from affecting the way we cast our votes. Batterymarch attempts to
minimize material conflicts of interest by using pre-determined voting
guidelines and by obtaining vote recommendations from ISS.

If one or more members of Batterymarch's investment teams believe that it
will be in the best interests of clients to vote in contradiction with ISS's
recommendations or, in cases where ISS has not provided Batterymarch with any
recommendations with respect to a proxy, to vote in contradiction with ISS's
general proxy voting guidelines, Batterymarch's Compliance Department will be
responsible for identifying whether any proxy voting proposals present a
conflict of interest. If such a proposal is identified, Batterymarch's
compliance personnel will decide whether it presents a material conflict of
interest.

If a conflict of interest is identified, proxy proposals that are "routine,"
such as uncontested elections of directors, meeting formalities, and approval
of financial statements, generally will not result in a material conflict of
interest. Material conflicts of interest are more likely to result from
non-routine proxy proposals. Non-routine proposals would typically include any
contested matter, including a contested election of directors, a merger or sale
of substantial assets, a change in the articles of incorporation that
materially affects the rights of shareholders, and compensation matters for
management (e.g., stock option plans and retirement plans).

If Batterymarch's Compliance Department determines that a material conflict
of interest exists, Batterymarch may vote the proposal in accordance with
either the recommendations of (a) ISS, (b) another authorized person of
Batterymarch if the material conflict of interest does not relate to such other
person or Batterymarch itself, or (c) each client whose portfolio includes the
applicable security. If Batterymarch solicits instructions from clients on how
to vote a proposal or proxy, Batterymarch may or may not disclose to such
clients the nature of the conflict of interest.

WHEN BATTERYMARCH MAY NOT VOTE

Batterymarch generally does not vote proxies when it determines that the
cost of voting outweighs the benefit of doing so. Voting in foreign markets
typically incurs higher costs than voting in the U.S. Among the various costs
associated with voting foreign shares are fees for translating meeting
materials, custody fees, and charges for obtaining power of attorney documents.
We have identified the most significant potential cost as the loss of liquidity
connected with voting in share blocking markets.

In share blocking markets, regulations designed to establish eligibility for
voting require that shares be blocked from trading for a period of time before
and/or after a shareholder meeting. During the blocking period, any pending
trades in blocked shares will not settle. Depending on the market, this period
can last from one day to several weeks, assuming a quorum is achieved. If the
first call for a meeting fails to meet quorum, it may be necessary to conduct a
second or even third call, thereby extending the blocking period. If a sale of
blocked shares must be executed to satisfy a client redemption request or is
otherwise deemed desirable by Batterymarch, it will settle late and potentially
be subject to interest charges or other punitive fees or practices such as
automatic buy-in procedures.

Because of these inherent risks, we have decided not to vote in markets
where share blocking is practiced, unless we determine that a particular
proposal or series of proposals is likely to represent a substantial increase
in shareholder value and/or rights. This decision will be based on the
determination of Batterymarch's investment personnel.

ISS sends a periodic report of securities with upcoming meetings in share
blocking markets. This report details the type of meeting, the market and the
blocking period. Batterymarch's Compliance Department monitors these upcoming
meetings, consults with Batterymarch investment team members responsible for
investing in each market and arrives at a decision on whether or not to vote.

RECORDKEEPING AND REPORTING

ISS maintains complete records of all votes cast on behalf of each of
Batterymarch's client accounts, including the number of shares held, meeting
date, type of meeting, management recommendation, and the rationale for each
vote. ISS provides Batterymarch with periodic, customized reports for each
client account for which Batterymarch votes proxies.

REQUESTS TO OBTAIN PROXY VOTING INFORMATION

Batterymarch provides proxy voting summary reports to clients for whom we
exercise voting responsibility on an annual basis or more frequently, subject
to such clients' reporting requirements. Batterymarch is able to provide such
reporting either electronically or in hard copy format. Batterymarch also
provides a copy of its proxy voting guidelines to clients upon request.

A log of client requests for proxy voting information and details on the
fulfillment of those requests is maintained by Batterymarch's Compliance
Department.

Client requests for obtaining information about Batterymarch's proxy voting
guidelines or information about how Batterymarch voted client securities, if
applicable, can be obtained by contacting Batterymarch:

By mail

Batterymarch Financial Management, Inc.
Attention: Compliance Department
John Hancock Tower
200 Clarendon Street, 49/th/ Floor
Boston, Massachusetts 02116
USA

By telephone

(617) 266-8300

PROXY VOTING

The Firm will exercise its proxy voting responsibilities to serve the best
interests of its clients and in compliance with applicable laws and
regulations. The Firm recognizes that proxy voting is a valuable right of
company shareholders and believes that shareholders are best served by a voting
process guided by the principles of preserving and expanding the power of
shareholders in areas of corporate governance and allowing responsible
management teams to run businesses.

PROCEDURES

Oversight of Principles and Procedures

The Firm's Chief Investment Officer has full authority to determine the
Firm's proxy voting principles and procedures and vote proxies on behalf of the
Firm's clients. The Chief Investment Officer has delegated oversight and
implementation of the proxy voting process, including the principles and
procedures that govern it, to the Firm's Proxy Officers and the Legal and
Compliance Department. The Firm will periodically review its existing
principles and procedures in light of the Firm's duties as well as applicable
laws and regulations to determine if any changes are necessary.

Limitations

The Firm recognizes proxy voting as a valuable right of company
shareholders. Generally speaking, the Firm will vote all proxies it receives.
However, the Firm may refrain from voting in certain circumstances. For
instance, the Firm generally intends to refrain from voting a proxy if the
company's shares are no longer held by the Firm's clients at the time of the
meeting. Additionally, the Firm may refrain from voting a proxy if the Firm
concludes the potential impact on shareholders' interests is insignificant
while the cost associated with analyzing and voting the proxy may be
significant. If the Proxy Administration Officer confirms that shares of a
security are on loan as of the record date of the meeting for which a proxy is
received, the Firm will be unable to vote those shares for the client. As a
general matter, the Firm discourages its clients from loaning the securities
the Firm manages.

Proxy Administration

The Firm will instruct each client custodian to forward proxy materials to
the vendor engaged by the Firm to electronically receive ballots and transmit
the Firm's proxy votes, as well as to maintain proxy voting receipts and
records (the "Proxy Administration Vendor"). New client custodians will be
notified at account inception of their responsibility to deliver proxy
materials to the Firm's Proxy Administration Vendor.

COMPLIANCE REVIEW

A Compliance Officer will review the pending proxies and identify any
potential conflicts between the Firm, or its employees, and the Firm's clients.

IDENTIFYING CONFLICTS

In identifying conflicts of interest, a Compliance Officer will review the
following issues:

(i) Whether there are any business or personal relationships between the
Firm, or an employee of the Firm, and the officers, directors or shareholder
proposal proponents of a company whose securities are held in client
accounts that may create an incentive to vote in a manner that is not
consistent with the best interests of the Firm's clients;

(ii) Whether the Firm has any other economic incentive to vote in a
manner that is not consistent with the best interests of its clients; and;

(iii) Whether the Proxy Officer voting the shares is aware of any
business or personal relationship, or other economic incentive that has the
potential to influence the manner in which the Proxy Officer votes
the shares.

ASSESSING MATERIALITY

If it is determined that a conflict exists, the conflict will be deemed to
be material if the Compliance Officer determines, in the exercise of reasonable
judgment, that the conflict is likely to have an impact on the manner in which
the subject shares are voted.

If the Compliance Officer determines that the conflict is not material, the
proxy issue will be forwarded to the Proxy Officer for voting.

If the Compliance Officer determines that the conflict may be material, the
following steps will be taken:

(i) The Compliance Officer will consult with representatives of the
Firm's senior management to make a final determination of materiality. The
Compliance Officer will maintain a record of this determination.

(ii) After the determination is made, the following procedures will apply:

(a) If the final determination is that the conflict is not material,
the proxy issue will be forwarded to the Proxy Officer for voting;

(b) If the final determination is that the conflict is material, the
following procedures will apply:

(1) If the Firm's Proxy Voting Guidelines ("Guidelines"), a copy
of which is included as Schedule 3, definitively address the issues
presented for vote, the Firm will vote according to the Guidelines;

(2) If the issues presented for vote are not definitively
addressed in the Guidelines, the Firm will either (x) follow the vote
recommendation of an independent Voting Delegate or (y) disclose the
conflict to clients and obtain their consent to vote.

NOTIFICATION TO CLIENTS

To the extent a client requires notification if a conflict of interest is
identified, a Compliance Officer will ensure that notification is carried out
in a timely manner.

PROXY OFFICER DUTIES

The Proxy Officer will review proxies and evaluate matters for vote in light
of the Firm's principles and procedures and the Guidelines. The Proxy Officer
may seek additional information from the Firm's Investment Team, company
management, independent research services, or other sources to determine how to
vote in the best interests of shareholders. Additionally, the Proxy Officer may
consult with the Firm's Chief Investment Officer for guidance on proxy issues.
Generally, the Proxy Officer will not consult the Firm's affiliates during this
process. The Firm will maintain all documents that it creates that were
material to its process for determining how to vote proxies for its clients or
that memorialize the basis for a vote. The Proxy Officer will sign and return
to the Proxy Administration Officer all forms indicating the manner in which
votes on proxy issues should be cast by the Proxy Administration Officer.

PROXY ADMINISTRATION OFFICER DUTIES

The Proxy Administration Officer will:

(i) Provide custodians with instructions to forward proxies to the Firm's
Proxy Administration Vendor for all clients for whom the Firm is responsible
for voting proxies;

a) Other Discrepancies Noted

If any share discrepancies are noted, the Proxy Administration
Officer will notify the custodian.

1) Manual Voting

If the Firm's Proxy Administration Vendor did not receive a ballot
for a client, the Proxy Administration Officer will contact the
custodian to obtain a control number and then use the control number
to allow the Proxy Administration Vendor to update the ballot, if
time permits, or manually vote the shares for that client.

(iii) Use best efforts to obtain missing proxies from custodian;

(iv) Inform the Legal and Compliance Department and Proxy Administration
Officer if the company's shares are no longer held by Firm clients as of the
meeting date;

(v) Ensure the Proxy Administration Officer and the Legal and Compliance
Department are aware of the timeline to vote a proxy and use best efforts to
ensure that votes are cast in a timely manner;

(vi) Per instructions from the Proxy Administration Officer or a
Compliance Officer, vote proxy issues via the Proxy Administration Vendor's
software, online or via facsimile , and;

(vii) Obtain evidence of receipt and maintain records of all proxies
voted.

SCHEDULE 3

PROXY VOTING GUIDELINES

The Firm maintains these proxy-voting guidelines, which set forth the manner
in which the Firm generally votes on issues that are routinely presented.
Please note that for each proxy vote the Firm takes into consideration its duty
to its clients, the specific circumstances of the vote and all other relevant
facts available at the time of the vote. While these guidelines provide the
framework for voting proxies, ultimately proxy votes are cast on a case-by-case
basis. Therefore actual votes for any particular proxy issue may differ from
the guidelines shown below.

FOUR PRINCIPAL AREAS OF INTEREST TO SHAREHOLDERS:

1) Obligations of the Board of Directors
2) Compensation of management and the Board of Directors
3) Take-over protections
4) Shareholders' rights

PROXY ISSUE FIRM GUIDELINE
- - ----------- --------------

BOARD OF DIRECTORS
INDEPENDENCE OF BOARDS OF DIRECTORS: majority of unrelated directors, independent of
management.............................................................................. For
NOMINATING PROCESS: independent nominating committee seeking qualified candidates,
continually assessing directors and proposing new nominees.............................. For
SIZE AND EFFECTIVENESS OF BOARDS OF DIRECTORS: Boards must be no larger than 15 members... For
CUMULATIVE VOTING FOR DIRECTORS........................................................... For
STAGGERED BOARDS.......................................................................... Against
SEPARATION OF BOARD AND MANAGEMENT ROLES (CEO/CHAIRMAN)................................... Case-by-Case
COMPENSATION REVIEW PROCESS: compensation committee comprised of outside, unrelated
directors to ensure shareholder value while rewarding good performance.................. For
DIRECTOR LIABILITY & INDEMNIFICATION: support limitation of liability and provide
indemnification......................................................................... For
AUDIT PROCESS............................................................................. For
BOARD COMMITTEE STRUCTURE: audit, compensation, and nominating and/or governance
committee consisting entirely of independent directors.................................. For
MONETARY ARRANGEMENTS FOR DIRECTORS: outside of normal board activities amts should be
approved by a board of independent directors and reported in proxy...................... For
FIXED RETIREMENT POLICY FOR DIRECTORS..................................................... Case-by-Case
OWNERSHIP REQUIREMENT: all Directors have direct and material cash investment in common
shares of Company....................................................................... For
PROPOSALS ON BOARD STRUCTURE: (lead director, shareholder advisory committees, requirement
that candidates be nominated by shareholders, attendance at meetings)................... For
ANNUAL REVIEW OF BOARD/CEO BY BOARD....................................................... For
PERIODIC EXECUTIVE SESSIONS WITHOUT MGMT (INCLUDING CEO).................................. For
VOTES FOR SPECIFIC DIRECTORS.............................................................. Case-by-Case

MANAGEMENT AND DIRECTOR COMPENSATION
STOCK OPTION AND INCENTIVE COMPENSATION PLANS:............................................ Case-by-Case
FORM OF VEHICLE: grants of stock options, stock appreciation rights, phantom shares and
restricted stock........................................................................ Case-by-Case

-CONTINUED-

PROXY ISSUE FIRM GUIDELINE
- - ----------- ------------------------------

PRICE.......................................................................... Against plans whose underlying
securities are to be issued at
less than 100% of the current
market value
RE-PRICING: plans that allow the Board of Directors to lower the exercise price
of options already granted if the stock price falls or under-performs the
market....................................................................... Against
EXPIRY: plan whose options have a life of more than ten years.................. Case-by-Case
EXPIRY: "evergreen" stock option plans......................................... Against
DILUTION:...................................................................... Case-by-Case--taking into
account value creation,
commitment to shareholder-
friendly policies, etc.
VESTING: stock option plans that are 100% vested when granted.................. Against
PERFORMANCE VESTING: link granting of options, or vesting of options
previously granted, to specific performance targets.......................... For
CONCENTRATION: authorization to allocate 20% or more of the available options
to any one individual in any one year........................................ Against
DIRECTOR ELIGIBILITY: stock option plans for directors if terms and conditions
are clearly defined and reasonable........................................... Case-by-Case
CHANGE IN CONTROL: stock option plans with change in control provisions that
allow option holders to receive more for their options than shareholders
would receive for their shares............................................... Against
CHANGE IN CONTROL: change in control arrangements developed during a take-
over fight specifically to entrench or benefit management.................... Against
CHANGE IN CONTROL: granting options or bonuses to outside directors in event
of a change in control....................................................... Against
BOARD DISCRETION: plans to give Board broad discretion in setting terms and
conditions of programs....................................................... Against
EMPLOYEE LOANS: Proposals authorizing loans to employees to pay for stock
or options................................................................... Against
Director Compensation: % of directors' compensation in form of common
shares....................................................................... For
GOLDEN PARACHUTES.............................................................. Case-by-Case
EXPENSE STOCK OPTIONS.......................................................... For
SEVERANCE PACKAGES: must receive shareholder approval.......................... For
LACK OF DISCLOSURE ABOUT PROVISIONS OF STOCK-BASED PLANS....................... Against
RELOAD OPTIONS................................................................. Against
PLAN LIMITED TO A SMALL NUMBER OF SENIOR EMPLOYEES............................. Against
EMPLOYEE STOCK PURCHASE PLANS.................................................. Case-by-Case

TAKEOVER PROTECTIONS
SHAREHOLDER RIGHTS PLANS: plans that go beyond ensuring the equal treatment
of shareholders in the event of a bid and allowing the corp. enough time to
consider alternatives to a bid............................................... Against
GOING PRIVATE TRANSACTION, LEVERAGED BUYOUTS AND OTHER PURCHASE
TRANSACTIONS................................................................. Case-by-Case
LOCK-UP ARRANGEMENTS: "hard" lock-up arrangements that serve to prevent
competing bids in a takeover situation....................................... Against
CROWN JEWEL DEFENSES........................................................... Against
PAYMENT OF GREENMAIL........................................................... Against

-CONTINUED-

PROXY ISSUE FIRM GUIDELINE
- - ----------- -------------------------

"CONTINUING DIRECTOR" OR "DEFERRED REDEMPTION" PROVISIONS: provisions
that seek to limit the discretion of a future board to redeem the plan... Against
CHANGE CORPORATION'S DOMICILE: if reason for re-incorporation is to take
advantage of protective statutes (anti-takeover)......................... Against
POISON PILLS: receive shareholder ratification............................. For
REDEMPTION/RATIFICATION OF POISON PILL..................................... For

SHAREHOLDERS' RIGHTS
CONFIDENTIAL VOTING BY SHAREHOLDERS........................................ For
DUAL-CLASS SHARE STRUCTURES................................................ Against
LINKED PROPOSALS: with the objective of making one element of a proposal
more acceptable.......................................................... Against
BLANK CHECK PREFERRED SHARES: authorization of, or an increase in, blank
check preferred shares................................................... Against
SUPERMAJORITY APPROVAL OF BUSINESS TRANSACTIONS: management seeks to
increase the number of votes required on an issue above two-thirds of the
outstanding shares....................................................... Against
INCREASE IN AUTHORIZED SHARES: provided the amount requested is necessary
for sound business reasons............................................... For
SHAREHOLDER PROPOSALS...................................................... Case-by-Case
STAKEHOLDER PROPOSALS...................................................... Case-by-Case
ISSUANCE OF PREVIOUSLY AUTHORIZED SHARES WITH VOTING RIGHTS TO BE
DETERMINED BY THE BOARD WITHOUT PRIOR SPECIFIC SHAREHOLDER
APPROVAL................................................................. Against
"FAIR PRICE" PROVISIONS: Measures to limit ability to buy back shares from
particular shareholder at higher-than-market prices...................... For
PREEMPTIVE RIGHTS.......................................................... For
ACTIONS ALTERING BOARD/SHAREHOLDER RELATIONSHIP REQUIRE PRIOR
SHAREHOLDER APPROVAL (including "anti-takeover" measures)................ For
ALLOW SHAREHOLDER ACTION BY WRITTEN CONSENT................................ For
ALLOW SHAREHOLDERS TO CALL SPECIAL MEETINGS................................ For
SOCIAL AND ENVIRONMENTAL ISSUES............................................ As recommended by Company
Management
REIMBURSING PROXY SOLICITATION EXPENSES.................................... Case-by-Case

[LOGO]
WESTERN ASSET

PROCEDURE: PROXY VOTING
- - ---------- ----------------------------------------------------------------------

DEPARTMENTS IMPACTED: Investment Management, Compliance, Investment Support, Client Services
REFERENCES: WA Compliance Manual--Section R--Proxy Voting
WAML Compliance Manual--Section 4.11--Proxy Voting
Investment Advisers Act Rule 206(4)-6 and Rule 204-2
ERISA DOL Bulletin 94-2 C.F.R. 2509.94-2
EFFECTIVE: August 1, 2003

BACKGROUND

Western Asset Management Company ("WA") and Western Asset Management Company
Limited ("WAML") (together "Western Asset") have adopted and implemented
policies and procedures that we believe are reasonably designed to ensure that
proxies are voted in the best interest of clients, in accordance with our
fiduciary duties and SEC Rule 206(4)-6 under the Investment Advisers Act of
1940 ("Advisers Act"). Our authority to vote the proxies of our clients is
established through investment management agreements or comparable documents,
and our proxy voting guidelines have been tailored to reflect these specific
contractual obligations. In addition to SEC requirements governing advisers,
our proxy voting policies reflect the long-standing fiduciary standards and
responsibilities for ERISA accounts. Unless a manager of ERISA assets has been
expressly precluded from voting proxies, the Department of Labor has determined
that the responsibility for these votes lies with the Investment Manager.

In exercising its voting authority, Western Asset will not consult or enter
into agreements with officers, directors or employees of Legg Mason Inc. or any
of its affiliates (except that WA and WAML may so consult and agree with each
other) regarding the voting of any securities owned by its clients.

POLICY

Western Asset's proxy voting procedures are designed and implemented in a
way that is reasonably expected to ensure that proxy matters are handled in the
best interest of our clients. While the guidelines included in the procedures
are intended to provide a benchmark for voting standards, each vote is
ultimately cast on a case-by-case basis, taking into consideration Western
Asset's contractual obligations to our clients and all other relevant facts and
circumstances at the time of the vote (such that these guidelines may be
overridden to the extent Western Asset deems appropriate).

PROCEDURES

Responsibility and Oversight

The Western Asset Compliance Department ("Compliance Department") is
responsible for administering and overseeing the proxy voting process. The
gathering of proxies is coordinated through the Corporate Actions area of
Investment Support ("Corporate Actions"). Research analysts and portfolio
managers are responsible for determining appropriate voting positions on each
proxy utilizing any applicable guidelines contained in these procedures.

WESTERN ASSET MANAGEMENT COMPANY
385 East Colorado Blvd. Pasadena, CA 91101 . Tel: (626) 844-9400 . Fax:
(626) 844-9450

Client Authority

Prior to August 1, 2003, all existing client investment management
agreements ("IMAs") will be reviewed to determine whether Western Asset has
authority to vote client proxies. At account start-up, or upon amendment of an
IMA, the applicable client IMA are similarly reviewed. If an agreement is
silent on proxy voting, but contains an overall delegation of discretionary
authority or if the account represents assets of an ERISA plan, Western Asset
will assume responsibility for proxy voting. The Client Account Transition Team
maintains a matrix of proxy voting authority.

Proxy Gathering

Registered owners of record, client custodians, client banks and trustees
("Proxy Recipients") that receive proxy materials on behalf of clients should
forward them to Corporate Actions. Prior to August 1, 2003, Proxy Recipients of
existing clients will be reminded of the appropriate routing to Corporate
Actions for proxy materials received and reminded of their responsibility to
forward all proxy materials on a timely basis. Proxy Recipients for new clients
(or, if Western Asset becomes aware that the applicable Proxy Recipient for an
existing client has changed, the Proxy Recipient for the existing client) are
notified at start-up of appropriate routing to Corporate Actions of proxy
materials received and reminded of their responsibility to forward all proxy
materials on a timely basis. If Western Asset personnel other than Corporate
Actions receive proxy materials, they should promptly forward the materials to
Corporate Actions.

Proxy Voting

Once proxy materials are received by Corporate Actions, they are forwarded
to the Compliance Department for coordination and the following actions:

a. Proxies are reviewed to determine accounts impacted.

b. Impacted accounts are checked to confirm Western Asset voting
authority.

c. Compliance Department staff reviews proxy issues to determine any
material conflicts of interest. (See conflicts of interest section of
these procedures for further information on determining material
conflicts of interest.)

d. If a material conflict of interest exists, (i) to the extent
reasonably practicable and permitted by applicable law, the client is
promptly notified, the conflict is disclosed and Western Asset
obtains the client's proxy voting instructions, and (ii) to the
extent that it is not reasonably practicable or permitted by
applicable law to notify the client and obtain such instructions
(e.g., the client is a mutual fund or other commingled vehicle or is
an ERISA plan client), Western Asset seeks voting instructions from
an independent third party.

e. Compliance Department staff provides proxy material to the
appropriate research analyst or portfolio manager to obtain their
recommended vote. Research analysts and portfolio managers determine
votes on a case-by-case basis taking into account the voting
guidelines contained in these procedures. For avoidance of doubt,
depending on the best interest of each individual client, Western
Asset may vote the same proxy differently for different clients. The
analyst's or portfolio manager's basis for their decision is
documented and maintained by the Compliance Department.

f. Compliance Department staff votes the proxy pursuant to the
instructions received in (d) or (e) and returns the voted proxy as
indicated in the proxy materials.

Timing

Western Asset personnel act in such a manner to ensure that, absent special
circumstances, the proxy gathering and proxy voting steps noted above can be
completed before the applicable deadline for returning proxy votes.

Recordkeeping

Western Asset maintains records of proxies voted pursuant to Section 204-2
of the Advisers Act and ERISA DOL Bulletin 94-2. These records include:

a. A copy of Western Asset's policies and procedures.

b. Copies of proxy statements received regarding client securities.

c. A copy of any document created by Western Asset that was material to
making a decision how to vote proxies.

d. Each written client request for proxy voting records and Western
Asset's written response to both verbal and written client requests.

e. A proxy log including:

1. Issuer name;

2. Exchange ticker symbol of the issuer's shares to be voted;

3. Council on Uniform Securities Identification Procedures ("CUSIP")
number for the shares to be voted;

4. A brief identification of the matter voted on;

5. Whether the matter was proposed by the issuer or by a shareholder
of the issuer;

6. Whether a vote was cast on the matter;

7. A record of how the vote was cast; and

8. Whether the vote was cast for or against the recommendation of
the issuer's management team.

Records are maintained in an easily accessible place for five years, the
first two in Western Asset's offices.

Disclosure

Part II of both the WA Form ADV and the WAML Form ADV contain a description
of Western Asset's proxy policies. Prior to August 1, 2003, Western Asset will
deliver Part II of its revised Form ADV to all existing clients, along with a
letter identifying the new disclosure. Clients will be provided a copy of these
policies and procedures upon request. In addition, upon request, clients may
receive reports on how their proxies have been voted.

Conflicts of Interest

All proxies are reviewed by the Compliance Department for material conflicts
of interest. Issues to be reviewed include, but are not limited to:

1. Whether Western Asset (or, to the extent required to be considered by
applicable law, its affiliates) manages assets for the company or an
employee group of the company or otherwise has an interest in the
company;

2. Whether Western Asset or an officer or director of Western Asset or
the applicable portfolio manager or analyst responsible for
recommending the proxy vote (together, "Voting Persons") is a close
relative of or has a personal or business relationship with an
executive, director or person who is a candidate for director of the
company or is a participant in a proxy contest; and

3. Whether there is any other business or personal relationship where a
Voting Person has a personal interest in the outcome of the matter
before shareholders.

VOTING GUIDELINES

Western Asset's substantive voting decisions turn on the particular facts
and circumstances of each proxy vote and are evaluated by the designated
research analyst or portfolio manager. The examples outlined below are meant as
guidelines to aid in the decision making process.

Guidelines are grouped according to the types of proposals generally
presented to shareholders. Part I deals with proposals which have been approved
and are recommended by a company's board of directors; Part II deals with
proposals submitted by shareholders for inclusion in proxy statements; Part III
addresses issues relating to voting shares of investment companies; and Part IV
addresses unique considerations pertaining to foreign issuers.

I. Board Approved Proposals

The vast majority of matters presented to shareholders for a vote involve
proposals made by a company itself that have been approved and recommended by
its board of directors. In view of the enhanced corporate governance practices
currently being implemented in public companies, Western Asset generally votes
in support of decisions reached by independent boards of directors. More
specific guidelines related to certain board-approved proposals are as follows:

1. Matters relating to the Board of Directors

Western Asset votes proxies for the election of the company's nominees for
directors and for board-approved proposals on other matters relating to the
board of directors with the following exceptions:

a. Votes are withheld for the entire board of directors if the board
does not have a majority of independent directors or the board does
not have nominating, audit and compensation committees composed
solely of independent directors.

b. Votes are withheld for any nominee for director who is considered an
independent director by the company and who has received compensation
from the company other than for service as a director.

c. Votes are withheld for any nominee for director who attends less than
75% of board and committee meetings without valid reasons for
absences.

d. Votes are cast on a case-by-case basis in contested elections of
directors.

2. Matters relating to Executive Compensation

Western Asset generally favors compensation programs that relate executive
compensation to a company's long-term performance. Votes are cast on a
case-by-case basis on board-approved proposals relating to executive
compensation, except as follows:

a. Except where the firm is otherwise withholding votes for the entire
board of directors, Western Asset votes for stock option plans that
will result in a minimal annual dilution.

b. Western Asset votes against stock option plans or proposals that
permit replacing or repricing of underwater options.

c. Western Asset votes against stock option plans that permit issuance
of options with an exercise price below the stock's current market
price.

d. Except where the firm is otherwise withholding votes for the entire
board of directors, Western Asset votes for employee stock purchase
plans that limit the discount for shares purchased under the plan to
no more than 15% of their market value, have an offering period of 27
months or less and result in dilution of 10% or less.

3. Matters relating to Capitalization

The management of a company's capital structure involves a number of
important issues, including cash flows, financing needs and market conditions
that are unique to the circumstances of each company. As a result, Western
Asset votes on a case-by-case basis on board-approved proposals involving
changes to a company's capitalization except where Western Asset is otherwise
withholding votes for the entire board of directors.

a. Western Asset votes for proposals relating to the authorization of
additional common stock.

b. Western Asset votes for proposals to effect stock splits (excluding
reverse stock splits).

c. Western Asset votes for proposals authorizing share repurchase
programs.

4. Matters relating to Acquisitions, Mergers, Reorganizations and Other
Transactions

Western Asset votes these issues on a case-by-case basis on board-approved
transactions.

5. Matters relating to Anti-Takeover Measures

Western Asset votes against board-approved proposals to adopt anti-takeover
measures except as follows:

a. Western Asset votes on a case-by-case basis on proposals to ratify or
approve shareholder rights plans.

b. Western Asset votes on a case-by-case basis on proposals to adopt
fair price provisions.

6. Other Business Matters

Western Asset votes for board-approved proposals approving such routine
business matters such as changing the company's name, ratifying the appointment
of auditors and procedural matters relating to the shareholder meeting.

a. Western Asset votes on a case-by-case basis on proposals to amend a
company's charter or bylaws.

b. Western Asset votes against authorization to transact other
unidentified, substantive business at the meeting.

II. Shareholder Proposals

SEC regulations permit shareholders to submit proposals for inclusion in a
company's proxy statement. These proposals generally seek to change some aspect
of a company's corporate governance structure or to change some aspect of its
business operations. Western Asset votes in accordance with the recommendation
of the company's board of directors on all shareholder proposals, except as
follows:

1. Western Asset votes for shareholder proposals to require shareholder
approval of shareholder rights plans.

2. Western Asset votes for shareholder proposals that are consistent with
Western Asset's proxy voting guidelines for board-approved proposals.

3. Western Asset votes on a case-by-case basis on other shareholder
proposals where the firm is otherwise withholding votes for the entire board
of directors.

III. Voting Shares of Investment Companies

Western Asset may utilize shares of open or closed-end investment companies
to implement its investment strategies. Shareholder votes for investment
companies that fall within the categories listed in Parts I and II above are
voted in accordance with those guidelines.

1. Western Asset votes on a case-by-case basis on proposals relating to
changes in the investment objectives of an investment company taking into
account the original intent of the fund and the role the fund plays in the
clients' portfolios.

2. Western Asset votes on a case-by-case basis all proposals that would
result in increases in expenses (e.g., proposals to adopt 12b-1 plans, alter
investment advisory arrangements or approve fund mergers) taking into account
comparable expenses for similar funds and the services to be provided.

IV. Voting Shares of Foreign Issuers

In the event Western Asset is required to vote on securities held in foreign
issuers--i.e. issuers that are incorporated under the laws of a foreign
jurisdiction and that are not listed on a U.S. securities exchange or the
NASDAQ stock market, the following guidelines are used, which are premised on
the existence of a sound corporate governance and disclosure framework. These
guidelines, however, may not be appropriate under some circumstances for
foreign issuers and therefore apply only where applicable.

1. Western Asset votes for shareholder proposals calling for a majority of
the directors to be independent of management.

2. Western Asset votes for shareholder proposals seeking to increase the
independence of board nominating, audit and compensation committees.

3. Western Asset votes for shareholder proposals that implement corporate
governance standards similar to those established under U.S. federal law and
the listing requirements of U.S. stock exchanges, and that do not otherwise
violate the laws of the jurisdiction under which the company is incorporated.

4. Western Asset votes on a case-by-case basis on proposals relating to
(1) the issuance of common stock in excess of 20% of a company's outstanding
common stock where shareholders do not have preemptive rights, or (2) the
issuance of common stock in excess of 100% of a company's outstanding common
stock where shareholders have preemptive rights.

CLEARBRIDGE ADVISORS
PROXY VOTING POLICIES AND PROCEDURES

AMENDED AND RESTATED AS OF JUNE 26, 2007

I. TYPES OF ACCOUNTS FOR WHICH CLEARBRIDGE VOTES PROXIES 2
II. GENERAL GUIDELINES 2
III. HOW CLEARBRIDGE VOTES 2
IV. CONFLICTS OF INTEREST 2
V. VOTING POLICY 4

(1) ELECTION OF DIRECTORS 5
(2) PROXY CONTESTS 6
(3) AUDITORS 6
(4) PROXY CONTEST DEFENSES 7
(5) TENDER OFFER DEFENSES 8
(6) MISCELLANEOUS GOVERNANCE PROVISIONS 9
(7) CAPITAL STRUCTURE 10
(8) EXECUTIVE AND DIRECTOR COMPENSATION 11
(9) STATE OF INCORPORATION 13
(10) MERGERS AND CORPORATE RESTRUCTURING 14
(11) SOCIAL AND ENVIRONMENTAL ISSUES 14
(12) MISCELLANEOUS 15

VI. OTHER CONSIDERATIONS 16

(1) SHARE BLOCKING 16
(2) SECURITIES ON LOAN 16

VII. DISCLOSURE OF PROXY VOTING 17
VIII. RECORDKEEPING AND OVERSIGHT 17

CLEARBRIDGE ADVISORS'/1/
PROXY VOTING POLICIES AND PROCEDURES

I. TYPES OF ACCOUNTS FOR WHICH CLEARBRIDGE VOTES PROXIES

ClearBridge votes proxies for each client that has specifically authorized
us to vote them in the investment management contract or otherwise and votes
proxies for each ERISA account unless the plan document or investment advisory
agreement specifically reserves the responsibility to vote proxies to the plan
trustees or other named fiduciary. These policies and procedures are intended
to fulfill applicable requirements imposed on ClearBridge by the Investment
Advisers Act of 1940, as amended, the Investment Company Act of 1940, as
amended, and the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations adopted under these laws.

II. GENERAL GUIDELINES

In voting proxies, we are guided by general fiduciary principles. Our goal
is to act prudently, solely in the best interest of the beneficial owners of
the accounts we manage and, in the case of ERISA accounts, for the exclusive
purpose of providing economic benefits to such persons. We attempt to provide
for the consideration of all factors that could affect the value of the
investment and will vote proxies in the manner that we believe will be
consistent with efforts to maximize shareholder values.

III. HOW CLEARBRIDGE VOTES

Section V of these policies and procedures sets forth certain stated
positions. In the case of a proxy issue for which there is a stated position,
we generally vote in accordance with the stated position. In the case of a
proxy issue for which there is a list of factors set forth in Section V that we
consider in voting on such issue, we consider those factors and vote on a
case-by-case basis in accordance with the general principles set forth above.
In the case of a proxy issue for which there is no stated position or list of
factors that we consider in voting on such issue, we vote on a case-by-case
basis in accordance with the general principles set forth above. We may utilize
an external service provider to provide us with information and/or a
recommendation with regard to proxy votes but we are not required to follow any
such recommendations. The use of an external service provider does not relieve
us of our responsibility for the proxy vote.

For routine matters, we usually vote according to our policy or the external
service provider's recommendation, although we are not obligated to do so and
an individual portfolio manager may vote contrary to our policy or the
recommendation of the external service provider. If a matter is non-routine,
E.G., management's recommendation is different than that of the external
service provider and ClearBridge is a significant holder or it is a significant
holding for ClearBridge, the issues will be highlighted to the appropriate
investment teams and their views solicited by members of the Proxy Committee.
Different investment teams may vote differently on the same issue, depending
upon their assessment of clients' best interests.

ClearBridge's proxy voting process is overseen and coordinated by its Proxy
Committee.

IV. CONFLICTS OF INTEREST

In furtherance of ClearBridge's goal to vote proxies in the best interests
of clients, ClearBridge follows procedures designed to identify and address
material conflicts that may arise between ClearBridge's interests and those of
its clients before voting proxies on behalf of such clients.

(1) Procedures for Identifying Conflicts of Interest

- - --------
/1/ These policies and procedures pertain to ClearBridge Advisors, LLC,
ClearBridge Asset Management Inc. and Smith Barney Fund Management, LLC
(collectively, "ClearBridge")

ClearBridge relies on the following to seek to identify conflicts of
interest with respect to proxy voting:

A. The policy memorandum attached hereto as Appendix A will be distributed
periodically to ClearBridge employees. The policy memorandum alerts
ClearBridge employees that they are under an obligation (i) to be aware of
the potential for conflicts of interest on the part of ClearBridge with
respect to voting proxies on behalf of client accounts both as a result of
their personal relationships and due to special circumstances that may
arise during the conduct of ClearBridge's business, and (ii) to bring
conflicts of interest of which they become aware to the attention of
ClearBridge Compliance.

B. ClearBridge's finance area shall maintain and make available to
ClearBridge Compliance and proxy voting personnel an up- to-date list of
all client relationships that have historically accounted for or are
projected to account for greater than 1% of ClearBridge's annual revenues.
ClearBridge relies on the policy memorandum directive described in Section
IV. (1) A. to identify conflicts of interest arising due to potential
client relationships with proxy issuers.

C. As a general matter, ClearBridge takes the position that relationships
between a non-ClearBridge Legg Mason affiliate and an issuer (E.G.,
investment management relationship between an issuer and a non-ClearBridge
Legg Mason affiliate) do not present a conflict of interest for
ClearBridge in voting proxies with respect to such issuer because
ClearBridge operates as an independent business unit from other Legg Mason
business units and because of the existence of informational barriers
between ClearBridge and certain other Legg Mason business units. Special
circumstances, such as contact between ClearBridge and non-ClearBridge
personnel, may cause ClearBridge to consider whether non-ClearBridge
relationships between Legg Mason and an issuer present a conflict of
interest for ClearBridge with respect to such issuer. As noted in Section
IV. (1) A., ClearBridge employees are under an obligation to be aware of
the potential for conflicts of interest in voting proxies and to bring
such conflicts of interest, including conflicts of interest which may
arise because of such special circumstances (such as any attempt by a Legg
Mason business unit or Legg Mason officer or employee to influence proxy
voting by ClearBridge) to the attention of ClearBridge Compliance. Also,
ClearBridge is sensitive to the fact that a significant, publicized
relationship between an issuer and a non-ClearBridge Legg Mason affiliate
might appear to the public to influence the manner in which ClearBridge
decides to vote a proxy with respect to such issuer. For prudential
reasons, ClearBridge treats such significant, publicized relationships as
creating a potential conflict of interest for ClearBridge in voting
proxies.

D. Based on information furnished by ClearBridge employees or maintained
by ClearBridge Compliance pursuant to Section IV. (1) A. and C. and by
ClearBridge Financial Control pursuant to Section IV. (1) B., ClearBridge
Compliance shall maintain an up to date list of issuers with respect to
which ClearBridge has a potential conflict of interest in voting proxies
on behalf of client accounts. ClearBridge shall not vote proxies relating
to issuers on such list on behalf of client accounts until it has been
determined that the conflict of interest is not material or a method for
resolving such conflict of interest has been agreed upon and implemented,
as described in Section IV below. Exceptions apply: (i) with respect to a
proxy issue that will be voted in accordance with a stated ClearBridge
position on such issue, and (ii) with respect to a proxy issue that will
be voted in accordance with the recommendation of an independent third
party based on application of the policies set forth herein. Such issues
generally are not brought to the attention of the Proxy Committee
described in Section IV. (2) Because ClearBridge's position is that any
conflict of interest issues are resolved by voting in accordance with a
pre-determined policy or in accordance with the recommendation of an
independent third party based on application of the policies set forth
herein.

(2) Procedures for Assessing Materiality of Conflicts of Interest and for
Addressing Material Conflicts of Interest

A. ClearBridge maintains a Proxy Committee which, among other things,
reviews and addresses conflicts of interest brought to its attention. The
Proxy Committee shall be comprised of such ClearBridge personnel as are
designated from time to time. The current members of the Proxy Committee
are set forth on Appendix B hereto.

B. All conflicts of interest identified pursuant to the procedures
outlined in Section IV.(1) must be brought to the attention of the Proxy
Committee by ClearBridge Compliance for resolution. As noted above, a
proxy issue that will be voted in accordance with a stated ClearBridge
position on such issue or in accordance with the recommendation of an
independent third party generally is not brought to the attention of the
Proxy Committee for a conflict of interest review because ClearBridge's
position is that any conflict of interest issues are resolved by voting in
accordance with a predetermined policy or in accordance with the
recommendation of an independent third party.

C. The Proxy Committee shall determine whether a conflict of interest is
material. A conflict of interest will be considered material to the extent
that it is determined that such conflict is likely to influence, or appear
to influence, ClearBridge's decision-making in voting the proxy. All
materiality determinations will be based on an assessment of the
particular facts and circumstances. A written record of all materiality
determinations made by the Proxy Committee will be maintained.

D. If it is determined by the Proxy Committee that a conflict of interest
is not material, ClearBridge may vote proxies notwithstanding the
existence of the conflict.

E. If it is determined by the Proxy Committee that a conflict of interest
is material, the Proxy Committee shall determine an appropriate method to
resolve such conflict of interest before the proxy affected by
the conflict of interest is voted. Such determination shall be based on
the particular facts and circumstances, including the importance of the
proxy issue, the nature of the conflict of interest, etc. Such methods
may include:

i. disclosing the conflict to clients and obtaining their consent
before voting;

ii. suggesting to clients that they engage another party to vote the
proxy on their behalf;

iii. in the case of a conflict of interest resulting from a particular
employee's personal relationships, removing such employee from the
decision-making process with respect to such proxy vote; or

iv. such other method as is deemed appropriate given the particular
facts and circumstances, including the importance of the proxy issue, the
nature of the conflict of interest, etc.*

A written record of the method used to resolve a material conflict of
interest shall be maintained.

(3) Third Party Proxy Voting Firm--Conflicts of Interests

With respect to a third party proxy voting firm described herein, the
Proxy Committee will periodically review and assess such firm's policies,
procedures and practices with respect to the disclosure and handling of
conflicts of interest.

V. VOTING POLICY

These are policy guidelines that can always be superseded, subject to the
duty to act solely in the best interest of the beneficial owners of accounts,
by the investment management professionals responsible for the account holding
the shares being voted. There may be occasions when different investment teams
vote differently on the same issue. A ClearBridge investment team (E.G.,
ClearBridge's Social Awareness Investment team) may adopt proxy voting policies
that supplement these policies and procedures. In addition, in the case of
Taft-Hartley clients, ClearBridge will comply with a client direction to vote
proxies in accordance with Institutional Shareholder Services' (ISS) PVS Proxy
Voting Guidelines, which ISS represents to be fully consistent with AFL-CIO
guidelines.

- - --------
* Especially in the case of an apparent, as opposed to actual, conflict of
interest, the Proxy Committee may resolve such conflict of interest by
satisfying itself that ClearBridge's proposed vote on a proxy issue is in
the best interest of client accounts and is not being influenced by the
conflict of interest.

(1) Election of Directors

A. Voting on Director Nominees in Uncontested Elections.

1. We withhold our vote from a director nominee who:

(a) attended less than 75 percent of the company's board and
committee meetings without a valid excuse (illness, service to the
nation/local government, work on behalf of the company);

(b) were members of the company's board when such board failed to act
on a shareholder proposal that received approval of a majority of shares
cast for the previous two consecutive years;

(c) received more than 50 percent withheld votes of the shares cast
at the previous board election, and the company has failed to address
the issue as to why;

(d) is an insider where: (1) such person serves on any of the audit,
compensation or nominating committees of the company's board, (2) the
company's board performs the functions typically performed by a
company's audit, compensation and nominating committees, or (3) the full
board is less than a majority independent;

(e) is a member of the company's audit committee, when excessive
non-audit fees were paid to the auditor, or there are chronic control
issues and an absence of established effective control mechanisms.

2. We vote for all other director nominees.

B. Chairman and CEO is the Same Person.

1. We vote on a case-by-case basis on shareholder proposals that would
require the positions of the Chairman and CEO to be held by different
persons. We would generally vote FOR such a proposal unless there are
compelling reasons to vote against the proposal, including:

. Designation of a lead director

. Majority of independent directors (supermajority)

. All independent key committees

. Size of the company (based on market capitalization)

. Established governance guidelines

. Company performance

C. Majority of Independent Directors

1. We vote for shareholder proposals that request that the board be
comprised of a majority of independent directors. Generally that would
require that the director have no connection to the company other than the
board seat. In determining whether an independent director is truly
independent (e.g. when voting on a slate of director candidates), we
consider certain factors including, but not necessarily limited to, the
following: whether the director or his/her company provided professional
services to the company or its affiliates either currently or in the past
year; whether the director has any transactional relationship with the
company; whether the director is a significant customer or supplier of the
company; whether the director is employed by a foundation or university
that received significant grants or endowments from the company or its
affiliates; and whether there are interlocking directorships.

2. We vote for shareholder proposals that request that the board audit,
compensation and/or nominating committees include independent directors
exclusively.

D. Stock Ownership Requirements

1. We vote against shareholder proposals requiring directors to own a
minimum amount of company stock in order to qualify as a director, or to
remain on the board.

E. Term of Office

1. We vote against shareholder proposals to limit the tenure of
independent directors.

F. Director and Officer Indemnification and Liability Protection

1. Subject to subparagraphs 2, 3, and 4 below, we vote for proposals
concerning director and officer indemnification and liability protection.

2. We vote for proposals to limit and against proposals to eliminate
entirely director and officer liability for monetary damages for violating
the duty of care.

3. We vote against indemnification proposals that would expand coverage
beyond just legal expenses to acts, such as negligence, that are more
serious violations of fiduciary obligations than mere carelessness.

4. We vote for only those proposals that provide such expanded coverage
noted in subparagraph 3 above in cases when a director's or officer's
legal defense was unsuccessful if: (1) the director was found to have
acted in good faith and in a manner that he reasonably believed was in the
best interests of the company, AND (2) if only the director's legal
expenses would be covered.

G. Director Qualifications

1. We vote case-by-case on proposals that establish or amend director
qualifications. Considerations include how reasonable the criteria are and
to what degree they may preclude dissident nominees from joining the board.

2. We vote against shareholder proposals requiring two candidates per
board seat.

(2) Proxy Contests

A. Voting for Director Nominees in Contested Elections

1. We vote on a case-by-case basis in contested elections of directors.
Considerations include: chronology of events leading up to the proxy
contest; qualifications of director nominees (incumbents and dissidents);
for incumbents, whether the board is comprised of a majority of outside
directors; whether key committees (ie: nominating, audit, compensation)
comprise solely of independent outsiders; discussion with the respective
portfolio manager(s).

B. Reimburse Proxy Solicitation Expenses

1. We vote on a case-by-case basis on proposals to provide full
reimbursement for dissidents waging a proxy contest. Considerations
include: identity of persons who will pay solicitation expenses; cost of
solicitation; percentage that will be paid to proxy solicitation firms.

(3) Auditors

A. Ratifying Auditors

1. We vote for proposals to ratify auditors, unless an auditor has a
financial interest in or association with the company, and is therefore
not independent; or there is reason to believe that the independent
auditor has rendered an opinion that is neither accurate nor indicative of
the company's financial position or there is reason to believe the
independent auditor has not followed the highest level of ethical conduct.
Specifically, we will vote to ratify auditors if the auditors only provide
the company audit services and such other audit-related and non-audit
services the provision of which will not cause such auditors to lose their
independence under applicable laws, rules and regulations.

B. Financial Statements and Director and Auditor Reports

1. We generally vote for management proposals seeking approval of
financial accounts and reports and the discharge of management and
supervisory board members, unless there is concern about the past actions
of the company's auditors or directors.

C. Remuneration of Auditors

1. We vote for proposals to authorize the board or an audit committee
of the board to determine the remuneration of auditors, unless there is
evidence of excessive compensation relative to the size and nature of the
company.

D. Indemnification of Auditors

1. We vote against proposals to indemnify auditors.

(4) Proxy Contest Defenses

A. Board Structure: Staggered vs. Annual Elections

1. We vote against proposals to classify the board.

2. We vote for proposals to repeal classified boards and to elect all
directors annually.

B. Shareholder Ability to Remove Directors

1. We vote against proposals that provide that directors may be removed
ONLY for cause.

2. We vote for proposals to restore shareholder ability to remove
directors with or without cause.

3. We vote against proposals that provide that only continuing
directors may elect replacements to fill board vacancies.

4. We vote for proposals that permit shareholders to elect directors to
fill board vacancies.

C. Cumulative Voting

1. If plurality voting is in place for uncontested director elections,
we vote for proposals to permit or restore cumulative voting.

2. If majority voting is in place for uncontested director elections,
we vote against cumulative voting.

3. If plurality voting is in place for uncontested director elections,
and proposals to adopt both cumulative voting and majority voting are on
the same slate, we vote for majority voting and against cumulative voting.

D. Majority Voting

1. We vote for non-binding and/or binding resolutions requesting that
the board amend a company's by-laws to stipulate that directors need to be
elected with an affirmative majority of the votes cast, provided that it
does not conflict with the state law where the company is incorporated. In
addition, all resolutions need to provide for a carve-out for a plurality
vote standard when there are more nominees than board seats (i.e.
contested election). In addition, ClearBridge strongly encourages
companies to adopt a post-election director resignation policy setting
guidelines for the company to follow to promptly address situations
involving holdover directors.

E. Shareholder Ability to Call Special Meetings

1. We vote against proposals to restrict or prohibit shareholder
ability to call special meetings.

2. We vote for proposals that remove restrictions on the right of
shareholders to act independently of management.

F. Shareholder Ability to Act by Written Consent

1. We vote against proposals to restrict or prohibit shareholder
ability to take action by written consent.

2. We vote for proposals to allow or make easier shareholder action by
written consent.

G. Shareholder Ability to Alter the Size of the Board

1. We vote for proposals that seek to fix the size of the board.

2. We vote against proposals that give management the ability to alter
the size of the board without shareholder approval.

H. Advance Notice Proposals

1. We vote on advance notice proposals on a case-by-case basis, giving
support to those proposals which allow shareholders to submit proposals as
close to the meeting date as reasonably possible and within the broadest
window possible.

I. Amendment of By-Laws

1. We vote against proposals giving the board exclusive authority to
amend the by-laws.

2. We vote for proposals giving the board the ability to amend the
by-laws in addition to shareholders.

J. Article Amendments (not otherwise covered by ClearBridge Proxy Voting
Policies and Procedures).

We review on a case-by-case basis all proposals seeking amendments to
the articles of association.

We vote for article amendments if:

. shareholder rights are protected;

. there is negligible or positive impact on shareholder value;

. management provides adequate reasons for the amendments; and

. the company is required to do so by law (if applicable).

(5) Tender Offer Defenses

A. Poison Pills

1. We vote for shareholder proposals that ask a company to submit its
poison pill for shareholder ratification.

2. We vote on a case-by-case basis on shareholder proposals to redeem a
company's poison pill. Considerations include: when the plan was
originally adopted; financial condition of the company; terms of the
poison pill.

3. We vote on a case-by-case basis on management proposals to ratify a
poison pill. Considerations include: sunset provision--poison pill is
submitted to shareholders for ratification or rejection every 2 to 3
years; shareholder redemption feature -10% of the shares may call a
special meeting or seek a written consent to vote on rescinding the rights
plan.

B. Fair Price Provisions

1. We vote for fair price proposals, as long as the shareholder vote
requirement embedded in the provision is no more than a majority of
disinterested shares.

2. We vote for shareholder proposals to lower the shareholder vote
requirement in existing fair price provisions.

C. Greenmail

1. We vote for proposals to adopt anti-greenmail charter or bylaw
amendments or otherwise restrict a company's ability to make greenmail
payments.

2. We vote on a case-by-case basis on anti-greenmail proposals when
they are bundled with other charter or bylaw amendments.

D. Unequal Voting Rights

1. We vote against dual class exchange offers.

2. We vote against dual class re-capitalization.

E. Supermajority Shareholder Vote Requirement to Amend the Charter or
Bylaws

1. We vote against management proposals to require a supermajority
shareholder vote to approve charter and bylaw amendments.

2. We vote for shareholder proposals to lower supermajority shareholder
vote requirements for charter and bylaw amendments.

F. Supermajority Shareholder Vote Requirement to Approve Mergers

1. We vote against management proposals to require a supermajority
shareholder vote to approve mergers and other significant business
combinations.

2. We vote for shareholder proposals to lower supermajority shareholder
vote requirements for mergers and other significant business combinations.

G. White Squire Placements

1. We vote for shareholder proposals to require approval of blank check
preferred stock issues.

(6) Miscellaneous Governance Provisions

A. Confidential Voting

1. We vote for shareholder proposals that request corporations to adopt
confidential voting, use independent tabulators and use independent
inspectors of election as long as the proposals include clauses for proxy
contests as follows: in the case of a contested election, management is
permitted to request that the dissident group honor its confidential
voting policy. If the dissidents agree, the policy remains in place. If
the dissidents do not agree, the confidential voting policy is waived.

2. We vote for management proposals to adopt confidential voting
subject to the proviso for contested elections set forth in sub-paragraph
A.1 above.

B. Equal Access

1. We vote for shareholder proposals that would allow significant
company shareholders equal access to management's proxy material in order
to evaluate and propose voting recommendations on proxy proposals and
director nominees, and in order to nominate their own candidates to the
board.

C. Bundled Proposals

1. We vote on a case-by-case basis on bundled or "conditioned" proxy
proposals. In the case of items that are conditioned upon each other, we
examine the benefits and costs of the packaged items. In instances when
the joint effect of the conditioned items is not in shareholders' best
interests and therefore not in the best interests of the beneficial owners
of accounts, we vote against the proposals. If the combined effect is
positive, we support such proposals.

D. Shareholder Advisory Committees

1. We vote on a case-by-case basis on proposals to establish a
shareholder advisory committee. Considerations include: rationale and cost
to the firm to form such a committee. We generally vote against such
proposals if the board and key nominating committees are comprised solely
of independent/outside directors.

E. Other Business

We vote for proposals that seek to bring forth other business matters.

F. Adjourn Meeting

We vote on a case-by-case basis on proposals that seek to adjourn a
shareholder meeting in order to solicit additional votes.

G. Lack of Information

We vote against proposals if a company fails to provide shareholders
with adequate information upon which to base their voting decision.

(7) Capital Structure

A. Common Stock Authorization

1. We vote on a case-by-case basis on proposals to increase the number
of shares of common stock authorized for issue, except as described in
paragraph 2 below.

2. Subject to paragraph 3, below we vote for the approval requesting
increases in authorized shares if the company meets certain criteria:

a) Company has already issued a certain percentage (i.e. greater than
50%) of the company's allotment.

b) The proposed increase is reasonable (i.e. less than 150% of
current inventory) based on an analysis of the company's historical
stock management or future growth outlook of the company.

3. We vote on a case-by-case basis, based on the input of affected
portfolio managers, if holding is greater than 1% of an account.

B. Stock Distributions: Splits and Dividends

1. We vote on a case-by-case basis on management proposals to increase
common share authorization for a stock split, provided that the split does
not result in an increase of authorized but un-issued shares of more than
100% after giving effect to the shares needed for the split.

C. Reverse Stock Splits

1. We vote for management proposals to implement a reverse stock split,
provided that the reverse split does not result in an increase of
authorized but unissued shares of more than 100% after giving effect to
the shares needed for the reverse split.

D. Blank Check Preferred Stock

1. We vote against proposals to create, authorize or increase the
number of shares with regard to blank check preferred stock with
unspecified voting, conversion, dividend distribution and other rights.

2. We vote for proposals to create "declawed" blank check preferred
stock (stock that cannot be used as a takeover defense).

3. We vote for proposals to authorize preferred stock in cases where
the company specifies the voting, dividend, conversion, and other rights
of such stock and the terms of the preferred stock appear reasonable.

4. We vote for proposals requiring a shareholder vote for blank check
preferred stock issues.

E. Adjust Par Value of Common Stock

1. We vote for management proposals to reduce the par value of common
stock.

F. Preemptive Rights

1. We vote on a case-by-case basis for shareholder proposals seeking to
establish them and consider the following factors:

a) Size of the Company.

b) Characteristics of the size of the holding (holder owning more
than 1% of the outstanding shares).

c) Percentage of the rights offering (rule of thumb less than 5%).

2. We vote on a case-by-case basis for shareholder proposals seeking
the elimination of pre-emptive rights.

G. Debt Restructuring

1. We vote on a case-by-case basis for proposals to increase common
and/or preferred shares and to issue shares as part of a
debt-restructuring plan. Generally, we approve proposals that facilitate
debt restructuring.

H. Share Repurchase Programs

1. We vote for management proposals to institute open-market share
repurchase plans in which all shareholders may participate on equal terms.

I. Dual-Class Stock

1. We vote for proposals to create a new class of nonvoting or
subvoting common stock if:

. It is intended for financing purposes with minimal or no dilution
to current shareholders

. It is not designed to preserve the voting power of an insider or
significant shareholder

J. Issue Stock for Use with Rights Plan

1. We vote against proposals that increase authorized common stock for
the explicit purpose of implementing a shareholder rights plan (poison
pill).

K. Debt Issuance Requests

When evaluating a debt issuance request, the issuing company's present
financial situation is examined. The main factor for analysis is the
company's current debt-to-equity ratio, or gearing level. A high gearing
level may incline markets and financial analysts to downgrade the
company's bond rating, increasing its investment risk factor in the
process. A gearing level up to 100 percent is considered acceptable.

We vote for debt issuances for companies when the gearing level is
between zero and 100 percent.

We view on a case-by-case basis proposals where the issuance of debt
will result in the gearing level being greater than 100 percent. Any
proposed debt issuance is compared to industry and market standards.

L. Financing Plans

We generally vote for the adopting of financing plans if we believe
they are in the best economic interests of shareholders.

(8) Executive and Director Compensation

In general, we vote for executive and director compensation plans, with the
view that viable compensation programs reward the creation of stockholder
wealth by having high payout sensitivity to increases in shareholder value.
Certain factors, however, such as repricing underwater stock options without
shareholder approval, would cause us to vote against a plan. Additionally, in
some cases we would vote against a plan deemed unnecessary.

A. OBRA-Related Compensation Proposals

1. Amendments that Place a Cap on Annual Grant or Amend Administrative
Features

a) We vote for plans that simply amend shareholder-approved plans to
include administrative features or place a cap on the annual grants any
one participant may receive to comply with the provisions of
Section 162(m) of the Internal Revenue Code.

2. Amendments to Added Performance-Based Goals

a) We vote for amendments to add performance goals to existing
compensation plans to comply with the provisions of Section 162(m) of
the Internal Revenue Code.

3. Amendments to Increase Shares and Retain Tax Deductions Under OBRA

a) We vote for amendments to existing plans to increase shares
reserved and to qualify the plan for favorable tax treatment under the
provisions of Section 162(m) the Internal Revenue Code.

4. Approval of Cash or Cash-and-Stock Bonus Plans

a) We vote for cash or cash-and-stock bonus plans to exempt the
compensation from taxes under the provisions of Section 162(m) of the
Internal Revenue Code.

B. Expensing of Options

We vote for proposals to expense stock options on financial statements.

C. Index Stock Options

We vote on a case by case basis with respect to proposals seeking to
index stock options. Considerations include whether the issuer expenses
stock options on its financial statements and whether the issuer's
compensation committee is comprised solely of independent directors.

D. Shareholder Proposals to Limit Executive and Director Pay

1. We vote on a case-by-case basis on all shareholder proposals that
seek additional disclosure of executive and director pay information.
Considerations include: cost and form of disclosure. We vote for such
proposals if additional disclosure is relevant to shareholder's needs and
would not put the company at a competitive disadvantage relative to its
industry.

2. We vote on a case-by-case basis on all other shareholder proposals
that seek to limit executive and director pay.

We have a policy of voting to reasonably limit the level of options and
other equity-based compensation arrangements available to management to
reasonably limit shareholder dilution and management compensation. For
options and equity-based compensation arrangements, we vote FOR proposals
or amendments that would result in the available awards being less than
10% of fully diluted outstanding shares (i.e. if the combined total of
shares, common share equivalents and options available to be awarded under
all current and proposed compensation plans is less than 10% of fully
diluted shares). In the event the available awards exceed the 10%
threshold, we would also consider the % relative to the common practice of
its specific industry (e.g. technology firms). Other considerations would
include, without limitation, the following:

. Compensation committee comprised of independent outside directors

. Maximum award limits

. Repricing without shareholder approval prohibited

E. Golden Parachutes

1. We vote for shareholder proposals to have golden parachutes
submitted for shareholder ratification.

2. We vote on a case-by-case basis on all proposals to ratify or cancel
golden parachutes. Considerations include: the amount should not exceed 3
times average base salary plus guaranteed benefits; golden parachute
should be less attractive than an ongoing employment opportunity with the
firm.

F. Employee Stock Ownership Plans (ESOPs)

1. We vote for proposals that request shareholder approval in order to
implement an ESOP or to increase authorized shares for existing ESOPs,
except in cases when the number of shares allocated to the ESOP is
"excessive" (i.e., generally greater than five percent of outstanding
shares).

G. 401(k) Employee Benefit Plans

1. We vote for proposals to implement a 401(k) savings plan for
employees.

H. Stock Compensation Plans

1. We vote for stock compensation plans which provide a
dollar-for-dollar cash for stock exchange.

2. We vote on a case-by-case basis for stock compensation plans which
do not provide a dollar-for-dollar cash for stock exchange using a
quantitative model.

I. Directors Retirement Plans

1. We vote against retirement plans for non-employee directors.

2. We vote for shareholder proposals to eliminate retirement plans for
non-employee directors.

J. Management Proposals to Reprice Options

1. We vote on a case-by-case basis on management proposals seeking
approval to reprice options. Considerations include the following:

. Historic trading patterns

. Rationale for the repricing

. Value-for-value exchange

. Option vesting

. Term of the option

. Exercise price

. Participation

K. Shareholder Proposals Recording Executive and Director Pay

1. We vote against shareholder proposals seeking to set absolute levels
on compensation or otherwise dictate the amount or form of compensation.

2. We vote against shareholder proposals requiring director fees be
paid in stock only.

3. We vote for shareholder proposals to put option repricing to a
shareholder vote.

4. We vote on a case-by-case basis for all other shareholder proposals
regarding executive and director pay, taking unto account company
performance, pay level versus peers, pay level versus industry, and long
term corporate outlook.

(9) State/Country of Incorporation

A. Voting on State Takeover Statutes

1. We vote for proposals to opt out of state freeze-out provisions.

2. We vote for proposals to opt out of state disgorgement provisions.

B. Voting on Re-incorporation Proposals

1. We vote on a case-by-case basis on proposals to change a company's
state or country of incorporation. Considerations include: reasons for
re-incorporation (i.e. financial, restructuring, etc); advantages/benefits
for change (i.e. lower taxes); compare the differences in state/country
laws governing the corporation.

C. Control Share Acquisition Provisions

1. We vote against proposals to amend the charter to include control
share acquisition provisions.

2. We vote for proposals to opt out of control share acquisition
statutes unless doing so would enable the completion of a takeover that
would be detrimental to shareholders.

3. We vote for proposals to restore voting rights to the control shares.

4. We vote for proposals to opt out of control share cash-out statutes.

(10) Mergers and Corporate Restructuring

A. Mergers and Acquisitions

1. We vote on a case-by-case basis on mergers and acquisitions.
Considerations include: benefits/advantages of the combined companies
(i.e. economies of scale, operating synergies, increase in market
power/share, etc...); offer price (premium or discount); change in the
capital structure; impact on shareholder rights.

B. Corporate Restructuring

1. We vote on a case-by-case basis on corporate restructuring proposals
involving minority squeeze outs and leveraged buyouts. Considerations
include: offer price, other alternatives/offers considered and review of
fairness opinions.

C. Spin-offs

1. We vote on a case-by-case basis on spin-offs. Considerations include
the tax and regulatory advantages, planned use of sale proceeds, market
focus, and managerial incentives.

D. Asset Sales

1. We vote on a case-by-case basis on asset sales. Considerations
include the impact on the balance sheet/working capital, value received
for the asset, and potential elimination of diseconomies.

E. Liquidations

1. We vote on a case-by-case basis on liquidations after reviewing
management's efforts to pursue other alternatives, appraisal value of
assets, and the compensation plan for executives managing the liquidation.

F. Appraisal Rights

1. We vote for proposals to restore, or provide shareholders with,
rights of appraisal.

G. Changing Corporate Name

1. We vote for proposals to change the "corporate name", unless the
proposed name change bears a negative connotation.

H. Conversion of Securities

1. We vote on a case-by-case basis on proposals regarding conversion of
securities. Considerations include the dilution to existing shareholders,
the conversion price relative to market value, financial issues, control
issues, termination penalties, and conflicts of interest.

I. Stakeholder Provisions

1. We vote against proposals that ask the board to consider
non-shareholder constituencies or other non-financial effects when
evaluating a merger or business combination.

(11) Social and Environmental Issues

A. In general we vote on a case-by-case basis on shareholder social and
environmental proposals, on the basis that their impact on share value can
rarely be anticipated with any high degree of confidence. In

most cases, however, we vote for disclosure reports that seek additional
information, particularly when it appears the company has not adequately
addressed shareholders' social and environmental concerns. In determining
our vote on shareholder social and environmental proposals, we also analyze
the following factors:

1. whether adoption of the proposal would have either a positive or
negative impact on the company's short-term or long-term share value;

2. the percentage of sales, assets and earnings affected;

3. the degree to which the company's stated position on the issues
could affect its reputation or sales, or leave it vulnerable to boycott or
selective purchasing;

4. whether the issues presented should be dealt with through government
or company-specific action;

5. whether the company has already responded in some appropriate manner
to the request embodied in a proposal;

6. whether the company's analysis and voting recommendation to
shareholders is persuasive;

7. what other companies have done in response to the issue;

8. whether the proposal itself is well framed and reasonable;

9. whether implementation of the proposal would achieve the objectives
sought in the proposal; and

10. whether the subject of the proposal is best left to the discretion
of the board.

B. Among the social and environmental issues to which we apply this
analysis are the following:

1. Energy and Environment

2. Equal Employment Opportunity and Discrimination

3. Product Integrity and Marketing

4. Human Resources Issues

(12) Miscellaneous

A. Charitable Contributions

1. We vote against proposals to eliminate, direct or otherwise restrict
charitable contributions.

B. Operational Items

1. We vote against proposals to provide management with the authority
to adjourn an annual or special meeting absent compelling reasons to
support the proposal.

2. We vote against proposals to reduce quorum requirements for
shareholder meetings below a majority of the shares outstanding unless
there are compelling reasons to support the proposal.

3. We vote for by-law or charter changes that are of a housekeeping
nature (updates or corrections).

4. We vote for management proposals to change the date/time/location of
the annual meeting unless the proposed change is unreasonable.

5. We vote against shareholder proposals to change the
date/time/location of the annual meeting unless the current scheduling or
location is unreasonable.

6. We vote against proposals to approve other business when it appears
as voting item.

C. Routine Agenda Items

In some markets, shareholders are routinely asked to approve:

. the opening of the shareholder meeting

. that the meeting has been convened under local regulatory
requirements

. the presence of a quorum

. the agenda for the shareholder meeting

. the election of the chair of the meeting regulatory filings

. the allowance of questions

. the publication of minutes

. the closing of the shareholder meeting

We generally vote for these and similar routine management proposals.

D. Allocation of Income and Dividends

We generally vote for management proposals concerning allocation of
income and the distribution of dividends, unless the amount of the
distribution is consistently and unusually small or large.

E. Stock (Scrip) Dividend Alternatives

1. We vote for most stock (scrip) dividend proposals.

2. We vote against proposals that do not allow for a cash option unless
management demonstrates that the cash option is harmful to shareholder
value.

(13) ClearBridge has determined that registered investment companies,
particularly closed end investment companies, raise special policy issues
making specific voting guidelines frequently inapplicable. To the extent that
ClearBridge has proxy voting authority with respect to shares of registered
investment companies, ClearBridge shall vote such shares in the best interest
of client accounts and subject to the general fiduciary principles set forth
herein without regard to the specific voting guidelines set forth in Section
V. (1) through (12).

The voting policy guidelines set forth in this Section V may be changed from
time to time by ClearBridge in its sole discretion.

VI. OTHER CONSIDERATIONS

In certain situations, ClearBridge may determine not to vote proxies on
behalf of a client because ClearBridge believes that the expected benefit to
the client of voting shares is outweighed by countervailing considerations.
Examples of situations in which ClearBridge may determine not to vote proxies
on behalf of a client include:

(1) SHARE BLOCKING

Proxy voting in certain countries requires "share blocking." This means that
shareholders wishing to vote their proxies must deposit their shares shortly
before the date of the meeting (e.g. one week) with a designated depositary.
During the blocking period, shares that will be voted at the meeting cannot be
sold until the meeting has taken place and the shares have been returned to
client accounts by the designated depositary. In deciding whether to vote
shares subject to share blocking, ClearBridge will consider and weigh, based on
the particular facts and circumstances, the expected benefit to clients of
voting in relation to the detriment to clients of not being able to sell such
shares during the applicable period.

(2) SECURITIES ON LOAN

Certain clients of ClearBridge, such as an institutional client or a mutual
fund for which ClearBridge acts as a sub-adviser, may engage in securities
lending with respect to the securities in their accounts. ClearBridge typically
does not direct or oversee such securities lending activities. To the extent
feasible and practical under the circumstances, ClearBridge will request that
the client recall shares that are on loan so that such shares can be

voted if ClearBridge believes that the expected benefit to the client of voting
such shares outweighs the detriment to the client of recalling such shares
(E.G., foregone income). The ability to timely recall shares for proxy voting
purposes typically is not entirely within the control of ClearBridge and
requires the cooperation of the client and its other service providers. Under
certain circumstances, the recall of shares in time for such shares to be voted
may not be possible due to applicable proxy voting record dates and
administrative considerations.

VII. DISCLOSURE OF PROXY VOTING

ClearBridge employees may not disclose to others outside of ClearBridge
(including employees of other Legg Mason business units) how ClearBridge
intends to vote a proxy absent prior approval from ClearBridge Legal or
Compliance, except that a ClearBridge investment professional may disclose to a
third party (other than an employee of another Legg Mason business unit) how it
intends to vote without obtaining prior approval from ClearBridge Legal or
Compliance if (1) the disclosure is intended to facilitate a discussion of
publicly available information by ClearBridge personnel with a representative
of a company whose securities are the subject of the proxy, (2) the company's
market capitalization exceeds $1 billion and (3) ClearBridge has voting power
with respect to less than 5% of the outstanding common stock of the company. Do
we still want to do this absent preapproval from legal/compliance?

If a ClearBridge employee receives a request to disclose ClearBridge's proxy
voting intentions to, or is otherwise contacted by, another person outside of
ClearBridge (including an employee of another Legg Mason business unit) in
connection with an upcoming proxy voting matter, he/she should immediately
notify ClearBridge Legal/Compliance.

VIII. RECORD KEEPING AND OVERSIGHT

ClearBridge shall maintain the following records relating to proxy voting:

- a copy of these policies and procedures;

- a copy of each proxy form (as voted);

- a copy of each proxy solicitation (including proxy statements) and
related materials with regard to each vote;

- documentation relating to the identification and resolution of conflicts
of interest;

- any documents created by ClearBridge that were material to a proxy
voting decision or that memorialized the basis for that decision; and

- a copy of each written client request for information on how ClearBridge
voted proxies on behalf of the client, and a copy of any written
response by ClearBridge to any (written or oral) client request for
information on how ClearBridge voted proxies on behalf of the requesting
client.

Such records shall be maintained and preserved in an easily accessible place
for a period of not less than five years from the end of the fiscal year during
which the last entry was made on such record, the first two years in an
appropriate office of the ClearBridge adviser.

To the extent that ClearBridge is authorized to vote proxies for a United
States Registered Investment Company, ClearBridge shall maintain such records
as are necessary to allow such fund to comply with its recordkeeping, reporting
and disclosure obligations under applicable laws, rules and regulations.

In lieu of keeping copies of proxy statements, ClearBridge may rely on proxy
statements filed on the EDGAR system as well as on third party records of proxy
statements and votes cast if the third party provides an undertaking to provide
the documents promptly upon request.

APPENDIX A

MEMORANDUM

TO: All ClearBridge Employees
FROM: Legal and Compliance
DATE:
RE: Updated ClearBridge Proxy Voting Policies and Procedures
Conflicts of Interest with respect to Proxy Voting

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

ClearBridge Advisors (ClearBridge) currently has in place proxy voting
policies and procedures designed to ensure that proxies are voted in the best
interest of client accounts. Accompanying this memorandum is a copy of
ClearBridge's Proxy Voting Policies and Procedures that have been updated,
effective as of (DATE). The proxy voting policies and procedures are designed
to comply with the SEC rule under the Investment Advisers Act that addresses an
investment adviser's fiduciary obligation to its clients when voting proxies.
AS DISCUSSED IN MORE DETAIL BELOW, CLEARBRIDGE EMPLOYEES ARE UNDER AN
OBLIGATION (I) TO BE AWARE OF THE POTENTIAL FOR CONFLICTS OF INTEREST ON THE
PART OF CLEARBRIDGE IN VOTING PROXIES ON BEHALF OF CLIENT ACCOUNTS BOTH AS A
RESULT OF AN EMPLOYEE'S PERSONAL RELATIONSHIPS AND DUE TO SPECIAL CIRCUMSTANCES
THAT MAY ARISE DURING THE CONDUCT OF CLEARBRIDGE'S BUSINESS, AND (II) TO BRING
CONFLICTS OF INTEREST OF WHICH THEY BECOME AWARE TO THE ATTENTION OF
CLEARBRIDGE COMPLIANCE.

The updated proxy voting policies and procedures are substantially similar
to the policies and procedures currently in effect in terms of ClearBridge's
stated position on certain types of proxy issues and the factors and
considerations taken into account by ClearBridge in voting on certain other
types of proxy issues.

While, as described in Section IV of the updated policies and procedures,
ClearBridge will seek to identify significant ClearBridge client relationships
and significant, publicized non-ClearBridge Legg Mason affiliate client
relationships/1/ which could present ClearBridge with a conflict of interest in
voting proxies, all ClearBridge employees must play an important role in
helping our organization identify potential conflicts of interest that could
impact ClearBridge's proxy voting. ClearBridge employees need to (i) be aware
of the potential for conflicts of interest on the part of ClearBridge in voting
proxies on behalf of client accounts both as a result of an employee's personal
relationships and due to special circumstances that may arise during the
conduct of ClearBridge's business, and (ii) bring conflicts of interest of
which they become aware to the attention of a ClearBridge compliance officer.

A conflict of interest arises when the existence of a personal or business
relationship on the part of ClearBridge or one of its employees or special
circumstances that arise during the conduct of ClearBridge's business might
influence, or appear to influence, the manner in which ClearBridge decides to
vote a proxy. An example of a personal relationship that creates a potential
conflict of interest would be a situation in which a ClearBridge employee (such
as a portfolio manager or senior level executive) has a spouse or other close
relative who serves as a director or senior executive of a company. An example
of "special circumstances" would be explicit or implicit pressure exerted by a
ClearBridge relationship to try to influence ClearBridge's vote on a proxy with
respect to which the ClearBridge relationship is the issuer. Another example
would be a situation in which there was contact between ClearBridge and
non-ClearBridge personnel in which the non-ClearBridge Legg Mason personnel, on
their own initiative or at the prompting of a client of a non-ClearBridge unit
of Legg Mason, tried to exert pressure to influence ClearBridge's proxy
vote/2/. Of course, the foregoing examples are not exhaustive, and a variety of
situations may arise that raise conflict of interest questions for ClearBridge.
You are encouraged to raise and discuss with ClearBridge Compliance particular
facts and circumstances that you believe may raise conflict of interest issues
for ClearBridge.

As described in Section IV of the updated policies and procedures,
ClearBridge has established a Proxy Committee to assess the materiality of
conflicts of interest brought to its attention by ClearBridge Compliance as
well as to agree upon appropriate methods to resolve material conflicts of
interest before proxies affected by the conflicts of interest are voted/3/. As
described in the updated policies and procedures, there are a variety of
methods and approaches that the Proxy Committee may utilize to resolve material
conflicts of interest. Please note that ClearBridge employees should report all
conflicts of interest of which they become aware to ClearBridge Compliance. It
is up to the Proxy Committee to assess the materiality of conflicts of interest
brought to its attention and to agree upon an appropriate resolution with
respect to conflicts of interest determined to be material.

The obligation of ClearBridge employees to be sensitive to the issue of
conflicts of interest and to bring conflicts of interest to the attention of
ClearBridge Compliance is a serious one. Failure to do so can lead to negative
legal, regulatory, and reputational consequences for the firm as well as to
negative regulatory and disciplinary consequences for the ClearBridge employee.
Please consult with a ClearBridge Compliance officer if you have any questions
concerning your obligations with respect to conflicts of interest under the
updated proxy voting policies and procedures.

- - --------
/1,2/As a general matter, ClearBridge takes the position that relationships
between a non-ClearBridge Legg Mason affiliate and an issuer (e.g.
investment management relationship between an issuer and a non-ClearBridge
Legg Mason affiliate) do not present a conflict of interest for
ClearBridge in voting proxies with respect to such issuer. Such position
is based on the fact that ClearBridge is operated as an independent
business unit from other Legg Mason business units as well as on the
existence of information barriers between ClearBridge and certain other
Legg Mason business units. ClearBridge is sensitive to the fact that a
significant, publicized relationship between an issuer and a
non-ClearBridge Legg Mason affiliate might appear to the public to
influence the manner in which ClearBridge decides to vote a proxy with
respect to such issuer. As noted, ClearBridge seeks to identify such
significant, publicized relationships, and for prudential reasons brings
such identified situations to the attention of the Proxy Committee, as
described herein. Special circumstances, such as those described in the
noted examples, also could cause ClearBridge to consider whether
non-ClearBridge relationships between a Legg Mason affiliate and an issuer
present a conflict of interest for ClearBridge with respect to such issuer.
/3/ Exceptions apply: (i) with respect to a proxy issue that will be voted in
accordance with a stated ClearBridge position on such issue, and (ii) with
respect to a proxy issue that will be voted in accordance with the
recommendation of an independent third party. Such issues are not brought
to the attention of the Proxy Committee because ClearBridge's position is
that to the extent a conflict of interest issue exists, it is resolved by
voting in accordance with a pre-determined policy or in accordance with
the recommendation of an independent third party.

APPENDIX B

PROXY COMMITTEE MEMBERS

INVESTMENT MANAGEMENT REPRESENTATIVES

Michael Magee
Eric Thomson, Secretary
Peter Vanderlee, Chairman

LEGAL REPRESENTATIVES

Leonard Larrabee
Michael Scanlon

COMPLIANCE REPRESENTATIVES

Barbara Manning
Brian Murphy

OPERATIONS

Denise Corsetti
Tammie Kim

At least one representative from each of Investment Management, Legal and
Compliance must participate in any deliberations and decisions of the Proxy
Committee relating to potential conflicts of interest.

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AND PROCEDURE MANUAL

JUNE 30, 2004

AMENDED
MARCH 31, 2005
MAY 16, 2005
MARCH 31, 2007
AUGUST 30, 2007
MARCH 31, 2008

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CONTENTS

1 GENERAL....................................................... 4
Introduction
General Guidelines
Proxy Committee
Conflicts of Interest
Recordkeeping and Disclosure

2 PROPOSALS USUALLY VOTED FOR................................... 7
Director Nominees in Uncontested Elections
Chairman and CEO are the Same Person
Shareholder Ability to Remove Directors
Annual Election of Directors
Shareholder Ability to Alter the Size of the Board
Independent Audit, Compensation and Nominating Committees
Ratifying Auditors
Cumulative Voting
Majority Voting
Fair Price Provisions
White Squire Placements
Equal Access
Stock Distributions: Splits and Dividends
Blank Check Preferred Authorization
Adjustments to Par Value of Common Stock
Share Repurchase Programs
OBRA-Related Compensation Proposals
Appraisal Rights
Changing Corporate Name
Confidential Voting
Golden and Tin Parachutes
Delivery of Electronic Proxy Materials

3 PROPOSALS USUALLY VOTED AGAINST............................... 10
Shareholder Ability to Remove Directors
Staggered Director Elections
Stock Ownership Requirements
Term of Office
Director and Officer Indemnification and Liability Protection
Shareholder Ability to Call Special Meetings
Shareholder Ability to Act by Written Consent
Unequal Voting Rights
Supermajority Shareholder Vote Requirements
Charitable and Political Contributions
Common Stock Authorization

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4 PROPOSALS USUALLY VOTED AS RECOMMENDED BY THE PROXY VOTING
SERVICE........................................................................... 11
Compensation Plans
Stock Option Plans
Employee Stock Ownership Plans
401(k) Employee Benefit Plans
Executive Compensation Advisory Resolutions ("Say-on-Pay")

5 PROPOSALS REQUIRING SPECIAL CONSIDERATION......................................... 11
Director Nominees in Contested Elections
Proxy Contest Defenses
Reimburse Proxy Solicitation Expenses
Tender Offer Defenses
Poison Pills
Greenmail
Bundled Proposals
Shareholder Advisory Committees
Preemptive Rights
Debt Restructurings
Shareholder Proposals to Limit Executive and Director Pay State Takeover Statutes
Reincorporation Proposals
Mergers and Acquisitions
Corporate Restructuring
Spin-offs
Asset Sales
Liquidations
Environment and Social issues
Energy and Environment
Northern Ireland
Military Business
Maquiladora Standards and International Operations Policies
Third World Debt Crisis
Equal Employment Opportunity and Discrimination
Animal Rights
Product Integrity and Marketing
Human Resource Issues
Election of Mutual Fund Trustees
Mutual Fund Investment Advisory Agreement
Mutual Fund Fundamental Investment Restrictions
Mutual Fund Distribution Agreements

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1. GENERAL

A. INTRODUCTION.

Loomis, Sayles & Company, L.P. ("Loomis Sayles") will vote proxies on behalf
of a client if, in its investment management agreement ("IMA") with Loomis
Sayles, the client has delegated to Loomis Sayles the authority to vote proxies
on its behalf. With respect to IMAs executed with clients prior to June 30,
2004, Loomis Sayles assumes that, the proxy voting authority assigned by Loomis
Sayles at account setup is accurate unless the client or their representative
has instructed Loomis Sayles otherwise. Loomis Sayles has adopted and
implemented these policies and procedures ("Proxy Voting Procedures") to ensure
that, where it has voting authority, proxy matters are handled in the best
interest of clients, in accordance with Loomis Sayles' fiduciary duties and SEC
rule 206(4)-6 under the Investment Advisers Act of 1940. In addition to SEC
requirements governing advisers, its Proxy Voting Procedures reflect the
long-standing fiduciary standards and responsibilities for ERISA accounts set
out in Department of Labor Bulletin 94-2, 29 C.F.R. 2509.94-2 (July 29, 1994).

Loomis Sayles uses the services of third parties ("Proxy Voting
Service(s)"), to research and administer the vote on proxies for those accounts
and funds for which Loomis Sayles has voting authority. Each Proxy Voting
Service has a copy of Loomis Sayles' Proxy Voting Procedures and provides vote
recommendations and/or analysis to Loomis Sayles based on Loomis Sayles'
Procedures and the Proxy Voting Service's own research. Loomis Sayles will
generally follow its express policy with input from the Proxy Voting Services
unless the Proxy Committee determines that the client's best interests are
served by voting otherwise.

B. GENERAL GUIDELINES.

The following guidelines will apply when voting proxies on behalf of
accounts for which Loomis Sayles has voting authority.

1. Client's Best Interest. Loomis Sayles' Proxy Voting Procedures are
designed and implemented in a way that is reasonably expected to ensure that
proxy matters are conducted in the best interest of clients. When considering
the best interest of clients, Loomis Sayles has determined that this means
the best investment interest of its clients as shareholders of the issuer.
Loomis Sayles has established its Procedures to assist it in making its proxy
voting decisions with a view to enhancing the value of its clients' interests
in an issuer over the period during which it expects its clients to hold
their investments. Loomis Sayles will vote against proposals that it believes
could adversely impact the current or potential market value of the issuer's
securities during the expected holding period.

2. Client Proxy Voting Policies. Rather than delegating proxy voting
authority to Loomis Sayles, a client may (1) retain the authority to vote
proxies on securities in its account, (2) delegate voting authority to
another party or (3) instruct Loomis Sayles to vote proxies according to a
policy that differs from that of Loomis Sayles. Loomis Sayles will honor any
of these instructions if the client includes the instruction in writing in
its IMA or in a written instruction from a person authorized under the IMA to
give such instructions. If Loomis incurs additional costs or expenses in
following any such instruction, Loomis may request payment of such additional
costs or expenses from the client.

3. Stated Policies. These policies identify issues where Loomis Sayles will
(1) generally vote in favor of a proposal, (2) generally vote against a
proposal, (3) generally vote as recommended by the proxy voting service

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and (4) specifically consider its vote for or against a proposal. However,
these policies are guidelines and each vote may be cast differently than the
stated policy, taking into consideration all relevant facts and circumstances
at the time of the vote.

4. Abstain from Voting. Our policy is to vote-not abstain from voting on
issues presented unless the client's best interest requires abstention. This
may occur from time to time, for example, where the impact of the expected
costs involved in voting exceeds the expected benefits of the vote such as
where foreign corporations follow share-blocking practices or where proxy
material is not available in English.

5. Oversight. All issues presented for shareholder vote will be considered
under the oversight of the Proxy Committee. All non-routine issues will be
directly considered by the Proxy Committee and, when necessary, the equity
analyst following the company and/or the portfolio manager of an account
holding the security, and will be voted in the best investment interests of
the client. All routine for and against issues will be voted according to
Loomis Sayles' policy approved by the Proxy Committee unless special factors
require that they be considered by the Proxy Committee and, when necessary,
the equity analyst following the company and/or the portfolio manager of an
account holding the security. Loomis Sayles' Proxy Committee has established
these routine policies in what it believes are the client's best interests.

6. Availability of Procedures. Upon request, Loomis Sayles provides clients
with a copy of its Proxy Voting Procedures, as updated from time to time. In
addition, Loomis Sayles includes its Proxy Voting Procedures and/or a
description of its Procedures on its public website, www.loomissayles.com,
and in its Form ADV, Part II.

7. Disclosure of Vote. Upon request, a client can obtain information from
Loomis Sayles on how its proxies were voted. Any client interested in
obtaining this information should contact its Loomis Sayles's representatives.

8. Disclosure to Third Parties. Loomis Sayles' general policy is not to
disclose to third parties how it (or its voting delegate) voted a client's
proxy except that for registered investment companies, Loomis Sayles makes
disclosure as required by Rule 30(b)(1)-(4) under the Investment Company Act
of 1940 and, from time to time at the request of client groups, Loomis may
make general disclosure (not specific as to client) of its voting
instructions.

C. PROXY COMMITTEE.

1. Proxy Committee. Loomis Sayles has established a Proxy Committee. The
Proxy Committee is composed of representatives of the Equity Research
department and the Legal & Compliance department and other employees of
Loomis Sayles as needed. In the event that any member is unable to
participate in a meeting of the Proxy Committee, his or her designee acts on
his or her behalf. A vacancy in the Proxy Committee is filled by the prior
member's successor in position at Loomis Sayles or a person of equivalent
experience. Each portfolio manager of an account that holds voting securities
of an issuer or analyst covering the issuer or its securities may be an ad
hoc member of the Proxy Committee in connection with the vote of proxies.

2. Duties. The specific responsibilities of the Proxy Committee, include,

a. to develop, authorize, implement and update these Proxy Voting
Procedures, including

(i) annual review of these Procedures to ensure consistency with
internal policies and regulatory agency policies,

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(ii) annual review of existing voting guidelines and development of
additional voting guidelines to assist in the review of proxy
proposals, and

(iii) annual review of the proxy voting process and any general issues
that relate to proxy voting;

b. to oversee the proxy voting process, including;

(i) overseeing the vote on proposals according to the predetermined
policies in the voting guidelines,

(ii) directing the vote on proposals where there is reason not to vote
according to the predetermined policies in the voting guidelines or
where proposals require special consideration, and

(iii) consulting with the portfolio managers and analysts for the
accounts holding the security when necessary or appropriate;

c. to engage and oversee third-party vendors, including Proxy Voting
Services; and

d. to develop and/or modify these Proxy Voting Procedures as appropriate
or necessary.

3. Standards.

a. When determining the vote of any proposal for which it has
responsibility, the Proxy Committee shall vote in the client's best interest
as described in section 1(B)(1) above. In the event a client believes that
its other interests require a different vote, Loomis Sayles shall vote as
the client instructs if the instructions are provided as required in section
1(B)(2) above.

b. When determining the vote on any proposal, the Proxy Committee shall
not consider any benefit to Loomis Sayles, any of its affiliates, any of its
or their clients or service providers, other than benefits to the owner of
the securities to be voted.

4. Charter. The Proxy Committee may adopt a Charter, which shall be
consistent with these Procedures. Any Charter shall set forth the Committee's
purpose, membership and operation and shall include procedures prohibiting a
member from voting on a matter for which he or she has a conflict of interest
by reason of a direct relationship with the issuer or other party affected by
a given proposal, e.g., is a portfolio manager for an account of the issuer.

D. CONFLICTS OF INTEREST.

Loomis Sayles has established several policies to ensure that proxy votes
are voted in its clients' best interest and are not affected by any possible
conflicts of interest. First, except in certain limited instances, Loomis
Sayles votes in accordance with its pre-determined policies set forth in these
Proxy Voting Procedures. Second, where these Procedures allow for discretion,
Loomis Sayles will generally consider the recommendations of the Proxy Voting
Services in making its voting decisions. However, if the Proxy Committee
determines that the Proxy Voting Services' recommendation is not in the best
interest of its clients, then the Proxy Committee may use its discretion to
vote against the Proxy Voting Services' recommendation, but only after taking
the following steps: (1) conducting a review for any material conflict of
interest Loomis Sayles may have and, (2) if any material conflict is found to
exist, excluding anyone at Loomis Sayles who is subject to that conflict of
interest from participating in the voting decision in any way. However, if
deemed necessary or appropriate by the Proxy Committee after full prior
disclosure of any conflict, that person may provide information, opinions or
recommendations on any proposal to the Proxy Committee. In such event the Proxy

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Committee will make reasonable efforts to obtain and consider, prior to
directing any vote information, opinions or recommendations from or about the
opposing position on any proposal.

E. RECORDKEEPING AND DISCLOSURE.

Loomis Sayles or its Proxy Voting Service will maintain records of proxies
voted pursuant to Section 204-2 of the Advisers Act. The records include: (1) a
copy of its Proxy Voting Procedures and its charter; (2) proxy statements
received regarding client securities; (3) a record of each vote cast; (4) a
copy of any document created by Loomis Sayles that is material to making a
decision how to vote proxies on behalf of a client or that memorializes the
basis for that decision; and (5) each written client request for proxy voting
records and Loomis Sayles' written response to any (written or oral) client
request for such records.

Proxy voting books and records are maintained in an easily accessible place
for a period of five years, the first two in an appropriate office of Loomis
Sayles.

Loomis Sayles will provide disclosure of its Proxy Voting Procedures as well
as its voting record as required under applicable SEC rules.

2. PROPOSALS USUALLY VOTED FOR

Proxies involving the issues set forth below generally will be voted FOR.

Director Nominees in Uncontested Elections:

A. Vote for proposals involving routine matters such as election of
Directors, provided that two-thirds of the directors would be independent and
affiliated or inside nominees do not serve on any board committee.

B. Vote against nominees that are CFOs and, generally, against nominees
that the Proxy Voting Service has identified as not acting in the best
interest of shareholders. Vote against nominees that have attended less than
75% of board and committee meetings. Vote against affiliated or inside
nominees who serve on a board committee or if two thirds of the board would
not be independent. Vote against governance or nominating committee members
if there is no independent lead or presiding director and if the CEO and
chairman are the same person. Vote against audit committee members if auditor
ratification is not proposed.

Chairman and CEO are the Same Person: Vote for proposals that would require
the positions of chairman and CEO to be held by different persons.

Shareholder Ability to Remove Directors: Vote for proposals to restore
shareholder ability to remove directors with or without cause and proposals
that permit shareholders to elect directors to fill board vacancies.

Annual Election of Directors: Vote for proposals to repeal classified boards
and to elect all directors annually.

Shareholder Ability to Alter the Size of the Board:

A. Vote for proposals that seek to fix the size of the board.

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B. Vote against proposals that give management the ability to alter the
size of the board without shareholder approval.

Independent Audit, Compensation and Nominating Committees: Vote for
proposals requesting that the board audit, compensation and/or nominating
committees include independent directors exclusively.

Ratifying Auditors:

A. Generally vote for proposals to ratify auditors.

B. Vote against ratification of auditors where an auditor has a financial
interest in or association with the company, and is therefore not
independent; or there is reason to believe that the independent auditor has
rendered an opinion which is neither accurate nor indicative of the company's
financial position. In general if the ratio of non-audit fees to audit fees
is less than 1:1 or if non-audit fees are less than $500,000 we will
generally vote for ratification. A recommendation of the Proxy Voting Service
will generally be followed.

Cumulative Voting: Vote for proposals to permit cumulative voting.

Majority Voting: Vote for proposals to permit majority rather than plurality
voting for the election of Directors/Trustees.

Fair Price Provisions:

A. Vote for fair price proposals, as long as the shareholder vote
requirement embedded in the provision is no more than a majority of
disinterested shares.

B. Vote for shareholder proposals to lower the shareholder vote requirement
in existing fair price provisions.

White Squire Placements: Vote for shareholder proposals to require
shareholder approval of blank check preferred stock issues.

Equal Access: Vote for shareholder proposals that would allow significant
company shareholders equal access to management's proxy material in order to
evaluate and propose voting recommendations on proxy proposals and director
nominees, and in order to nominate their own candidates to the board.

Stock Distributions: Splits and Dividends: Generally vote for management
proposals to increase common share authorization, provided that the increase in
authorized shares following the split or dividend is not greater than 100
percent of existing authorized shares.

Blank Check Preferred Authorization:

A. Vote for proposals to create blank check preferred stock in cases when
the company expressly states that the stock will not be used as a takeover
defense or carry superior voting rights, and expressly states conversion,
dividend, distribution and other rights.

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B. Vote for shareholder proposals to have blank check preferred stock
placements, other than those shares issued for the purpose of raising capital
or making acquisitions in the normal course of business, submitted for
shareholder ratification.

C. Review on a case-by-case basis proposals to increase the number of
authorized blank check preferred shares.

Adjustments to Par Value of Common Stock: Vote for management proposals to
reduce the par value of common stock.

Share Repurchase Programs: Vote for management proposals to institute
open-market share repurchase plans in which all shareholders may participate on
equal terms.

OBRA (Omnibus Budget Reconciliation Act)-Related Compensation Proposals:

A. Vote for plans that simply amend shareholder-approved plans to include
administrative features or place a cap on the annual grants any one
participant may receive to comply with the provisions of Section 162(m) of
OBRA.

B. Vote for amendments to add performance goals to existing compensation
plans to comply with the provisions of Section 162(m) of OBRA.

C. Vote for cash or cash-and-stock bonus plans to exempt the compensation
from taxes under the provisions of Section 162(m) of OBRA.

D. Votes on amendments to existing plans to increase shares reserved and to
qualify the plan for favorable tax treatment under the provisions of
Section 162(m) should be evaluated on a case-by-case basis.

Appraisal Rights: Vote for proposals to restore, or provide shareholders
with, rights of appraisal.

Changing Corporate Name: Vote for changing the corporate name.

Confidential Voting: Vote for shareholder proposals that request
corporations to adopt confidential voting, use independent tabulators and use
independent inspectors of election as long as the proposals include clauses for
proxy contests as follows: In the case of a contested election, management
should be permitted to request that the dissident group honor its confidential
voting policy. If the dissidents agree, the policy remains in place. If the
dissidents do not agree, the confidential voting policy is waived. Vote for
management proposals to adopt confidential voting.

Golden and Tin Parachutes:

A. Vote for shareholder proposals to have golden (top management) and tin
(all employees) parachutes submitted for shareholder ratification.

B. Review on a case-by-case basis all proposals to ratify or cancel golden
or tin parachutes.

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Delivery of Electronic Proxy Materials: Vote for proposals to allow
electronic delivery of proxy materials to shareholders.

3. PROPOSALS USUALLY VOTED AGAINST

Proxies involving the issues set forth below generally will be voted AGAINST.

Shareholder Ability to Remove Directors:

A. Vote against proposals that provide that directors may be removed only
for cause.

B. Vote against proposals that provide that only continuing directors may
elect replacements to fill board vacancies.

Staggered Director Elections: Vote against proposals to classify or stagger
the board.

Stock Ownership Requirements: Generally vote against shareholder proposals
requiring directors to own a minimum amount of company stock in order to
qualify as a director, or to remain on the board.

Term of Office: Vote against shareholder proposals to limit the tenure of
outside directors.

Director and Officer Indemnification and Liability Protection:

A. Proposals concerning director and officer indemnification and liability
protection that limit or eliminate entirely director and officer liability
for monetary damages for violating the duty of care, or that would expand
coverage beyond just legal expenses to acts, such as gross negligence, that
are more serious violations of fiduciary obligations than mere carelessness.

B. Vote for only those proposals that provide such expanded coverage in
cases when a director's or officer's legal defense was unsuccessful if
(i) the director was found to have acted in good faith and in a manner that
he reasonably believed was in the best interests of the company, and
(ii) only if the director's legal expenses would be covered.

Shareholder Ability to Call Special Meetings: Vote against proposals to
restrict or prohibit shareholder ability to call special meetings.

Shareholder Ability to Act by Written Consent: Vote against proposals to
restrict or prohibit shareholder ability to take action by written consent.

Unequal Voting Rights: Vote against dual class exchange offers and dual
class recapitalizations.

Supermajority Shareholder Vote Requirements: Vote against management
proposals to require a supermajority shareholder vote to approve charter and
bylaw amendments.

Charitable and Political Contributions: Vote against shareholder proposals
regarding charitable and political contributions.

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Common Stock Authorization: Vote against proposed common stock
authorizations that increase the existing authorization by more than 100
percent unless a clear need for the excess shares is presented by the company.
A recommendation of the Proxy Voting Service will generally be followed.

4. PROPOSALS USUALLY VOTED AS RECOMMENDED BY THE PROXY VOTING SERVICE

Proxies involving compensation issues, not limited to those set forth below,
generally will be voted as recommended by the proxy voting service but may, in
the consideration of the Committee, be reviewed on a case-by-case basis.

Compensation Plans: Votes with respect to compensation plans generally will
be voted as recommended by the Proxy Voting Service.

Stock Option Plans: A recommendation of the Proxy Voting Service will
generally be followed using the following as a guide:

A. Vote against plans which expressly permit repricing of underwater
options.

B. Vote against proposals to make all stock options performance based.

C. Vote against stock option plans that could result in an earnings
dilution above the company specific cap considered by the Proxy Voting
Service.

D. Vote for proposals that request expensing of stock options.

Employee Stock Ownership Plans (ESOPs): Vote for proposals that request
shareholder approval in order to implement an ESOP or to increase authorized
shares for existing ESOPs, except in cases when the number of shares allocated
to the ESOP is "excessive" (i.e., generally greater than five percent of
outstanding shares). A recommendation of the Proxy Voting Service will
generally be followed.

401(k) Employee Benefit Plans: Vote for proposals to implement a 401(k)
savings plan for employees.

Executive Compensation Advisory Resolutions ("Say-on-Pay"): A recommendation
of the Proxy Voting Service will generally be followed using the following as a
guide:

A. Vote for shareholder proposals to permit non-binding advisory votes on
executive compensation.

B. Actual executive compensation advisory votes will be considered on a
case-by-case basis.

5. PROPOSALS REQUIRING SPECIAL CONSIDERATION

The Proxy Committee will vote proxies involving the issues set forth below
generally on a case-by-case basis after review. Proposals on many of these
types of matters will typically be reviewed with the analyst following the
company before any vote is cast.

Loomis, Sayles & Company, L.P. March 2008
All Rights Reserved

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PROXY VOTING POLICY AND PROCEDURE MANUAL

Director Nominees in Contested Elections: Votes in a contested election of
directors or vote no campaign must be evaluated on a case-by-case basis,
considering the following factors: long-term financial performance of the
target company relative to its industry; management's track record; background
to the proxy contest; qualifications of director nominees (both slates);
evaluation of what each side is offering shareholders as well as the likelihood
that the proposed objectives and goals can be met; and stock ownership
positions.

Proxy Contest Defenses: Generally, proposals concerning all proxy contest
defenses should be evaluated on a case-by-case basis.

Reimburse Proxy Solicitation Expenses: Decisions to provide full
reimbursement for dissidents waging a proxy contest should be made on a
case-by-case basis.

Tender Offer Defenses: Generally, proposals concerning the following tender
offer defenses should be evaluated on a case-by-case basis.

Poison Pills:

A. Vote for shareholder proposals that ask a company to submit its poison
pill for shareholder ratification.

B. Review on a case-by-case basis shareholder proposals to redeem a
company's poison pill.

C. Review on a case-by-case basis management proposals to ratify a poison
pill.

Greenmail:

A. Vote for proposals to adopt anti-greenmail charter of bylaw amendments
or otherwise restrict a company's ability to make greenmail payments.

B. Review on a case-by-case basis anti-greenmail proposals when they are
bundled with other charter or bylaw amendments.

Bundled Proposals: Review on a case-by-case basis bundled or "conditioned"
proxy proposals. In the case of items that are conditioned upon each other,
examine the benefits and costs of the packaged items. In instances when the
joint effect of the conditioned items is not in shareholders' best interests,
vote against the proposals. If the combined effect is positive, support such
proposals.

Shareholder Advisory Committees: Review on a case-by-case basis proposals to
establish a shareholder advisory committee.

Preemptive Rights: Review on a case-by-case basis shareholder proposals that
seek preemptive rights. In evaluating proposals on preemptive rights, look at
the size of a company and the characteristics of its shareholder base.

Debt Restructurings: Review on a case-by-case basis proposals to increase
common and/or preferred shares and to issue shares as part of a
debt-restructuring plan. Consider the following issues: Dilution--How much will
ownership interest of existing shareholders be reduced, and how extreme will
dilution to any future earnings be?

Loomis, Sayles & Company, L.P. March 2008
All Rights Reserved

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PROXY VOTING POLICY AND PROCEDURE MANUAL

Change in Control--Will the transaction result in a change in control of the
company? Bankruptcy - Loomis Sayles' Corporate Actions Department is
responsible for consents related to bankruptcies and debt holder consents
related to restructurings.

Shareholder Proposals to Limit Executive and Director Pay:

A. Generally, vote for shareholder proposals that seek additional
disclosure of executive and director pay information.

B. Review on a case-by-case basis (I) all shareholder proposals that seek
to limit executive and director pay and (ii) all advisory resolutions on
executive pay other than shareholder resolutions to permit such advisory
resolutions. Vote against proposals to link all executive or director
variable compensation to performance goals.

State Takeover Statutes: Review on a case-by-case basis proposals to opt in
or out of state takeover statutes (including control share acquisition
statutes, control share cash-out statutes, freezeout provisions, fair price
provisions, stakeholder laws, poison pill endorsements, severance pay and labor
contract provisions, antigreenmail provisions, and disgorgement provisions).

Reincorporation Proposals: Proposals to change a company's domicile should
be examined on a case-by-case basis.

Mergers and Acquisitions: Votes on mergers and acquisitions should be
considered on a case-by-case basis, taking into account at least the following:
anticipated financial and operating benefits; offer price (cost vs. premium);
prospects of the combined companies; how the deal was negotiated; and changes
in corporate governance and their impact on shareholder rights.

Corporate Restructuring: Votes on corporate restructuring proposals,
including minority squeezeouts, leveraged buyouts, spin-offs, liquidations, and
asset sales should be considered on a case-by-case basis.

Spin-offs: Votes on spin-offs should be considered on a case-by-case basis
depending on the tax and regulatory advantages, planned use of sale proceeds,
market focus, and managerial incentives.

Asset Sales: Votes on asset sales should be made on a case-by-case basis
after considering the impact on the balance sheet/working capital, value
received for the asset, and potential elimination of diseconomies.

Liquidations: Votes on liquidations should be made on a case-by-case basis
after reviewing management's efforts to pursue other alternatives, appraisal
value of assets, and the compensation plan for executives managing the
liquidation.

Environmental and Social Issues: Proxies involving social and environmental
issues, not limited to those set forth below, frequently will be voted as
recommended by the Proxy Voting Service but may, in the consideration of the
Committee, be reviewed on a case-by-case basis if the Committee believes that a
particular proposal (i) could have a significant impact on an industry or
issuer (ii) is appropriate for the issuer and the cost to

Loomis, Sayles & Company, L.P. March 2008
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PROXY VOTING POLICY AND PROCEDURE MANUAL

implement would not be excessive, (iii) is appropriate for the issuer in light
of various factors such as reputational damage or litigation risk or (iv) is
otherwise appropriate for the issuer.

Energy and Environment: Proposals that request companies to file the
CERES Principles.

Northern Ireland: Proposals pertaining to the MacBride Principles.

Military Business: Proposals on defense issues.

Maquiladora Standards and International Operations Policies: Proposals
relating to the Maquiladora Standards and international operating policies.

Third World Debt Crisis: Proposals dealing with third world debt.

Equal Employment Opportunity and Discrimination: Proposals regarding
equal employment opportunities and discrimination.

Animal Rights: Proposals that deal with animal rights.

Product Integrity and Marketing: Proposals that ask companies to end
their production of legal, but socially questionable, products.

Human Resources Issues: Proposals regarding human resources issues.

Election of Mutual Fund Trustees: Votes on mutual fund trustee nominees
should be evaluated on a case-by-case basis using the director nominee
discussion above as a guide. However, the number of funds for which a nominee
will serve as a director may be considered.

Mutual Fund Investment Advisory Agreement: Votes on mutual fund investment
advisory agreements should be evaluated on a case-by-case basis.

Mutual Fund Fundamental Investment Restrictions: Votes on amendments to a
mutual fund's fundamental investment restrictions should be evaluated on a
case-by-case basis.

Mutual Fund Distribution Agreements: Votes on mutual fund distribution
agreements should be evaluated on a case-by-basis.

Loomis, Sayles & Company, L.P. March 2008
All Rights Reserved

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LORD ABBETT

April 17, 2008

LORD, ABBETT & CO. LLC

PROXY VOTING POLICIES AND PROCEDURES

INTRODUCTION

Lord Abbett has a Proxy Committee responsible for establishing voting
policies and for the oversight of its proxy voting process. Lord Abbett's Proxy
Committee consists of the portfolio managers of each investment team and
certain members of those teams, the Chief Administrative Officer for the
Investment Department, the Firm's Chief Investment Officer and its General
Counsel. Once policy is established, it is the responsibility of each
investment team leader to assure that each proxy for that team's portfolio is
voted in a timely manner in accordance with those policies. In each case where
an investment team declines to follow a recommendation of a company's
management, a detailed explanation of the reason(s) for the decision is entered
into the proxy voting system. Lord Abbett has retained RiskMetrics Group,
formerly Institutional Shareholder Services ("RMG"), to analyze proxy issues
and recommend voting on those issues, and to provide assistance in the
administration of the proxy process, including maintaining complete proxy
voting records.

The Boards of Directors of each of the Lord Abbett Mutual Funds established
several years ago a Proxy Committee, composed solely of independent directors.
The Funds' Proxy Committee Charter provides that the Committee shall
(i) monitor the actions of Lord Abbett in voting securities owned by the Funds;
(ii) evaluate the policies of Lord Abbett in voting securities; (iii) meet with
Lord Abbett to review the policies in voting securities, the sources of
information used in determining how to vote on particular matters, and the
procedures used to determine the votes in any situation where there may be a
conflict of interest.

Lord Abbett is a privately-held firm, and we conduct only one business: we
manage the investment portfolios of our clients. We are not part of a larger
group of companies conducting diverse financial operations. We would therefore
expect, based on our past experience, that the incidence of an actual conflict
of interest involving Lord Abbett's proxy voting process would be limited.
Nevertheless, if a potential conflict of interest were to arise, involving one
or more of the Lord Abbett Funds, where practicable we would disclose this
potential conflict to the affected Funds' Proxy Committees and seek voting
instructions from those Committees in accordance with the procedures described
below under "Specific Procedures for Potential Conflict Situations". If it were
not practicable to seek instructions from those Committees, Lord Abbett would
simply follow its proxy voting policies or, if the particular issue were not
covered by those policies, we would follow a recommendation of RMG. If such a
conflict arose with any other client, Lord Abbett would simply follow its proxy
voting policies or, if the particular issue were not covered by those policies,
we would follow the recommendation of RMG.

SPECIFIC PROCEDURES FOR POTENTIAL CONFLICT SITUATIONS

SITUATION 1. Fund Independent Board Member on Board (or Nominee for Election
to Board) of Publicly Held Company Owned by a Lord Abbett Fund.

Lord Abbett will compile a list of all publicly held companies where an
Independent Board Member serves on the board of directors, or has indicated to
Lord Abbett that he is a nominee for election to the board of directors (a
"Fund Director Company"). If a Lord Abbett Fund owns stock in a Fund Director
Company, and if Lord Abbett has decided not to follow the proxy voting
recommendation of RMG, then Lord Abbett shall bring that issue to the Fund's
Proxy Committee for instructions on how to vote that proxy issue.

The Independent Directors have decided that the Director on the board of the
Fund Director Company will not participate in any discussion by the Fund's
Proxy Committee of any proxy issue for that Fund Director Company or in the
voting instruction given to Lord Abbett.

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LORD ABBETT

SITUATION 2. Lord Abbett has a Significant Business Relationship with a
Company.

Lord Abbett will compile a list of all publicly held companies (or which are
a subsidiary of a publicly held firm) that have a significant business
relationship with Lord Abbett (a "Relationship Firm"). A "significant business
relationship" for this purpose means: (a) a broker dealer firm which sells one
percent or more of the Lord Abbett Funds' total (I.E., gross) dollar amount of
shares sold for the last 12 months; (b) a firm which is a sponsor firm with
respect to Lord Abbett's Separately Managed Account business; (c) an
institutional client which has an investment management agreement with Lord
Abbett; (d) an institutional investor having at least $5 million in Class I
shares of the Lord Abbett Funds; and (e) a large plan 401(k) client with at
least $5 million under management with Lord Abbett.

For each proxy issue involving a Relationship Firm, Lord Abbett shall notify
the Fund's Proxy Committee and shall seek voting instructions from the Fund's
Proxy Committee only in those situations where Lord Abbett has proposed not to
follow the recommendations of RMG.

SUMMARY OF PROXY VOTING GUIDELINES

Lord Abbett generally votes in accordance with management's recommendations
on the election of directors, appointment of independent auditors, changes to
the authorized capitalization (barring excessive increases) and most
shareholder proposals. This policy is based on the premise that a broad vote of
confidence on such matters is due the management of any company whose shares we
are willing to hold.

ELECTION OF DIRECTORS

Lord Abbett will generally vote in accordance with management's
recommendations on the election of directors. However, votes on director
nominees are made on a case-by- case basis. Factors that are considered include
current composition of the board and key- board nominees, long-term company
performance relative to a market index, and the directors' investment in the
company. We also consider whether the Chairman of the board is also serving as
CEO, and whether a retired CEO sits on the board, as these situations may
create inherent conflicts of interest. We generally will vote in favor of
separation of the Chairman and CEO functions when management supports such a
requirement, but we will make our determination to vote in favor of or against
such a proposed requirement on a case-by-case basis.

There are some actions by directors that may result in votes being withheld.

These actions include, but are not limited to:

1) Attending less than 75% of board and committee meetings without a valid
excuse.

2) Ignoring shareholder proposals that are approved by a majority of votes
for two consecutive years.

3) Failing to act on takeover offers where a majority of shareholders
tendered their shares.

4) Serving as inside directors and sit on an audit, compensation, stock
option, nominating or governance committee.

5) Failing to replace management as appropriate.

We will generally vote in favor of proposals requiring that directors be
elected by a majority of the shares represented and voting at a meeting at
which a quorum is present, although special considerations in individual cases
may cause us to vote against such a proposal. We will consider on a
case-by-case basis proposals to elect directors annually. The ability to elect
directors is the single most important use of the shareholder franchise, and,

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LORD ABBETT

as a general matter, we believe that all directors should be accountable on an
annual basis. Nonetheless, we recognize that the basic premise of the staggered
election of directors is to provide a continuity of experience on the board and
to prevent a precipitous change in the composition of the board. Moreover, in
certain cases, shareholders need some form of protection from hostile takeover
attempts, and boards need tools and leverage in order to negotiate effectively
with potential acquirers, and a classified board may give incumbent management
the ability to combat a hostile takeover attempt and thereby preserve
shareholder value. Accordingly, we will examine proposals to classify or
declassify boards of directors on a case-by-case basis and vote in the manner
we determine to be in the best interests of shareholders.

INCENTIVE COMPENSATION PLANS

We usually vote with management regarding employee incentive plans and
changes in such plans, but these issues are looked at very closely on a
case-by-case basis. We use RMG for guidance on appropriate compensation ranges
for various industries and company sizes. In addition to considering the
individual expertise of management and the value they bring to the company, we
also consider the costs associated with stock-based incentive packages
including shareholder value transfer and voting power dilution.

We scrutinize very closely the approval of repricing or replacing underwater
stock options, taking into consideration the following:

1) The stock's volatility, to ensure the stock price will not be back in
the money over the near term.

2) Management's rationale for why the repricing is necessary.

3) The new exercise price, which must be set at a premium to market price
to ensure proper employee motivation.

4) Other factors, such as the number of participants, term of option, and
the value for value exchange.

In large-cap companies we would generally vote against plans that promoted
short-term performance at the expense of longer-term objectives. Dilution,
either actual or potential, is, of course, a major consideration in reviewing
all incentive plans. Team leaders in small- and mid-cap companies often view
option plans and other employee incentive plans as a critical component of such
companies' compensation structure, and have discretion to approve such plans,
notwithstanding dilution concerns.

SHAREHOLDER RIGHTS

Cumulative Voting

We generally oppose cumulative voting proposals on the ground that a
shareowner or special group electing a director by cumulative voting may seek
to have that director represent a narrow special interest rather than the
interests of the shareholders as a whole.

Confidential Voting

There are both advantages and disadvantages to a confidential ballot. Under
the open voting system, any shareholder that desires anonymity may register the
shares in the name of a bank, a broker or some other nominee. A confidential
ballot may tend to preclude any opportunity for the board to communicate with
those who oppose management proposals.

On balance we believe shareholder proposals regarding confidential balloting
should generally be approved, unless in a specific case, countervailing
arguments appear compelling.

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LORD ABBETT

Supermajority Voting

Supermajority provisions violate the principle that a simple majority of
voting shares should be all that is necessary to effect change regarding a
company and its corporate governance provisions. Requiring more than this may
permit management to entrench themselves by blocking amendments that are in the
best interest of shareholders.

TAKEOVER ISSUES

Votes on mergers and acquisitions must be considered on a case-by-case
basis. The voting decision should depend on a number of factors, including:
anticipated financial and operating benefits, the offer price, prospects of the
combined companies, changes in corporate governance and their impact on
shareholder rights. It is our policy to vote against management proposals to
require supermajority shareholder vote to approve mergers and other significant
business combinations, and to vote for shareholder proposals to lower
supermajority vote requirements for mergers and acquisitions. We are also
opposed to amendments that attempt to eliminate shareholder approval for
acquisitions involving the issuance of more than 10% of the company's voting
stock. Restructuring proposals will also be evaluated on a case-by-case basis
following the same guidelines as those used for mergers.

Among the more important issues that we support, as long as they are not
tied in with other measures that clearly entrench management, are:

1) Anti-greenmail provisions, which prohibit management from buying back
shares at above market prices from potential suitors without shareholder
approval.

2) Fair Price Amendments, to protect shareholders from inequitable two-tier
stock acquisition offers.

3) Shareholder Rights Plans (so-called "Poison Pills"), usually "blank
check" preferred and other classes of voting securities that can be issued
without further shareholder approval. However, we look at these proposals on
a case-by-case basis, and we only approve these devices when proposed by
companies with strong, effective managements to force corporate raiders to
negotiate with management and assure a degree of stability that will support
good long-range corporate goals. We vote for shareholder proposals asking
that a company submit its poison pill for shareholder ratification.

4) "Chewable Pill" provisions, are the preferred form of Shareholder Rights
Plan. These provisions allow the shareholders a secondary option when the
Board refuses to withdraw a poison pill against a majority shareholder vote.
To strike a balance of power between management and the shareholder, ideally
"Chewable Pill" provisions should embody the following attributes, allowing
sufficient flexibility to maximize shareholder wealth when employing a poison
pill in negotiations:

. Redemption Clause allowing the board to rescind a pill after a potential
acquirer has surpassed the ownership threshold.

. No dead-hand or no-hand pills.

. Sunset Provisions which allow the shareholders to review, and reaffirm
or redeem a pill after a predetermined time frame.

. Qualifying Offer Clause which gives shareholders the ability to redeem a
poison pill when faced with a bona fide takeover offer.

SOCIAL ISSUES

It is our general policy to vote as management recommends on social issues,
unless we feel that voting otherwise will enhance the value of our holdings. We
recognize that highly ethical and competent managements occasionally differ on
such matters, and so we review the more controversial issues closely.

MASSACHUSETTS FINANCIAL SERVICES COMPANY

PROXY VOTING POLICIES AND PROCEDURES

MARCH 13, 2008

Massachusetts Financial Services Company, MFS Institutional Advisors, Inc.,
MFS International (UK) Limited, MFS Heritage Trust Company, and MFS' other
investment adviser subsidiaries (except Four Pillars Capital, Inc.)
(collectively, "MFS") have adopted proxy voting policies and procedures, as set
forth below ("MFS Proxy Voting Policies and Procedures"), with respect to
securities owned by the clients for which MFS serves as investment adviser and
has the power to vote proxies, including the registered investment companies
sponsored by MFS.

A. VOTING GUIDELINES

1. GENERAL POLICY; POTENTIAL CONFLICTS OF INTEREST

MFS' policy is that proxy voting decisions are made in what MFS believes to
be the best long-term economic interests of MFS' clients, and not in the
interests of any other party or in MFS' corporate interests, including
interests such as the distribution of MFS Fund shares, administration of 401(k)
plans, and institutional relationships.

In developing these proxy voting guidelines, MFS periodically reviews
corporate governance issues and proxy voting matters that are presented for
shareholder vote by either management or shareholders of public companies.
Based on the overall principle that all votes cast by MFS on behalf of its
clients must be in what MFS believes to be the best long-term economic
interests of such clients, MFS has adopted proxy voting guidelines, set forth
below, that govern how MFS generally will vote on specific matters presented
for shareholder vote. In all cases, MFS will exercise its discretion in voting
on these matters in accordance with this overall principle. In other words, the
underlying guidelines are simply that--guidelines. Proxy items of significance
are often considered on a case-by-case basis, in light of all relevant facts
and circumstances, and in certain cases MFS may vote proxies in a manner
different from what otherwise be dictated by these guidelines.

As a general matter, MFS maintains a consistent voting position on similar
proxy proposals with respect to various issuers. In addition, MFS generally
votes consistently on the same matter when securities of an issuer are held by
multiple client accounts. However, MFS recognizes that there are gradations in
certain types of proposals that might result in different voting positions
being taken with respect to different proxy statements. There also may be
situations involving matters presented for shareholder vote that are not
governed by the guidelines or situations where MFS has received explicit voting
instructions from a client for its own account. Some items that otherwise would
be acceptable will be voted against the proponent when it is seeking extremely
broad flexibility without offering a valid explanation. MFS reserves the right
to override the guidelines with respect to a particular shareholder vote when
such an override is, in MFS' best judgment, consistent with the overall
principle of voting proxies in the best long-term economic interests of MFS'
clients.

From time to time, MFS receives comments on these guidelines as well as
regarding particular voting issues from its clients. These comments are
carefully considered by MFS when it reviews these guidelines each year and
revises them as appropriate.

These policies and procedures are intended to address any potential material
conflicts of interest on the part of MFS or its subsidiaries that are likely to
arise in connection with the voting of proxies on behalf of MFS' clients. If
such potential material conflicts of interest do arise, MFS will analyze,
document and report on such potential material conflicts of interest (see
Sections B.2 and E below), and shall ultimately vote the relevant proxies in
what MFS believes to be the best long-term economic interests of its clients.
The MFS Proxy Voting

Committee is responsible for monitoring and reporting with respect to such
potential material conflicts of interest.

B. ADMINISTRATIVE PROCEDURES

1. MFS PROXY VOTING COMMITTEE

The administration of these MFS Proxy Voting Policies and Procedures is
overseen by the MFS Proxy Voting Committee, which includes senior personnel
from the MFS Legal and Global Investment Support Departments. The Proxy Voting
Committee does not include individuals whose primary duties relate to client
relationship management, marketing, or sales. The MFS Proxy Voting Committee:

a. Reviews these MFS Proxy Voting Policies and Procedures at least
annually and recommends any amendments considered to be necessary or
advisable;

b. Determines whether any potential material conflict of interest exist
with respect to instances in which MFS (i) seeks to override these MFS Proxy
Voting Policies and Procedures; (ii) votes on ballot items not governed by
these MFS Proxy Voting Policies and Procedures; (iii) evaluates an excessive
executive compensation issue in relation to the election of directors; or
(iv) requests a vote recommendation from an MFS portfolio manager or
investment analyst (e.g. mergers and acquisitions); and

c. Considers special proxy issues as they may arise from time to time.

2. POTENTIAL CONFLICTS OF INTEREST

The MFS Proxy Voting Committee is responsible for monitoring potential
material conflicts of interest on the part of MFS or its subsidiaries that
could arise in connection with the voting of proxies on behalf of MFS' clients.
Due to the client focus of our investment management business, we believe that
the potential for actual material conflict of interest issues is small.
Nonetheless, we have developed precautions to ensure that all proxy votes are
cast in the best long-term economic interest of shareholders. Other MFS
internal policies require all MFS employees to avoid actual and potential
conflicts of interests between personal activities and MFS' client activities.
If an employee identifies an actual or potential conflict of interest with
respect to any voting decision that employee must recuse himself/herself from
participating in the voting process. Additionally, with respect to decisions
concerning all Non Standard Votes, as defined below, MFS will review the
securities holdings reported by the individuals that participate in such
decision to determine whether such person has a direct economic interest in the
decision, in which case such person shall not further participate in making the
decision. Any significant attempt by an employee of MFS or its subsidiaries to
influence MFS' voting on a particular proxy matter should also be reported to
the MFS Proxy Voting Committee.

In cases where proxies are voted in accordance with these MFS Proxy Voting
Policies and Procedures, no material conflict of interest will be deemed to
exist. In cases where (i) MFS is considering overriding these MFS Proxy Voting
Policies and Procedures, (ii) matters presented for vote are not clearly
governed by these MFS Proxy Voting Policies and Procedures, (iii) MFS evaluates
an excessive executive compensation issue in relation to the election of
directors, or (iv) a vote recommendation is requested from an MFS portfolio
manager or investment analyst (e.g. mergers and acquisitions) (collectively,
"Non Standard Votes"); the MFS Proxy Voting Committee will follow these
procedures:

a. Compare the name of the issuer of such proxy against a list of
significant current (i) distributors of MFS Fund shares, and (ii) MFS
institutional clients (the "MFS Significant Client List");

b. If the name of the issuer does not appear on the MFS Significant
Client List, then no material conflict of interest will be deemed to exist,
and the proxy will be voted as otherwise determined by the MFS Proxy Voting
Committee;

c. If the name of the issuer appears on the MFS Significant Client List,
then the MFS Proxy Voting Committee will be apprised of that fact and each
member of the MFS Proxy Voting Committee will

carefully evaluate the proposed vote in order to ensure that the proxy
ultimately is voted in what MFS believes to be the best long-term economic
interests of MFS' clients, and not in MFS' corporate interests; and

d. For all potential material conflicts of interest identified under
clause (c) above, the MFS Proxy Voting Committee will document: the name of
the issuer, the issuer's relationship to MFS, the analysis of the matters
submitted for proxy vote, the votes as to be cast and the reasons why the
MFS Proxy Voting Committee determined that the votes were cast in the best
long-term economic interests of MFS' clients, and not in MFS' corporate
interests. A copy of the foregoing documentation will be provided to MFS'
Conflicts Officer.

The members of the MFS Proxy Voting Committee are responsible for creating
and maintaining the MFS Significant Client List, in consultation with MFS'
distribution and institutional business units. The MFS Significant Client List
will be reviewed and updated periodically, as appropriate.

From time to time, certain MFS Funds may own shares of other MFS Funds (the
"underlying fund"). If an underlying fund submits a matter to a shareholder
vote, the MFS Fund that owns shares of the underlying fund will vote its shares
in the same proportion as the other shareholders of the underlying fund.

3. GATHERING PROXIES

Most proxies received by MFS and its clients originate at Automatic Data
Processing Corp. ("ADP") although a few proxies are transmitted to investors by
corporate issuers through their custodians or depositories. ADP and issuers
send proxies and related material directly to the record holders of the shares
beneficially owned by MFS' clients, usually to the client's custodian or, less
commonly, to the client itself. This material will include proxy cards,
reflecting the shareholdings of Funds and of clients on the record dates for
such shareholder meetings, as well as proxy statements with the issuer's
explanation of the items to be voted upon.

MFS, on behalf of itself and the Funds, has entered into an agreement with
an independent proxy administration firm, Institutional Shareholder Services,
Inc. (the "Proxy Administrator"), pursuant to which the Proxy Administrator
performs various proxy vote related administrative services, such as vote
processing and recordkeeping functions for MFS' Funds and institutional client
accounts. The Proxy Administrator receives proxy statements and proxy cards
directly or indirectly from various custodians, logs these materials into its
database and matches upcoming meetings with MFS Fund and client portfolio
holdings, which are input into the Proxy Administrator's system by an MFS
holdings datafeed. Through the use of the Proxy Administrator system, ballots
and proxy material summaries for all upcoming shareholders' meetings are
available on-line to certain MFS employees and the MFS Proxy Voting Committee.

4. ANALYZING PROXIES

Proxies are voted in accordance with these MFS Proxy Voting Policies and
Procedures. The Proxy Administrator at the prior direction of MFS automatically
votes all proxy matters that do not require the particular exercise of
discretion or judgment with respect to these MFS Proxy Voting Policies and
Procedures as determined by the MFS Proxy Voting Committee. With respect to
proxy matters that require the particular exercise of discretion or judgment,
MFS considers and votes on those proxy matters. MFS receives research from ISS
which it may take into account in deciding how to vote. In addition, MFS
expects to rely on ISS to identify circumstances in which a board may have
approved excessive executive compensation. Representatives of the MFS Proxy
Voting Committee review, as appropriate, votes cast to ensure conformity with
these MFS Proxy Voting Policies and Procedures.

As a general matter, portfolio managers and investment analysts have little
or no involvement in specific votes taken by MFS. This is designed to promote
consistency in the application of MFS' voting guidelines, to

promote consistency in voting on the same or similar issues (for the same or
for multiple issuers) across all client accounts, and to minimize the potential
that proxy solicitors, issuers, or third parties might attempt to exert
inappropriate influence on the vote. In limited types of votes (E.G., corporate
actions, such as mergers and acquisitions), a representative of MFS Proxy
Voting Committee may consult with or seek recommendations from MFS portfolio
managers or investment analysts./1/ However, the MFS Proxy Voting Committee
would ultimately determine the manner in which all proxies are voted.

As noted above, MFS reserves the right to override the guidelines when such
an override is, in MFS' best judgment, consistent with the overall principle of
voting proxies in the best long-term economic interests of MFS' clients. Any
such override of the guidelines shall be analyzed, documented and reported in
accordance with the procedures set forth in these policies.

5. VOTING PROXIES

In accordance with its contract with MFS, the Proxy Administrator also
generates a variety of reports for the MFS Proxy Voting Committee, and makes
available on-line various other types of information so that the MFS Proxy
Voting Committee may review and monitor the votes cast by the Proxy
Administrator on behalf of MFS' clients.

C. MONITORING SYSTEM

It is the responsibility of the Proxy Administrator and MFS' Proxy Voting
Committee to monitor the proxy voting process. When proxy materials for clients
are received, they are forwarded to the Proxy Administrator and are input into
the Proxy Administrator's system. Through an interface with the portfolio
holdings database of MFS, the Proxy Administrator matches a list of all MFS
Funds and clients who hold shares of a company's stock and the number of shares
held on the record date with the Proxy Administrator's listing of any upcoming
shareholder's meeting of that company.

When the Proxy Administrator's system "tickler" shows that the voting
cut-off date of a shareholders' meeting is approaching, a Proxy Administrator
representative checks that the vote for MFS Funds and clients holding that
security has been recorded in the computer system. If a proxy card has not been
received from the client's custodian, the Proxy Administrator calls the
custodian requesting that the materials be forwarded immediately. If it is not
possible to receive the proxy card from the custodian in time to be voted at
the meeting, MFS may instruct the custodian to cast the vote in the manner
specified and to mail the proxy directly to the issuer.

D. RECORDS RETENTION

MFS will retain copies of these MFS Proxy Voting Policies and Procedures in
effect from time to time and will retain all proxy voting reports submitted to
the Board of Trustees, Board of Directors and Board of Managers of the MFS
Funds for the period required by applicable law. Proxy solicitation materials,
including electronic versions of the proxy cards completed by representatives
of the MFS Proxy Voting Committee, together with their respective notes and
comments, are maintained in an electronic format by the Proxy Administrator and
are accessible on-line by the MFS Proxy Voting Committee. All proxy voting
materials and supporting documentation, including records generated by the
Proxy Administrator's system as to proxies processed, including the dates when
proxy ballots were received and submitted, and the votes on each company's
proxy issues, are retained as required by applicable law.

- - --------
/1/ From time to time, due to travel schedules and other commitments, an
appropriate portfolio manager or research analyst is not available to
provide a recommendation on a merger or acquisition proposal. If such a
recommendation cannot be obtained prior to the cut-off date of the
shareholder meeting, certain members of the MFS Proxy Voting Committee may
determine to abstain from voting.

E. REPORTS

ALL MFS ADVISORY CLIENTS

At any time, a report can be printed by MFS for each client who has
requested that MFS furnish a record of votes cast. The report specifies the
proxy issues which have been voted for the client during the year and the
position taken with respect to each issue.

Except as described above, MFS generally will not divulge actual voting
practices to any party other than the client or its representatives (unless
required by applicable law) because we consider that information to be
confidential and proprietary to the client.

FEBRUARY 28, 2008

MORGAN STANLEY INVESTMENT MANAGEMENT

PROXY VOTING POLICY AND PROCEDURES

I. POLICY STATEMENT

Introduction--Morgan Stanley Investment Management's ("MSIM") policy and
procedures for voting proxies ("Policy") with respect to securities held in the
accounts of clients applies to those MSIM entities that provide discretionary
investment management services and for which an MSIM entity has authority to
vote proxies. This Policy is reviewed and updated as necessary to address new
and evolving proxy voting issues and standards.

The MSIM entities covered by this Policy currently include the following:
Morgan Stanley Investment Advisors Inc., Morgan Stanley AIP GP LP, Morgan
Stanley Investment Management Inc., Morgan Stanley Investment Management
Limited, Morgan Stanley Investment Management Company, Morgan Stanley Asset &
Investment Trust Management Co., Limited, Morgan Stanley Investment Management
Private Limited, Van Kampen Asset Management, and Van Kampen Advisors Inc.
(each an "MSIM Affiliate" and collectively referred to as the "MSIM Affiliates"
or as "we" below).

Each MSIM Affiliate will use its best efforts to vote proxies as part of its
authority to manage, acquire and dispose of account assets. With respect to the
MSIM registered management investment companies (Van Kampen, Institutional and
Advisor Funds--collectively referred to herein as the "MSIM Funds"), each MSIM
Affiliate will vote proxies under this Policy pursuant to authority granted
under its applicable investment advisory agreement or, in the absence of such
authority, as authorized by the Board of Directors/Trustees of the MSIM Funds.
An MSIM Affiliate will not vote proxies if the "named fiduciary" for an ERISA
account has reserved the authority for itself, or in the case of an account not
governed by ERISA, the investment management or investment advisory agreement
does not authorize the MSIM Affiliate to vote proxies. MSIM Affiliates will
vote proxies in a prudent and diligent manner and in the best interests of
clients, including beneficiaries of and participants in a client's benefit
plan(s) for which the MSIM Affiliates manage assets, consistent with the
objective of maximizing long-term investment returns ("Client Proxy Standard").
In certain situations, a client or its fiduciary may provide an MSIM Affiliate
with a proxy voting policy. In these situations, the MSIM Affiliate will comply
with the client's policy.

Proxy Research Services--RiskMetrics Group ISS Governance Services ("ISS")
and Glass Lewis (together with other proxy research providers as we may retain
from time to time, the "Research Providers") are independent advisers that
specialize in providing a variety of fiduciary-level proxy-related services to
institutional investment managers, plan sponsors, custodians, consultants, and
other institutional investors. The services provided include in-depth research,
global issuer analysis, and voting recommendations. While we may review and
utilize the recommendations of the Research Providers in making proxy voting
decisions, we are in no way obligated to follow such recommendations. In
addition to research, ISS provides vote execution, reporting, and recordkeeping.

Voting Proxies for Certain Non-U.S. Companies--Voting proxies of companies
located in some jurisdictions, particularly emerging markets, may involve
several problems that can restrict or prevent the ability to vote such proxies
or entail significant costs. These problems include, but are not limited to:
(i) proxy statements and ballots being written in a language other than
English; (ii) untimely and/or inadequate notice of shareholder meetings;
(iii) restrictions on the ability of holders outside the issuer's jurisdiction
of organization to exercise votes; (iv) requirements to vote proxies in person;
(v) the imposition of restrictions on the sale of the securities for a period
of time in proximity to the shareholder meeting; and (vi) requirements to
provide local agents with power of attorney to facilitate our voting
instructions. As a result, we vote clients' non-U.S. proxies on a best efforts
basis only, after weighing the costs and benefits of voting such proxies,
consistent with the Client Proxy Standard. ISS has been retained to provide
assistance in connection with voting non-U.S. proxies.

II. GENERAL PROXY VOTING GUIDELINES

To promote consistency in voting proxies on behalf of its clients, we follow
this Policy (subject to any exception set forth herein), including the
guidelines set forth below. These guidelines address a broad range of issues,
and provide general voting parameters on proposals that arise most frequently.
However, details of specific proposals vary, and those details affect
particular voting decisions, as do factors specific to a given company.
Pursuant to the procedures set forth herein, we may vote in a manner that is
not in accordance with the following general guidelines, provided the vote is
approved by the Proxy Review Committee (see Section III for description) and is
consistent with the Client Proxy Standard. Morgan Stanley AIP GP LP will follow
the procedures as described in Appendix A.

We endeavor to integrate governance and proxy voting policy with investment
goals and to follow the Client Proxy Standard for each client. At times, this
may result in split votes, for example when different clients have varying
economic interests in the outcome of a particular voting matter (such as a case
in which varied ownership interests in two companies involved in a merger
result in different stakes in the outcome). We also may split votes at times
based on differing views of portfolio managers, but such a split vote must be
approved by the Proxy Review Committee.

We may abstain on matters for which disclosure is inadequate.

A. ROUTINE MATTERS. We generally support routine management proposals. The
following are examples of routine management proposals:

. Approval of financial statements and auditor reports.

. General updating/corrective amendments to the charter, articles of
association or bylaws.

. Most proposals related to the conduct of the annual meeting, with the
following exceptions. We generally oppose proposals that relate to "the
transaction of such other business which may come before the meeting,"
and open-ended requests for adjournment. However, where management
specifically states the reason for requesting an adjournment and the
requested adjournment would facilitate passage of a proposal that would
otherwise be supported under this Policy (i.e. an uncontested corporate
transaction), the adjournment request will be supported.

We generally support shareholder proposals advocating confidential voting
procedures and independent tabulation of voting results.

B. BOARD OF DIRECTORS

1. Election of directors: In the absence of a proxy contest, we generally
support the board's nominees for director except as follows:

a. We consider withholding support from or voting against interested
directors if the company's board does not meet market standards for
director independence, or if otherwise we believe board independence is
insufficient. We refer to prevalent market standards as promulgated by a
stock exchange or other authority within a given market (e.g., New York
Stock Exchange or Nasdaq rules for most U.S. companies, and The Combined
Code on Corporate Governance in the United Kingdom). Thus, for an NYSE
company with no controlling shareholder, we would expect that at a
minimum a majority of directors should be independent as defined by
NYSE. Where we view market standards as inadequate, we may withhold
votes based on stronger independence standards. Market standards
notwithstanding, we generally do not view long board tenure alone as a
basis to classify a director as non-independent, although lack of board
turnover and fresh perspective can be a negative factor in voting on
directors.

i. At a company with a shareholder or group that controls the
company by virtue of a majority economic interest in the company, we
have a reduced expectation for board

independence, although we believe the presence of independent
directors can be helpful, particularly in staffing the audit
committee, and at times we may withhold support from or vote against
a nominee on the view the board or its committees are not
sufficiently independent.

ii. We consider withholding support from or voting against a
nominee if he or she is affiliated with a major shareholder that has
representation on a board disproportionate to its economic interest.

b. Depending on market standards, we consider withholding support
from or voting against a nominee who is interested and who is standing
for election as a member of the company's compensation, nominating or
audit committee.

c. We consider withholding support from or voting against a nominee
if we believe a direct conflict exists between the interests of the
nominee and the public shareholders, including failure to meet fiduciary
standards of care and/or loyalty. We may oppose directors where we
conclude that actions of directors are unlawful, unethical or negligent.
We consider opposing individual board members or an entire slate if we
believe the board is entrenched and/or dealing inadequately with
performance problems, and/or acting with insufficient independence
between the board and management.

d. We consider withholding support from or voting against a nominee
standing for election if the board has not taken action to implement
generally accepted governance practices for which there is a "bright
line" test. For example, in the context of the U.S. market, failure to
eliminate a dead hand or slow hand poison pills would be seen as a basis
for opposing one or more incumbent nominees.

e. In markets that encourage designated audit committee financial
experts, we consider voting against members of an audit committee if no
members are designated as such.

f. We consider withholding support from or voting against a nominee
who has failed to attend at least 75% of board meetings within a given
year without a reasonable excuse.

g. We consider withholding support from or voting against a nominee
who serves on the board of directors of more than six companies
(excluding investment companies). We also consider voting against a
director who otherwise appears to have too many commitments to serve
adequately on the board of the company.

2. Board independence: We generally support U.S. shareholder proposals
requiring that a certain percentage (up to 66 2/3%) of the company's board
members be independent directors, and promoting all-independent audit,
compensation and nominating/governance committees.

3. Board diversity: We consider on a case-by-case basis shareholder
proposals urging diversity of board membership with respect to social,
religious or ethnic group.

4. Majority voting: We generally support proposals requesting or
requiring majority voting policies in election of directors, so long as
there is a carve-out for plurality voting in the case of contested elections.

5. Proxy access: We consider on a case-by-case basis shareholder
proposals to provide procedures for inclusion of shareholder nominees in
company proxy statements.

6. Proposals to elect all directors annually: We generally support
proposals to elect all directors annually at public companies (to
"declassify" the Board of Directors) where such action is supported by the
board, and otherwise consider the issue on a case-by-case basis based in
part on overall takeover defenses at a company.

7. Cumulative voting: We generally support proposals to eliminate
cumulative voting in the U.S. market context. (Cumulative voting provides
that shareholders may concentrate their votes for one or a handful of
candidates, a system that can enable a minority bloc to place representation
on a board). U.S. proposals to establish cumulative voting in the election
of directors generally will not be supported.

8. Separation of Chairman and CEO positions: We vote on shareholder
proposals to separate the Chairman and CEO positions and/or to appoint a
non-executive Chairman based in part on prevailing practice in particular
markets, since the context for such a practice varies. In many non-U.S.
markets, we view separation of the roles as a market standard practice, and
support division of the roles in that context.

9. Director retirement age and term limits: Proposals recommending set
director retirement ages or director term limits are voted on a case-by-case
basis.

10. Proposals to limit directors' liability and/or broaden
indemnification of directors. Generally, we will support such proposals
provided that the officers and directors are eligible for indemnification
and liability protection if they have acted in good faith on company
business and were found innocent of any civil or criminal charges for duties
performed on behalf of the company.

C. CORPORATE TRANSACTIONS AND PROXY FIGHTS. We examine proposals relating to
mergers, acquisitions and other special corporate transactions (i.e.,
takeovers, spin-offs, sales of assets, reorganizations, restructurings and
recapitalizations) on a case-by-case basis. However, proposals for mergers or
other significant transactions that are friendly and approved by the Research
Providers generally will be supported and in those instances will not need to
be reviewed by the Proxy Review Committee, where there is no portfolio manager
objection and where there is no material conflict of interest. We also analyze
proxy contests on a case-by-case basis.

D. CHANGES IN CAPITAL STRUCTURE.

1. We generally support the following:

. Management and shareholder proposals aimed at eliminating unequal
voting rights, assuming fair economic treatment of classes of shares
we hold.

. Management proposals to increase the authorization of existing
classes of common stock (or securities convertible into common stock)
if: (i) a clear business purpose is stated that we can support and
the number of shares requested is reasonable in relation to the
purpose for which authorization is requested; and/or (ii) the
authorization does not exceed 100% of shares currently authorized and
at least 30% of the total new authorization will be outstanding.

. Management proposals to create a new class of preferred stock or for
issuances of preferred stock up to 50% of issued capital, unless we
have concerns about use of the authority for anti-takeover purposes.

. Management proposals to authorize share repurchase plans, except in
some cases in which we believe there are insufficient protections
against use of an authorization for anti-takeover purposes.

. Management proposals to reduce the number of authorized shares of
common or preferred stock, or to eliminate classes of preferred stock.

. Management proposals to effect stock splits.

. Management proposals to effect reverse stock splits if management
proportionately reduces the authorized share amount set forth in the
corporate charter. Reverse stock splits that do not adjust
proportionately to the authorized share amount generally will be
approved if the resulting increase in authorized shares coincides
with the proxy guidelines set forth above for common stock increases.

. Management proposals for higher dividend payouts.

2. We generally oppose the following (notwithstanding management support):

. Proposals to add classes of stock that would substantially dilute the
voting interests of existing shareholders.

. Proposals to increase the authorized or issued number of shares of
existing classes of stock that are unreasonably dilutive,
particularly if there are no preemptive rights for existing
shareholders.

. Proposals that authorize share issuance at a discount to market
rates, except where authority for such issuance is de minimis, or if
there is a special situation that we believe justifies such
authorization (as may be the case, for example, at a company under
severe stress and risk of bankruptcy).

. Proposals relating to changes in capitalization by 100% or more.

We consider on a case-by-case basis shareholder proposals to increase
dividend payout ratios, in light of market practice and perceived market
weaknesses, as well as individual company payout history and current
circumstances. For example, currently we perceive low payouts to shareholders
as a concern at some Japanese companies, but may deem a low payout ratio as
appropriate for a growth company making good use of its cash, notwithstanding
the broader market concern.

E. TAKEOVER DEFENSES AND SHAREHOLDER RIGHTS

1. Shareholder rights plans: We generally support proposals to require
shareholder approval or ratification of shareholder rights plans (poison
pills). In voting on rights plans or similar takeover defenses, we consider
on a case-by-case basis whether the company has demonstrated a need for the
defense in the context of promoting long-term share value; whether
provisions of the defense are in line with generally accepted governance
principles; and the specific context if the proposal is made in the midst of
a takeover bid or contest for control.

2. Supermajority voting requirements: We generally oppose requirements
for supermajority votes to amend the charter or bylaws, unless the
provisions protect minority shareholders where there is a large shareholder.
In line with this view, in the absence of a large shareholder we support
reasonable shareholder proposals to limit such supermajority voting
requirements.

3. Shareholder rights to call meetings: We consider proposals to enhance
shareholder rights to call meetings on a case-by-case basis.

4. Reincorporation: We consider management and shareholder proposals to
reincorporate to a different jurisdiction on a case-by-case basis. We oppose
such proposals if we believe the main purpose is to take advantage of laws
or judicial precedents that reduce shareholder rights.

5. Anti-greenmail provisions: Proposals relating to the adoption of
anti-greenmail provisions will be supported, provided that the proposal:
(i) defines greenmail; (ii) prohibits buyback offers to large block holders
(holders of at least 1% of the outstanding shares and in certain cases, a
greater amount, as determined by the Proxy Review Committee) not made to all
shareholders or not approved by disinterested shareholders; and
(iii) contains no anti-takeover measures or other provisions restricting the
rights of shareholders.

6. Bundled proposals: We may consider opposing or abstaining on proposals
if disparate issues are "bundled" and presented for a single vote.

F. AUDITORS. We generally support management proposals for selection or
ratification of independent auditors. However, we may consider opposing such
proposals with reference to incumbent audit firms if the company has suffered
from serious accounting irregularities and we believe rotation of the audit
firm is appropriate, or if fees paid to the auditor for non-audit-related
services are excessive. Generally, to determine if non-audit fees are
excessive, a 50% test will be applied (i.e., non-audit-related fees should be
less than 50% of the total fees paid to the auditor). We generally vote against
proposals to indemnify auditors.

G. EXECUTIVE AND DIRECTOR REMUNERATION.

1. We generally support the following proposals:

. Proposals for employee equity compensation plans and other employee
ownership plans, provided that our research does not indicate that
approval of the plan would be against shareholder interest. Such
approval may be against shareholder interest if it authorizes
excessive dilution and shareholder cost, particularly in the context
of high usage ("run rate") of equity compensation in the recent past;
or if there are objectionable plan design and provisions.

. Proposals relating to fees to outside directors, provided the amounts
are not excessive relative to other companies in the country or
industry, and provided that the structure is appropriate within the
market context. While stock-based compensation to outside directors
is positive if moderate and appropriately structured, we are wary of
significant stock option awards or other performance-based awards for
outside directors, as well as provisions that could result in
significant forfeiture of value on a director's decision to resign
from a board (such forfeiture can undercut director independence).

. Proposals for employee stock purchase plans that permit discounts up
to 15%, but only for grants that are part of a broad-based employee
plan, including all non-executive employees.

. Proposals for the establishment of employee retirement and severance
plans, provided that our research does not indicate that approval of
the plan would be against shareholder interest.

2. Shareholder proposals requiring shareholder approval of all severance
agreements will not be supported, but proposals that require shareholder
approval for agreements in excess of three times the annual compensation
(salary and bonus) generally will be supported. We generally oppose
shareholder proposals that would establish arbitrary caps on pay. We
consider on a case-by-case basis shareholder proposals that seek to limit
Supplemental Executive Retirement Plans (SERPs), but support such proposals
where we consider SERPs to be excessive.

3. Shareholder proposals advocating stronger and/or particular
pay-for-performance models will be evaluated on a case-by-case basis, with
consideration of the merits of the individual proposal within the context of
the particular company and its labor markets, and the company's current and
past practices. While we generally support emphasis on long-term components
of senior executive pay and strong linkage of pay to performance, we
consider whether a proposal may be overly prescriptive, and the impact of
the proposal, if implemented as written, on recruitment and retention.

4. We consider shareholder proposals for U.K.-style advisory votes on pay
on a case-by-case basis.

5. We generally support proposals advocating reasonable senior executive
and director stock ownership guidelines and holding requirements for shares
gained in option exercises.

6. Management proposals effectively to re-price stock options are
considered on a case-by-case basis. Considerations include the company's
reasons and justifications for a re-pricing, the company's competitive
position, whether senior executives and outside directors are excluded,
potential cost to shareholders, whether the re-pricing or share exchange is
on a value-for-value basis, and whether vesting requirements are extended.

H. SOCIAL, POLITICAL AND ENVIRONMENTAL ISSUES. We consider proposals
relating to social, political and environmental issues on a case-by-case basis
to determine whether they will have a financial impact on shareholder value.
However, we generally vote against proposals requesting reports that are
duplicative, related to matters not material to the business, or that would
impose unnecessary or excessive costs. We may abstain from voting on proposals
that do not have a readily determinable financial impact on shareholder value.
We generally oppose proposals requiring adherence to workplace standards that
are not required or customary in market(s) to which the proposals relate.

I. FUND OF FUNDS. Certain Funds advised by an MSIM Affiliate invest only in
other MSIM Funds. If an underlying fund has a shareholder meeting, in order to
avoid any potential conflict of interest, such proposals will be voted in the
same proportion as the votes of the other shareholders of the underlying fund,
unless otherwise determined by the Proxy Review Committee.

III. ADMINISTRATION OF POLICY

The MSIM Proxy Review Committee (the "Committee") has overall responsibility
for creating and implementing the Policy, working with an MSIM staff group (the
"Corporate Governance Team"). The Committee, which is appointed by MSIM's Chief
Investment Officer of Global Equities ("CIO"), consists of senior investment
professionals who represent the different investment disciplines and geographic
locations of the firm. Because proxy voting is an investment responsibility and
impacts shareholder value, and because of their knowledge of companies and
markets, portfolio managers and other members of investment staff play a key
role in proxy voting, although the Committee has final authority over proxy
votes.

The Committee Chairperson is the head of the Corporate Governance Team, and
is responsible for identifying issues that require Committee deliberation or
ratification. The Corporate Governance Team, working with advice of investment
teams and the Committee, is responsible for voting on routine items and on
matters that can be addressed in line with these Policy guidelines. The
Corporate Governance Team has responsibility for voting case-by-case where
guidelines and precedent provide adequate guidance, and to refer other
case-by-case decisions to the Proxy Review Committee.

The Committee will periodically review and have the authority to amend, as
necessary, the Policy and establish and direct voting positions consistent with
the Client Proxy Standard.

A. COMMITTEE PROCEDURES

The Committee will meet at least monthly to (among other matters) address
any outstanding issues relating to the Policy or its implementation. The
Corporate Governance Team will timely communicate to ISS MSIM's Policy (and any
amendments and/or any additional guidelines or procedures the Committee may
adopt).

The Committee will meet on an ad hoc basis to (among other matters):
(1) authorize "split voting" (i.e., allowing certain shares of the same issuer
that are the subject of the same proxy solicitation and held by one or more
MSIM portfolios to be voted differently than other shares) and/or "override
voting" (i.e., voting all MSIM portfolio shares in a manner contrary to the
Policy); (2) review and approve upcoming votes, as appropriate, for matters for
which specific direction has been provided in this Policy; and (3) determine
how to vote matters for which specific direction has not been provided in this
Policy.

Members of the Committee may take into account Research Providers'
recommendations and research as well as any other relevant information they may
request or receive, including portfolio manager and/or analyst research, as
applicable. Generally, proxies related to securities held in accounts that are
managed pursuant to quantitative, index or index-like strategies ("Index
Strategies") will be voted in the same manner as those held in actively managed
accounts, unless economic interests of the accounts differ. Because accounts
managed using Index Strategies are passively managed accounts, research from
portfolio managers and/or analysts related to securities held in these accounts
may not be available. If the affected securities are held only in accounts that
are managed pursuant to Index Strategies, and the proxy relates to a matter
that is not described in this Policy, the Committee will consider all available
information from the Research Providers, and to the extent that the holdings
are significant, from the portfolio managers and/or analysts.

B. MATERIAL CONFLICTS OF INTEREST

In addition to the procedures discussed above, if the Committee determines
that an issue raises a material conflict of interest, the Committee will
request a special committee to review, and recommend a course of action with
respect to, the conflict(s) in question ("Special Committee").

The Special Committee shall be comprised of the Chairperson of the Proxy
Review Committee, the Chief Compliance Officer or his/her designee, a senior
portfolio manager (if practicable, one who is a member of the Proxy Review
Committee) designated by the Proxy Review Committee, and MSIM's relevant Chief
Investment Officer or his/her designee, and any other persons deemed necessary
by the Chairperson. The Special Committee may request the assistance of MSIM's
General Counsel or his/her designee who will have sole discretion to cast a
vote. In addition to the research provided by Research Providers, the Special
Committee may request analysis from MSIM Affiliate investment professionals and
outside sources to the extent it deems appropriate.

C. IDENTIFICATION OF MATERIAL CONFLICTS OF INTEREST

A potential material conflict of interest could exist in the following
situations, among others:

1. The issuer soliciting the vote is a client of MSIM or an affiliate of
MSIM and the vote is on a material matter affecting the issuer.

2. The proxy relates to Morgan Stanley common stock or any other security
issued by Morgan Stanley or its affiliates except if echo voting is used, as
with MSIM Funds, as described herein.

3. Morgan Stanley has a material pecuniary interest in the matter
submitted for a vote (e.g., acting as a financial advisor to a party to a
merger or acquisition for which Morgan Stanley will be paid a success fee if
completed).

If the Chairperson of the Committee determines that an issue raises a
potential material conflict of interest, depending on the facts and
circumstances, the Chairperson will address the issue as follows:

1. If the matter relates to a topic that is discussed in this Policy, the
proposal will be voted as per the Policy.

2. If the matter is not discussed in this Policy or the Policy indicates
that the issue is to be decided case-by-case, the proposal will be voted in
a manner consistent with the Research Providers, provided that all the
Research Providers have the same recommendation, no portfolio manager
objects to that vote, and the vote is consistent with MSIM's Client Proxy
Standard.

3. If the Research Providers' recommendations differ, the Chairperson
will refer the matter to the Committee to vote on the proposal. If the
Committee determines that an issue raises a material conflict of interest,
the Committee will request a Special Committee to review and recommend a
course of action, as described above. Notwithstanding the above, the
Chairperson of the Committee may request a Special Committee to review a
matter at any time as he/she deems necessary to resolve a conflict.

D. PROXY VOTING REPORTING

The Committee and the Special Committee, or their designee(s), will document
in writing all of their decisions and actions, which documentation will be
maintained by the Committee and the Special Committee, or their designee(s),
for a period of at least 6 years. To the extent these decisions relate to a
security held by an MSIM Fund, the Committee and Special Committee, or their
designee(s), will report their decisions to each applicable Board of
Trustees/Directors of those Funds at each Board's next regularly scheduled
Board meeting. The report will contain information concerning decisions made by
the Committee and Special Committee during the most recently ended calendar
quarter immediately preceding the Board meeting.

The Corporate Governance Team will timely communicate to applicable
portfolio managers and to ISS, decisions of the Committee and Special Committee
so that, among other things, ISS will vote proxies consistent with their
decisions.

MSIM will promptly provide a copy of this Policy to any client requesting
it. MSIM will also, upon client request, promptly provide a report indicating
how each proxy was voted with respect to securities held in that client's
account.

MSIM's Legal Department is responsible for filing an annual Form N-PX on
behalf of each MSIM Fund for which such filing is required, indicating how all
proxies were voted with respect to such Fund's holdings.

APPENDIX A

The following procedures apply to accounts managed by Morgan Stanley AIP GP
LP ("AIP").

Generally, AIP will follow the guidelines set forth in Section II of MSIM's
Proxy Voting Policy and Procedures. To the extent that such guidelines do not
provide specific direction, or AIP determines that consistent with the Client
Proxy Standard, the guidelines should not be followed, the Proxy Review
Committee has delegated the voting authority to vote securities held by
accounts managed by AIP to the Liquid Markets investment team and the Private
Markets investment team of AIP. A summary of decisions made by the investment
teams will be made available to the Proxy Review Committee for its information
at the next scheduled meeting of the Proxy Review Committee.

In certain cases, AIP may determine to abstain from determining (or
recommending) how a proxy should be voted (and therefore abstain from voting
such proxy or recommending how such proxy should be voted), such as where the
expected cost of giving due consideration to the proxy does not justify the
potential benefits to the affected account(s) that might result from adopting
or rejecting (as the case may be) the measure in question.

Waiver of Voting Rights

For regulatory reasons, AIP may either 1) invest in a class of securities of
an underlying fund (the "Fund") that does not provide for voting rights; or 2)
waive 100% of its voting rights with respect to the following:

1. Any rights with respect to the removal or replacement of a director,
general partner, managing member or other person acting in a similar
capacity for or on behalf of the Fund (each individually a "Designated
Person," and collectively, the "Designated Persons"), which may include, but
are not limited to, voting on the election or removal of a Designated Person
in the event of such Designated Person's death, disability, insolvency,
bankruptcy, incapacity, or other event requiring a vote of interest holders
of the Fund to remove or replace a Designated Person; and

2. Any rights in connection with a determination to renew, dissolve,
liquidate, or otherwise terminate or continue the Fund, which may include,
but are not limited to, voting on the renewal, dissolution, liquidation,
termination or continuance of the Fund upon the occurrence of an event
described in the Fund's organizational documents; provided, however, that,
if the Fund's organizational documents require the consent of the Fund's
general partner or manager, as the case may be, for any such termination or
continuation of the Fund to be effective, then AIP may exercise its voting
rights with respect to such matter.

APPENDIX B

The following procedures apply to the portion of the Van Kampen Dynamic
Credit Opportunities Fund ("VK Fund") sub advised by Avenue Europe
International Management, L.P. ("Avenue"). (The portion of the VK Fund managed
solely by Van Kampen Asset Management will continue to be subject to MSIM's
Policy.)

1. Generally: With respect to Avenue's portion of the VK Fund, the Board
of Trustees of the VK Fund will retain sole authority and responsibility for
proxy voting. The Adviser's involvement in the voting process of Avenue's
portion of the VK Fund is a purely administrative function, and serves to
execute and deliver the proxy voting decisions made by the VK Fund Board in
connection with the Avenue portion of the VK Fund, which may, from time to
time, include related administrative tasks such as receiving proxies,
following up on missing proxies, and collecting data related to proxies. As
such, the Adviser shall not be deemed to have voting power or shared voting
power with Avenue with respect to Avenue's portion of the Fund.

2. Voting Guidelines: All proxies, with respect to Avenue's portion of
the VK Fund, will be considered by the VK Fund Board or such subcommittee as
the VK Fund Board may designate from time to time for determination and
voting approval. The VK Board or its subcommittee will timely communicate to
MSIM's Corporate Governance Group its proxy voting decisions, so that among
other things the votes will be effected consistent with the VK Board's
authority.

3. Administration: The VK Board or its subcommittee will meet on an adhoc
basis as may be required from time to time to review proxies that require
its review and determination. The VK Board or its subcommittee will document
in writing all of its decisions and actions which will be maintained by the
VK Fund, or its designee(s), for a period of at least 6 years. If a
subcommittee is designated, a summary of decisions made by such subcommittee
will be made available to the full VK Board for its information at its next
scheduled respective meetings.

OPPENHEIMERFUNDS, INC.
OPPENHEIMERFUNDS
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES
(AS OF DECEMBER 5, 2005) AND
PROXY VOTING GUIDELINES (AS OF AUGUST 30, 2007)

These Portfolio Proxy Voting Policies and Procedures, which include the
attached "OppenheimerFunds Proxy Voting Guidelines" (the "Guidelines"), set
forth the proxy voting policies, procedures and guidelines to be followed by
OppenheimerFunds, Inc. ("OFI") in voting portfolio proxies relating to
securities held by clients, including registered investment companies advised
or sub-advised by OFI ("Fund(s)").

A. FUNDS FOR WHICH OFI HAS PROXY VOTING RESPONSIBILITY

OFI Funds. Each Board of Directors/Trustees of the Funds advised by OFI (the
"OFI Fund Board(s)") has delegated to OFI the authority to vote portfolio
proxies pursuant to these Policies and Procedures and subject to Board
supervision.

Sub-Advised Funds. OFI also serves as an investment sub-adviser for a number
of other non-OFI funds not overseen by the OFI Fund Boards ("Sub-Advised
Funds"). Pursuant to contractual arrangements between OFI and many of those
Sub-Advised Funds' managers, OFI is responsible for portfolio proxy voting of
the portfolio proxies held by those Sub-Advised Funds.

Tremont Funds (Funds-of-Hedge Funds). Certain OFI Funds are structured as
funds-of-hedge funds (the "Tremont Funds") and invest their assets primarily in
underlying private investment partnerships and similar investment vehicles
("portfolio funds"). These Tremont Funds have delegated voting of portfolio
proxies (if any) for their portfolio holdings to OFI. OFI, in turn, has
delegated the proxy voting responsibility to Tremont Partners, Inc., the
investment manager of the Tremont Funds.

The underlying portfolio funds, however, typically do not solicit votes from
their interest holders (such as the Tremont Funds). Therefore, the Tremont
Funds' interests (or shares) in those underlying portfolio funds are not
considered to be "voting securities" and generally would not be subject to
these Policies and Procedures. However, in the unlikely event that an
underlying portfolio fund does solicit the vote or consent of its interest
holders, the Tremont Funds and Tremont Partners, Inc. have adopted these
Policies and Procedures and will vote in accordance with these Policies and
Procedures.

B. PROXY VOTING COMMITTEE

OFI's internal proxy voting committee (the "Committee") is responsible for
overseeing the proxy voting process and ensuring that OFI and the Funds meet
their regulatory and corporate governance obligations for voting of portfolio
proxies.

The Committee shall adopt a written charter that outlines its
responsibilities and any amendments to the charter shall be provided to the
Boards at the Boards' next regularly scheduled meetings.

The Committee also shall receive and review periodic reports prepared by the
proxy voting agent regarding portfolio proxies and related votes cast. The
Committee shall oversee the proxy voting agent's compliance with these Policies
and Procedures and the Guidelines, including any deviations by the proxy voting
agent from the Guidelines.

The Committee will meet on a regular basis and may act at the direction of
two or more of its voting members provided one of those members is the Legal
Department or Compliance Department representative. The Committee will maintain
minutes of Committee meetings and provide regular reports to the OFI Fund
Boards.

C. ADMINISTRATION AND VOTING OF PORTFOLIO PROXIES

1. FIDUCIARY DUTY AND OBJECTIVE

As an investment adviser that has been granted the authority to vote
portfolio proxies, OFI owes a fiduciary duty to the Funds to monitor corporate
events and to vote portfolio proxies consistent with the best interests of the
Funds and their shareholders. In this regard, OFI seeks to ensure that all
votes are free from unwarranted and inappropriate influences. Accordingly, OFI
generally votes portfolio proxies in a uniform manner for the Funds and in
accordance with these Policies and Procedures and the Guidelines.

In meeting its fiduciary duty, OFI generally undertakes to vote portfolio
proxies with a view to enhancing the value of the company's stock held by the
Funds. Similarly, when voting on matters for which the Guidelines dictate a
vote be decided on a case-by-case basis, OFI's primary consideration is the
economic interests of the Funds and their shareholders.

2. PROXY VOTING AGENT

On behalf of the Funds, OFI retains an independent, third party proxy voting
agent to assist OFI in its proxy voting responsibilities in accordance with
these Policies and Procedures and, in particular, with the Guidelines. As
discussed above, the Committee is responsible for monitoring the proxy voting
agent.

In general, OFI may consider the proxy voting agent's research and analysis
as part of OFI's own review of a proxy proposal in which the Guidelines
recommend that the vote be considered on a case-by-case basis. OFI bears
ultimate responsibility for how portfolio proxies are voted. Unless instructed
otherwise by OFI, the proxy voting agent will vote each portfolio proxy in
accordance with the Guidelines. The proxy voting agent also will assist OFI in
maintaining records of OFI's and the Funds' portfolio proxy votes, including
the appropriate records necessary for the Funds' to meet their regulatory
obligations regarding the annual filing of proxy voting records on Form N-PX
with the SEC.

3. MATERIAL CONFLICTS OF INTEREST

OFI votes portfolio proxies without regard to any other business
relationship between OFI (or its affiliates) and the company to which the
portfolio proxy relates. To this end, OFI must identify material conflicts of
interest that may arise between the interests of a Fund and its shareholders
and OFI, its affiliates or their business relationships. A material conflict of
interest may arise from a business relationship between a portfolio company or
its affiliates (together the "company"), on one hand, and OFI or any of its
affiliates (together "OFI"), on the other, including, but not limited to, the
following relationships:

. OFI provides significant investment advisory or other services to a
company whose management is soliciting proxies or OFI is seeking to
provide such services;

. an officer of OFI serves on the board of a charitable organization that
receives charitable contributions from the company and the charitable
organization is a client of OFI;

. a company that is a significant selling agent of OFI's products and
services solicits proxies;

. OFI serves as an investment adviser to the pension or other investment
account of the portfolio company or OFI is seeking to serve in that
capacity; or

. OFI and the company have a lending or other financial-related
relationship.

In each of these situations, voting against company management's
recommendation may cause OFI a loss of revenue or other benefit.

actual actions regarding portfolio proxy voting decisions. This arrangement
alone, however, is insufficient to assure that material conflicts of interest
do not influence OFI's voting of portfolio proxies. To minimize this
possibility, OFI and the Committee employ the following procedures:

. If the proposal that gives rise to a material conflict is specifically
addressed in the Guidelines, OFI will vote the portfolio proxy in
accordance with the Guidelines, provided that the Guidelines do not
provide discretion to OFI on how to vote on the matter (I.E.,
case-by-case);

. If the proposal that gives rise to a potential conflict is not
specifically addressed in the Guidelines or provides discretion to OFI
on how to vote, OFI will vote in accordance with its proxy voting
agent's general recommended guidelines on the proposal provided that OFI
has reasonably determined there is no conflict of interest on the part
of the proxy voting agent;

. If neither of the previous two procedures provides an appropriate voting
recommendation, OFI may retain an independent fiduciary to advise OFI on
how to vote the proposal; or the Committee may determine that voting on
the particular proposal is impracticable and/or is outweighed by the
cost of voting and direct OFI to abstain from voting.

4. CERTAIN FOREIGN SECURITIES

Portfolio proxies relating to foreign securities held by the Funds are
subject to these Policies and Procedures. In certain foreign jurisdictions,
however, the voting of portfolio proxies can result in additional restrictions
that have an economic impact or cost to the security, such as "share-blocking."
Share-blocking would prevent OFI from selling the shares of the foreign
security for a period of time if OFI votes the portfolio proxy relating to the
foreign security. In determining whether to vote portfolio proxies subject to
such restrictions, OFI, in consultation with the Committee, considers whether
the vote, either itself or together with the votes of other shareholders, is
expected to have an effect on the value of the investment that will outweigh
the cost of voting. Accordingly, OFI may determine not to vote such securities.
If OFI determines to vote a portfolio proxy and during the "share-blocking
period" OFI would like to sell an affected foreign security for one or more
Funds, OFI, in consultation with the Committee, will attempt to recall the
shares (as allowable within the market time-frame and practices).

5. SECURITIES LENDING PROGRAMS

The Funds may participate in securities lending programs with various
counterparties. Under most securities lending arrangements, proxy voting rights
during the lending period generally are transferred to the borrower, and thus
proxies received in connection with the securities on loan may not be voted by
the lender (I.E., the Fund) unless the loan is recalled. Alternatively, some
securities lending programs use contractual arrangements among the lender,
borrower and counterparty to arrange for the borrower to vote the proxies in
accordance with instructions from the lending Fund.

If a Fund participates in a securities lending program, OFI will attempt to
recall the recall the Funds' portfolio securities on loan and vote proxies
relating to such securities if OFI determines that the votes involve matters
that would have a material effect on the Fund's investment in such loaned
securities.

6. SHARES OF REGISTERED INVESTMENT COMPANIES (FUND OF FUNDS)

Certain OFI Funds are structured as funds of funds and invest their assets
primarily in other underlying OFI Funds (the "Fund of Funds"). Accordingly, the
Fund of Fund is a shareholder in the underlying OFI Funds and may be requested
to vote on a matter pertaining to those underlying OFI Funds. With respect to
any such matter, the Fund of Funds will vote its shares in the underlying OFI
Fund in the same proportion as the vote of all other shareholders in that
underlying OFI Fund (sometimes called "mirror" or "echo" voting).

D. FUND BOARD REPORTS AND RECORDKEEPING

OFI will prepare periodic reports for submission to the Board describing:

. any issues arising under these Policies and Procedures since the last
report to the Board and the resolution of such issues, including but not
limited to, information about conflicts of interest not addressed in the
Policies and Procedures; and

. any proxy votes taken by OFI on behalf of the Funds since the last
report to the Board which were deviations from the Policies and
Procedures and the reasons for any such deviations.

In addition, no less frequently than annually, OFI will provide the Boards a
written report identifying any recommended changes in existing policies based
upon OFI's experience under these Policies and Procedures, evolving industry
practices and developments in applicable laws or regulations.

OFI will maintain all records required to be maintained under, and in
accordance with, the Investment Company Act of 1940 and the Investment Advisers
Act of 1940 with respect to OFI's voting of portfolio proxies, including, but
not limited to:

. these Policies and Procedures, as amended from time to time;

. Records of votes cast with respect to portfolio proxies, reflecting the
information required to be included in Form N-PX;

. Records of written client requests for proxy voting information and any
written responses of OFI to such requests; and

. Any written materials prepared by OFI that were material to making a
decision in how to vote, or that memorialized the basis for the decision.

E. AMENDMENTS TO THESE PROCEDURES

In addition to the Committee's responsibilities as set forth in the
Committee's Charter, the Committee shall periodically review and update these
Policies and Procedures as necessary. Any amendments to these Procedures and
Policies (including the Guidelines) shall be provided to the Boards for review,
approval and ratification at the Boards' next regularly scheduled meetings.

F. PROXY VOTING GUIDELINES

The Guidelines adopted by the Boards of the Funds are attached as Appendix
A. The importance of various issues shifts as political, economic and corporate
governance issues come to the forefront and then recede. Accordingly, the
Guidelines address the issues OFI has most frequently encountered in the past
several years.

APPENDIX A

OPPENHEIMERFUNDS, INC. AND OPPENHEIMER FUNDS

PORTFOLIO PROXY VOTING GUIDELINES

(AS OF AUGUST 30, 2007)

1. OPERATIONAL ITEMS

1.1 Amend Quorum Requirements.

. Vote AGAINST proposals to reduce quorum requirements for shareholder
meetings below a majority of the shares outstanding unless there are
compelling reasons to support the proposal.

1.2 Amend Minor Bylaws.

. Vote FOR bylaw or charter changes that are of a housekeeping nature
(updates or corrections).

1.3 Change Company Name.

. Vote WITH Management

1.4 Change Date, Time, or Location of Annual Meeting.

. Vote FOR management proposals to change the date/time/location of the
annual meeting unless the proposed change is unreasonable.

. Vote AGAINST shareholder proposals to change the date/time/location of
the annual meeting unless the current scheduling or location is
unreasonable.

1.5 Transact Other Business.

. Vote AGAINST proposals to approve other business when it appears as
voting item.

AUDITORS

1.6 Ratifying Auditors

. Vote FOR Proposals to ratify auditors, unless any of the following apply:

. An auditor has a financial interest in or association with the
company, and is therefore not independent.

. Fees for non-audit services are excessive.

. There is reason to believe that the independent auditor has rendered
an opinion which is neither accurate nor indicative of the company's
financial position.

. Vote AGAINST shareholder proposals asking companies to prohibit or limit
their auditors from engaging in non-audit services.

. Vote AGAINST shareholder proposals asking for audit firm rotation.

. Vote on a CASE-BY-CASE basis on shareholder proposals asking the company
to discharge the auditor(s).

. Proposals are adequately covered under applicable provisions of
Sarbanes-Oxley Act or NYSE or SEC regulations.

2.0 THE BOARD OF DIRECTORS

2.1 Voting on Director Nominees

. Vote on director nominees should be made on a CASE-BY-CASE basis,
examining the following factors:

. Composition of the board and key board committees

. Attendance at board meetings

. Corporate governance provisions and takeover activity

. Long-term company performance relative to a market index

. Directors' investment in the company

. Whether the chairman is also serving as CEO

. Whether a retired CEO sits on the board

. WITHHOLD VOTES: However, there are some actions by directors that should
result in votes being WITHHELD. These instances include directors who:

. Attend less than 75% of the board and committee meetings without a
valid excuse.

. Implement or renew a dead-hand or modified dead-hand poison pill

. Ignore a shareholder proposal that is approved by a majority of the
shares outstanding.

. Ignore a shareholder proposal that is approved by a majority of the
votes cast for two consecutive years.

. Failed to act on takeover offers where the majority of the
shareholders tendered their shares.

. Are inside directors or affiliated outsiders; and sit on the audit,
compensation, or nominating committees or the company does not have
one of these committees.

. Are audit committee members; and the non-audit fees paid to the
auditor are excessive.

. Enacted egregious corporate governance policies or failed to replace
management as appropriate.

. Are inside directors or affiliated outside directors; and the full
board is less than majority independent.

. Are CEOs of public companies who serve on more than three public
company boards, i.e., more than two public company boards other than
their own board. (The term "public company" excludes an investment
company.)

. Serve on more than six public company boards. (The term "public
company" excludes an investment company.)

. Additionally, the following should result in votes being WITHHELD
(except from new nominees):

. If the director(s) receive more than 50% withhold votes of votes cast
and the issue that was the underlying cause of the high level of
withhold votes in the prior election has not been addressed.

. If the company has adopted or renewed a poison pill without
shareholder approval since the company's last annual meeting, does
not put the pill to a vote at the current annual meeting, and there
is no requirement to put the pill to shareholder vote within 12
months of its adoption. If a company that triggers this policy
commits to putting its pill to a shareholder vote within 12 months of
its adoption, OFI will not recommend a WITHHOLD vote.

2.2 Board Size

. Vote on a CASE-BY-CASE basis on shareholder proposals to maintain or
improve ratio of independent versus non-independent directors.

. Vote FOR proposals seeking to fix the board size or designate a range
for the board size.

. Vote on a CASE-BY-CASE basis on proposals that give management the
ability to alter the size of the board outside of a specified range
without shareholder approval.

2.3 Classification/Declassification of the Board

. Vote AGAINST proposals to classify the board.

. Vote FOR proposals to repeal classified boards and to elect all
directors annually. In addition, if 50% of shareholders request repeal
of the classified board and the board remains classified, withhold votes
for those directors at the next meeting at which directors are elected.

2.4 Cumulative Voting

. Vote FOR proposal to eliminate cumulative voting.

2.5 Require Majority Vote for Approval of Directors

. Vote AGAINST proposal to require majority vote approval for election of
directors

2.6 Director and Officer Indemnification and Liability Protection

. Proposals on director and officer indemnification and liability
protection should be evaluated on a CASE-BY-CASE basis, using Delaware
law as the standard.

. Vote FOR proposals to eliminate entirely directors' and officers'
liability for monetary damages for violating the duty of care, provided
the liability for gross negligence is not eliminated.

. Vote FOR indemnification proposals that would expand coverage beyond
just legal expenses to acts, such as negligence, that are more serious
violations of fiduciary obligation than mere carelessness, provided
coverage is not provided for gross negligence acts.

. Vote FOR only those proposals providing such expanded coverage in cases
when a director's or officer's legal defense was unsuccessful if both of
the following apply:

. The director was found to have acted in good faith and in a manner
that he reasonable believed was in the best interests of the company,
and

. Only if the director's legal expenses would be covered.

2.7 Establish/Amend Nominee Qualifications

. Vote on a CASE-BY-CASE basis on proposals that establish or amend
director qualifications.

. Votes should be based on how reasonable the criteria are and to what
degree they may preclude dissident nominees from joining the board.

. Vote AGAINST shareholder proposals requiring two candidates per board
seat.

2.8 Filling Vacancies/Removal of Directors.

. Vote AGAINST proposals that provide that directors may be removed only
for cause.

. Vote FOR proposals to restore shareholder ability to remove directors
with or without cause.

. Vote AGAINST proposals that provide that only continuing directors may
elect replacements to fill board vacancies.

. Vote FOR proposals that permit shareholders to elect directors to fill
board vacancies.

2.9 Independent Chairman (Separate Chairman/CEO)

. Generally vote FOR shareholder proposals requiring the position of
chairman to be filled by an independent director unless there are
compelling reasons to recommend against the proposal such as a
counterbalancing governance structure. This should include all of the
following:

. Designated lead director, elected by and from the independent board
members with clearly delineated and comprehensive duties

. Two-thirds independent board

. All-independent key committees

. Established governance guidelines

. The company should not have underperformed its peers and index on a
one-year and three-year basis, unless there has been a change in the
Chairman/CEO position within that time. Performance will be measured
according to shareholder returns against index and peers from the
performance summary table.

2.10 Majority of Independent Directors/Establishment of Committees

. Vote FOR shareholder proposals asking that a majority of directors be
independent but vote CASE-BY-CASE on proposals that more than a majority
of directors be independent. NYSE and NASDAQ already require that listed
companies have a majority of independent directors.

. Vote FOR shareholder proposals asking that board audit, compensation,
and/or nominating committees be composed exclusively of independent
directors if they currently do not meet that standard.

2.11 Open Access

. Vote CASE-BY-CASE on shareholder proposals asking for open access taking
into account the ownership threshold specified in the proposal and the
proponent's rationale for targeting the company in terms of board and
director conduct. (At the time of these policies, the SEC's proposed
rule in 2003 on Security Holder Director Nominations remained
outstanding.)

2.12 Stock Ownership Requirements

. Vote on a CASE-BY-CASE basis on shareholder proposals that mandate a
minimum amount of stock that a director must own in order to qualify as
a director or to remain on the board. While stock ownership on the part
of directors is favored, the company should determine the appropriate
ownership requirement.

. Vote on a CASE-BY-CASE basis on shareholder proposals asking companies
to adopt holding periods or retention ratios for their executives,
taking into account:

. Whether the company has any holding period, retention ratio or
officer ownership requirements in place. These should consist of:
Rigorous stock ownership guidelines or short-term holding period
requirement (six months to one year) coupled with a significant
long-term ownership requirement or a meaningful retention ratio.

. Actual officer stock ownership and the degree to which it meets or
exceeds the proponent's suggested holding period/retention ratio or
the company's own stock ownership or retention requirements.

2.13 Age or Term Limits

. Vote AGAINST shareholder or management proposals to limit the tenure of
directors either through term limits or mandatory retirement ages. OFI
views as management decision.

3.0 PROXY CONTESTS

3.1 Voting for Director Nominees in Contested Elections

. Votes in a contested election of directors must be evaluated on a
CASE-BY-CASE basis considering the following factors:

. Long-term financial performance of the target company relative to its
industry

. Management's track record

. Background to the proxy contest

. Qualifications of director nominees (both slates)

. Evaluation of what each side is offering shareholders as well as the
likelihood that the proposed objectives and goals can be met

. Stock ownership position

3.2 Reimbursing Proxy Solicitation Expenses

. Voting to reimburse proxy solicitation expenses should be analyzed on a
CASE-BY-CASE basis. In cases, which OFI recommends in favor of the
dissidents, OFI also recommends voting for reimbursing proxy
solicitation expenses.

3.3 Confidential Voting

. Vote AGAINST shareholder proposals requesting that corporations adopt
confidential voting, use independent vote tabulators and use independent
inspectors of election.

. If a proxy solicitor loses the right to inspect individual proxy cards
in advance of a meeting, this could result in many cards being voted
improperly (wrong signatures, for example) or not at all, with the
result that companies fail to reach a quorum count at their annual
meetings, and therefore these companies to incur the expense of second
meetings or votes.

4.0 ANTITAKEOVER DEFENSES AND VOTING RELATED ISSUES

4.1 Advance Notice Requirements for Shareholder Proposals/Nominations.

. Votes on advance notice proposals are determined on a CASE-BY-CASE
basis, generally giving support to those proposals which allow
shareholders to submit proposals as close to the meeting date as
reasonably possible and within the broadest window possible.

4.2 Amend Bylaws without Shareholder Consent

. Vote AGAINST proposals giving the board exclusive authority to amend the
bylaws.

. Vote FOR proposals giving the board the ability to amend the bylaws in
addition to shareholders.

4.3 Poison Pills

. Generally vote FOR shareholder proposals requesting to put extraordinary
benefits contained in Supplemental Executive Retirement Plan agreements
to a shareholder vote unless the company's executive pension plans do
not contain excessive benefits beyond what is offered under
employee-wide plans.

. Vote AGAINST proposals that increase authorized common stock fro the
explicit purpose of implementing a shareholder rights plan (poison pill).

. Vote FOR share holder proposals requesting that the company submit its
poison pill to a shareholder vote or redeem it.

. Vote FOR shareholder proposals asking that any future pill be put to a
shareholder vote.

4.4 Shareholder Ability to Act by Written Consent

. Vote AGAINST proposals to restrict or prohibit shareholder ability to
take action by written consent.

. Vote FOR proposals to allow or make easier shareholder action by written
consent.

4.5 Shareholder Ability to Call Special Meetings

. Vote AGAINST proposals to restrict or prohibit shareholder ability to
call special meetings.

. Vote FOR proposals that remove restrictions on the right of shareholders
to act independently of management.

4.6 Establish Shareholder Advisory Committee

. Vote WITH Management

4.7 Supermajority Vote Requirements

. Vote AGAINST proposals to require a supermajority shareholder vote.

. Vote FOR proposals to lower supermajority vote requirements.

5.0 MERGERS AND CORPORATE RESTRUCTURINGS

5.1 Appraisal Rights

. Vote FOR proposals to restore, or provide shareholders with, rights of
appraisal.

5.2 Asset Purchases

. Vote CASE-BY-CASE on asset purchase proposals, considering the following
factors:

. Purchase price

. Fairness opinion

. Financial and strategic benefits

. How the deal was negotiated

. Conflicts of interest

. Other alternatives for the business

. Non-completion risk

5.3 Asset Sales

. Vote CASE-BY-CASE on asset sale proposals, considering the following
factors:

. Impact on the balance sheet/working capital

. Potential elimination of diseconomies

. Anticipated financial and operating benefits

. Anticipated use of funds

. Value received for the asset

. Fairness opinion

. How the deal was negotiated

. Conflicts of interest

5.4 Bundled Proposals

. Review on a CASE-BY-CASE basis on bundled or "conditioned" proxy
proposals. In the case of items that are conditioned upon each other,
examine the benefits and costs of the packaged items. In instances when
the joint effect of the conditioned items is not in shareholders' best
interests, vote against the proposals. If the combined effect is
positive, support such proposals.

5.5 Conversion of Securities

. Votes on proposals regarding conversion of securities are determined on
a CASE-BY-CASE basis. When evaluating these proposals, the investor
should review the dilution to existing shareholders, the conversion
price relative to the market value, financial issues, control issues,
termination penalties, and conflicts of interest.

5.6 Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy
Plans/Reverse Leveraged Buyouts/Wrap Plans

. Votes on proposals to increase common and/or preferred shares and to
issue shares as part of a debt restructuring plan are determined on a
CASE-BY-CASE basis, taking into consideration the following:

. Dilution to existing shareholders' position

. Terms of the offer

. Financial issues

. Management's efforts to pursue other alternatives

. Control issues

. Conflicts of interest

. Vote CASE-BY-CASE on the debt restructuring if it is expected that the
company will file for bankruptcy if the transaction is not approved.

5.7 Formation of Holding Company

. Votes on proposals regarding the formation of a holding company should
be determined on a CASE-BY-CASE basis, taking into consideration the
following:

. The reasons for the change

. Any financial or tax benefits

. Regulatory benefits

. Increases in capital structure

. Changes to the articles of incorporation or bylaws of the company.

. Absent compelling financial reasons to recommend the transaction, vote
AGAINST the formation of a holding company if the transaction would
include either of the following:

. Increases in common or preferred stock in excess of the allowable
maximum as calculated by the ISS Capital Structure Model.

. Adverse changes in shareholder rights.

5.8 Going Private Transactions (LBOs and Minority Squeezeouts)

. Votes on going private transactions on a CASE-BY-CASE basis, taking into
account the following:

. Offer price/premium

. Fairness opinion

. How the deal was negotiated

. Conflicts of interests

. Other alternatives/offers considered

. Non-completion risk

5.9 Joint Venture

. Votes on a CASE-BY-CASE basis on proposals to form joint ventures,
taking into account the following:

. Percentage of assets/business contributed

. Percentage of ownership

. Financial and strategic benefits

. Governance structure

. Conflicts of interest

. Other alternatives

. Non-completion risk

5.10 Liquidations

. Votes on liquidations should be made on a CASE-BY-CASE basis after
reviewing management's efforts to pursue other alternatives, appraisal
value of assets, and the compensation plan for executives managing the
liquidation.

. Vote on a CASE-BY-CASE basis, if the company will file for bankruptcy if
the proposal is not approved.

5.11 Mergers and Acquisitions/Issuance of Shares to Facilitate Merger or
Acquisition

. Votes on mergers and acquisitions should be considered on a CASE-BY-CASE
basis, determining whether the transaction enhances shareholder value by
giving consideration to the following:

. Prospects of the combined company, anticipated financial and
operating benefits

. Offer price (premium or discount)

. Fairness opinion

. How the deal was negotiated

. Changes in corporate governance

. Change in the capital structure

. Conflicts of interest

5.12 Private Placements/Warrants/Convertible Debenture

. Votes on proposals regarding private placements should be determined on
a CASE-BY-CASE basis. When evaluating these proposals the invest should
review:

. Dilution to existing shareholders' position

. Terms of the offer

. Financial issues

. Management's efforts to pursue other alternatives

. Control issues

. Conflicts of interest

5.13 Spinoffs

. Votes on spinoffs should be considered on a CASE-BY-CASE basis depending
on:

. Tax and regulatory advantages

. Planned use of the sale proceeds

. Valuation of spinoff

. Fairness opinion

. Benefits to the parent company

. Conflicts of interest

. Managerial incentives

. Corporate governance changes

. Changes in the capital structure

5.14 Value Maximization Proposals

. Votes on a CASE-BY-CASE basis on shareholder proposals seeking to
maximize shareholder value by hiring a financial advisor to explore
strategic alternatives, selling the company or liquidating the company
and distributing the proceeds to shareholders. These proposals should be
evaluated based on the following factors: prolonged poor performance
with no turnaround in sight, signs of entrenched board and management,
strategic plan in place for improving value, likelihood of receiving
reasonable value in a sale or dissolution and whether the company is
actively exploring its strategic options, including retaining a
financial advisor.

5.15 Severance Agreements that are Operative in Event of Change in Control

. Review CASE-BY-CASE, with consideration give to ISS "transfer-of-wealth"
analysis. (See section 8.2)

6.0 STATE OF INCORPORATION

6.1 Control Share Acquisition Provisions

. Vote FOR proposals to opt out of control share acquisition statutes
unless doing so would enable the completion of a takeover that would be
detrimental to shareholders.

. Vote AGAINST proposals to amend the charter to include control share
acquisition provisions.

. Vote FOR proposals to restore voting rights to the control shares.

6.2 Control Share Cashout Provisions

. Vote FOR proposals to opt out of control share cashout statutes.

6.3 Disgorgement Provisions

. Vote FOR proposals to opt out of state disgorgement provisions.

6.4 Fair Price Provisions

. Vote proposals to adopt fair price provisions on a CASE-BY-CASE basis,
evaluating factors such as the vote required to approve the proposed
acquisition, the vote required to repeal the fair price provision, and
the mechanism for determining the fair price.

. Generally vote AGAINST fair price provisions with shareholder vote
requirements greater than a majority of disinterested shares.

6.5 Freezeout Provisions

. Vote FOR proposals to opt out of state freezeout provisions.

6.6 Greenmail

. Vote FOR proposals to adopt anti-greenmail charter of bylaw amendments
or otherwise restrict a company's ability to make greenmail payments.

. Review on a CASE-BY-CASE basis on anti-greenmail proposals when they are
bundled with other charter or bylaw amendments.

6.7 Reincorporation Proposals

. Proposals to change a company's state of incorporation should be
evaluated on a CASE-BY-CASE basis, giving consideration to both
financial and corporate governance concerns, including the reasons for
reincorporating, a comparison of the governance provisions, and a
comparison of the jurisdictional laws.

. Vote FOR reincorporation when the economic factors outweigh any neutral
or negative governance changes.

6.8 Stakeholder Provisions

. Vote AGAINST proposals that ask the board to consider non-shareholder
constituencies or other non-financial effects when evaluating a merger
or business combination.

6.9 State Anti-takeover Statutes

. Review on a CASE-BY-CASE basis proposals to opt in or out of state
takeover statutes (including control share acquisition statutes, control
share cash-out statutes, freezeout provisions, fair price provisions,
stakeholder laws, poison pill endorsements, severance pay and labor
contract provisions, anti-greenmail provisions, and disgorgement
provisions).

7.0 CAPITAL STRUCTURE

7.1 Adjustments to Par Value of Common Stock

. Vote FOR management proposals to reduce the par value of common stock.

7.2 Common Stock Authorization

. Votes on proposals to increase the number of shares of common stock
authorized for issuance are determined on a CASE-BY-CASE basis using a
model developed by ISS.

. Vote AGAINST proposals at companies with dual-class capital structures
to increase the number of authorized shares of the class of stock that
has superior voting rights.

. Vote FOR proposals to approve increases beyond the allowable increase
when a company's shares are in danger of being delisted or if a
company's ability to continue to operate as a going concern is uncertain.

7.3 Dual-Class Stock

. Vote AGAINST proposals to create a new class of common stock with
superior voting rights.

. Vote FOR proposals to create a new class of non-voting or sub-voting
common stock if:

. It is intended for financing purposes with minimal or no dilution to
current shareholders

. It is not designed to preserve the voting power of an insider or
significant shareholder

7.4 Issue Stock for Use with Rights Plan

. Vote AGAINST proposals that increase authorized common stock for the
explicit purpose of implementing a shareholder rights plan (poison pill).

7.5 Preemptive Rights

. Review on a CASE-BY-CASE basis on shareholder proposals that seek
preemptive rights. In evaluating proposals on preemptive right, consider
the size of a company, the characteristics of its shareholder base, and
the liquidity of the stock.

7.6 Preferred Stock

. Vote FOR shareholder proposals to submit preferred stock issuance to
shareholder vote.

. Vote AGAINST proposals authorizing the creation of new classes of
preferred stock with unspecified voting, conversion, dividend
distribution, and other rights ("blank check" preferred stock).

. Vote FOR proposals to create "declawed" blank check preferred stock
(stock that cannot be used as a takeover defense)

. Vote FOR proposals to authorize preferred stock in cases where the
company specifies the voting, dividend, conversion, and other rights of
such stock and the terms of the preferred stock appear reasonable.

. Vote AGAINST proposals to increase the number of blank check preferred
stock authorized for issuance when no shares have been issued or
reserved for a specific purpose.

. Vote AGAINST proposals to increase the number of blank check preferred
shares unless, (i) class of stock has already been approved by
shareholders and (ii) the company has a record of issuing preferred
stock for legitimate financing purposes.

7.7 Pledge of Assets for Debt (Generally Foreign Issuers)

. OFI will consider these proposals on a CASE-BY-CASE basis. Generally,
OFI will support increasing the debt-to-equity ratio to 100%. Any
increase beyond 100% will require further assessment, with a comparison
of the company to its industry peers or country of origin.

In certain foreign markets, such as France, Latin America and India,
companies often propose to pledge assets for debt, or seek to issue
bonds which increase debt-to-equity ratios up to 300%.

7.8 Recapitalization

. Votes CASE-BY-CASE on recapitalizations (reclassification of
securities), taking into account the following:

. More simplified capital structure

. Enhanced liquidity

. Fairness of conversion terms

. Impact on voting power and dividends

. Reasons for the reclassification

. Conflicts of interest

. Other alternatives considered

7.9 Reverse Stock Splits

. Vote FOR management proposals to implement a reverse stock split when
the number of authorized shares will be proportionately reduced.

. Vote FOR management proposals to implement a reverse stock split to
avoid delisting.

. Votes on proposals to implement a reverse stock split that do not
proportionately reduce the number of shares authorized for issue should
be determined on a CASE-BY-CASE basis using a model developed by ISS.

7.10 Share Purchase Programs

. Vote FOR management proposals to institute open-market share repurchase
plans in which all shareholders may participate on equal terms.

7.11 Stock Distributions: Splits and Dividends

. Vote FOR management proposals to increase the common share authorization
for a stock split or share dividend, provided that the increase in
authorized shares would not result in an excessive number of shares
available for issuance as determined using a model developed by ISS.

7.12 Tracking Stock

. Votes on the creation of tracking stock are determined on a CASE-BY-CASE
basis, weighing the strategic value of the transaction against such
factors as: adverse governance changes, excessive increases in
authorized capital stock, unfair method of distribution, diminution of
voting rights, adverse conversion features, negative impact on stock
option plans, and other alternatives such as spinoff.

8.0 EXECUTIVE AND DIRECTOR COMPENSATION

8.1 Equity-based Compensation Plans

. Vote compensation proposals on a CASE-BY-CASE basis.

. In general, OFI considers compensation questions such as stock option
plans and bonus plans to be ordinary business activity. OFI analyzes
stock option plans, paying particular attention to their dilutive
effect. While OFI generally supports management proposals, OFI opposes
compensation proposals that OFI believes to be excessive, with
consideration of factors including the company's industry, market
capitalization, revenues and cash flow.

. Vote AGAINST plans that expressly permit the repricing of underwater
stock options without shareholder approval. Generally vote AGAINST plans
in which the CEO participates if there is a disconnect between the CEO's
pay and company performance (an increase in pay and a decrease in
performance) and the main source of the pay increase (over half) is
equity-based. A decrease in performance is based on negative one- and
three-year total shareholder returns. An increase in pay is based on the
CEO's total direct compensation (salary, cash bonus, present value of
stock options, face value of restricted stock, face value of long-term
incentive plan payouts, and all other compensation) increasing over the
previous year. Also WITHHOLD votes from the Compensation Committee
members.

8.2 Director Compensation

Examine compensation proposals on a CASE-BY-CASE basis. In general, OFI
considers compensation questions such as stock option plans and bonus
plans to be ordinary business activity. OFI analyzes stock option plans,
paying particular attention to their dilutive effect. While OFI
generally supports management proposals, OFI opposes excessive
compensation proposals, with consideration of factors including the
company's industry, market capitalization, revenues and cash flow.

8.3 Bonus for Retiring Director

. Examine on a CASE-BY CASE basis. Factors we consider typically include
length of service, company's accomplishments during the Director's
tenure, and whether we believe the bonus is commensurate with the
Director's contribution to the company.

8.4 Cash Bonus Plan

. Consider on a CASE-BY-CASE basis. In general, OFI considers compensation
questions such as cash bonus plans to be ordinary business activity.
While we generally support management proposals, we oppose compensation
proposals we believe are excessive.

8.5 Stock Plans in Lieu of Cash

. Generally vote FOR management proposals, unless OFI believe the proposal
is excessive.

In casting its vote, OFI reviews the ISS recommendation per a "transfer
of wealth" binomial formula that determines an appropriate cap for the
wealth transfer based upon the company's industry peers.

. Vote FOR plans which provide participants with the option of taking all
or a portion of their cash compensation in the form of stock are
determined on a CASE-BY-CASE basis.

. Vote FOR plans which provide a dollar-for-dollar cash for stock exchange.

. Vote FOR plans which do not

8.6 Director Retirement Plans

. Vote FOR retirement plans for non-employee directors if the number of
shares reserve is less than 3% of outstanding shares and the exercise
price is 100% of fair market value.

. Vote AGAINST shareholder proposals to eliminate retirement plans for
non-employee directors, if the number of shares is less than 3% of
outstanding shares and exercise price is 100% of fair market value.

8.7 Management Proposals Seeking Approval to Reprice Options

. Votes on management proposals seeking approval to reprice options are
evaluated on a CASE-BY-CASE basis giving consideration to the following:

. Historic trading patterns

. Rationale for the repricing

. Value-for-value exchange

. Option vesting

. Term of the option

. Exercise price

. Participation

8.8 Employee Stock Purchase Plans

. Votes on employee stock purchase plans should be determined on a
CASE-BY-CASE basis.

. Votes FOR employee stock purchase plans where ALL of the following apply:

. Purchase price is at least 85% of fair market value

. Offering period is 27 months or less

. The number of shares allocated to the plan is 10% or less of the
outstanding shares

. Votes AGAINST employee stock purchase plans where any of the following
apply:

. Purchase price is at least 85% of fair market value

. Offering period is greater than 27 months

. The number of shares allocated to the plan is more than 10% of the
outstanding shares

8.9 Incentive Bonus Plans and Tax Deductibility Proposals (OBRA-Related
Compensation Proposals)

. Vote FOR proposals that simply amend shareholder-approved compensation
plans to include administrative features or place a cap on the annual
grants any one participant may receive to comply with the provisions of
Section 162(m).

. Vote FOR proposals to add performance goals to existing compensation
plans to comply with the provisions of Section 162(m) unless they are
clearly inappropriate.

. Votes to amend existing plans to increase shares reserved and to qualify
for favorable tax treatment under the provisions of Section 162(m)
should be considered on a CASE-BY-CASE basis using a proprietary,
quantitative model developed by ISS.

. Generally vote FOR cash or cash and stock bonus plans that are submitted
to shareholders for the purpose of exempting compensation from taxes
under the provisions of Section 162(m) if no increase in shares is
requested.

8.10 Employee Stock Ownership Plans (ESOPs)

. Vote FOR proposals to implement an ESOP or increase authorized shares
for existing ESOPs, unless the number of shares allocated to the ESOP is
excessive (more than 5% of outstanding shares.)

8.11 Shareholder Proposal to Submit Executive Compensation to Shareholder
Vote

. Vote WITH MANAGEMENT.

8.12 401(k) Employee Benefit Plans

. Vote FOR proposals to implement a 401(k) savings plan for employees.

8.13 Shareholder Proposals Regarding Executive and Director Pay

. Generally, vote FOR shareholder proposals seeking additional disclosure
of executive and director pay information, provided the information
requested is relevant to shareholders' needs, would not put the company
at a competitive disadvantage relative to its industry, and is not
unduly burdensome to the company.

. Generally vote FOR shareholder proposals seeking disclosure regarding
the company's, board's, or committee's use of compensation consultants,
such as company name, business relationship(s) and fees paid.

. Vote WITH MANAGEMENT on shareholder proposals requiring director fees be
paid in stock only.

. Vote FOR shareholder proposals to put option repricings to a shareholder
vote.

. Vote on a CASE-BY-CASE basis for all other shareholder proposals
regarding executive and director pay, taking into account company
performance, pay level versus peers, pay level versus industry, and long
term corporate outlook.

8.14 Performance-Based Stock Options

. Generally vote FOR shareholder proposals advocating the use of
performance-based stock options (indexed, premium-priced, and
performance-vested options), unless:

. The proposal is overly restrictive (e.g., it mandates that awards to
all employees must be performance-based or all awards to top
executives must be a particular type, such as indexed options), or

. The company demonstrates that it is using a substantial portion of
performance-based awards for its top executives

8.15 Pay-for-Performance

. Generally vote FOR shareholder proposals that align a significant
portion of total compensation of senior executives to company
performance. In evaluating the proposals, the following factors will be
analyzed:

. What aspects of the company's short-term and long-term incentive
programs are performance driven?

. Can shareholders assess the correlation between pay and performance
based on the company's disclosure?

. What type of industry does the company belong to?

. Which stage of the business cycle does the company belong to?

8.16 Golden Parachutes and Executive Severance Agreements

. Vote FOR shareholder proposals to require golden parachutes or executive
severance agreements to be submitted for shareholder ratification,
unless the proposal requires shareholder approval prior to entering into
employment contracts.

. Vote on a CASE-BY-CASE basis on proposals to ratify or cancel golden
parachutes. An acceptable parachute should include the following:

. The parachute should be less attractive than an ongoing employment
opportunity with the firm

. The triggering mechanism should be beyond the control management

. The amount should not exceed three times base salary plus guaranteed
benefits

8.17 Pension Plan Income Accounting

. Generally vote FOR shareholder proposals to exclude pension plan income
in the calculation of earnings used in determining executive
bonuses/compensation.

8.18 Supplemental Executive Retirement Plans (SERPs)

. Generally vote FOR shareholder proposals requesting to put extraordinary
benefits contained in SERP agreement to a shareholder vote unless the
company's executive pension plans do not contain excessive benefits
beyond what it offered under employee-wide plans.

. Generally vote FOR shareholder proposals requesting to limit the
executive benefits provided under the company's supplemental executive
retirement plan (SERP) by limiting covered compensation to a senior
executive's annual salary and excluding all incentive or bonus pay from
the plan's definition of covered compensation used to establish such
benefits.

8.19 Claw-back of Payments under Restatements

. Vote on a CASE-BY-CASE basis on shareholder proposals requesting
clawbacks or recoupment of bonuses or equity, considering factors such
as:

. The coverage of employees, whether it applies to all employees,
senior executives or only employees committing fraud which resulted
in the restatement

. The nature of the proposal where financial restatement is due to fraud

. Whether or not the company has had material financial problems
resulting in chronic restatements

. The adoption of a robust and formal bonus/equity recoupment policy

. If a company's bonus recoupment policy provides overly broad
discretion to the board in recovering compensation, generally vote
FOR the proposal

. If the proposal seeks bonus recoupment from senior executives or
employees committing fraud, generally vote FOR the proposal.

9.0 SOCIAL, POLITICAL AND ENVIRONMENTAL ISSUES

In the case of social, political and environmental responsibility issues,
OFI believes the issues do not primarily involve financial considerations and
OFI ABSTAINS from voting on those issues.

PIMCO

PROXY VOTING POLICY AND PROCEDURES/1/

The following are general proxy voting policies and procedures ("Policies
and Procedures") adopted by Pacific Investment Management Company LLC
("PIMCO"), an investment adviser registered under the Investment Advisers Act
of 1940, as amended ("Advisers Act")./2/ PIMCO serves as the investment adviser
to a wide range of domestic and international clients, including investment
companies registered under the Investment Company Act of 1940, as amended
("1940 Act") and separate investment accounts for other clients./3/ These
Policies and Procedures are adopted to ensure compliance with Rule 206(4)-6
under the Advisers Act, other applicable fiduciary obligations of PIMCO and the
applicable rules and regulations of the Securities and Exchange Commission
("SEC") and interpretations of its staff. In addition to SEC requirements
governing advisers, PIMCO's Policies and Procedures reflect the long-standing
fiduciary standards and responsibilities applicable to investment advisers with
respect to accounts subject to the Employee Retirement Income Security Act of
1974 ("ERISA"), as set forth in the Department of Labor's rules and
regulations./4/

PIMCO will implement these Policies and Procedures for each of its
respective clients as required under applicable law, unless expressly directed
by a client in writing to refrain from voting that client's proxies. PIMCO's
authority to vote proxies on behalf of its clients is established by its
advisory contracts, comparable documents or by an overall delegation of
discretionary authority over its client's assets. Recognizing that proxy voting
is a rare event in the realm of fixed income investing and is typically limited
to solicitation of consent to changes in features of debt securities, these
Policies and Procedures also apply to any voting rights and/or consent rights
of PIMCO, on behalf of its clients, with respect to debt securities, including
but not limited to, plans of reorganization, and waivers and consents under
applicable indentures./5/

Set forth below are PIMCO's Policies and Procedures with respect to any
voting or consent rights of advisory clients over which PIMCO has discretionary
voting authority. These Policies and Procedures may be revised from time to
time.

GENERAL STATEMENTS OF POLICY

These Policies and Procedures are designed and implemented in a manner
reasonably expected to ensure that voting and consent rights are exercised in
the best interests of PIMCO's clients. Each proxy is voted on a case-by-case
basis taking into consideration any relevant contractual obligations as well as
other relevant facts and circumstances.

PIMCO may abstain from voting a client proxy under the following
circumstances: (1) when the economic effect on shareholders' interests or the
value of the portfolio holding is indeterminable or insignificant; or (2) when
the cost of voting the proxies outweighs the benefits.

- - --------
/1/ Revised as of May 7, 2007.
/2/ These Policies and Procedures are adopted by PIMCO pursuant to Rule
206(4)-6 under the Advisers Act, effective August 6, 2003. SEE PROXY
VOTING BY INVESTMENT ADVISERS, IA Release No. 2106 (January 31, 2003).
/3/ These Policies and Procedures address proxy voting considerations under
U.S. law and regulations and do not address the laws or requirements of
other jurisdictions.
/4/ Department of Labor Bulletin 94-2, 29 C.F.R. 2509.94-2 (July 29, 1994). If
a client is subject to ERISA, PIMCO will be responsible for voting proxies
with respect to the client's account, unless the client has expressly
retained the right and obligation to vote the proxies, and provided prior
written notice to PIMCO of this retention.
/5/ For purposes of these Policies and Procedures, proxy voting includes any
voting rights, consent rights or other voting authority of PIMCO on behalf
of its clients. For purposes of these Policies and Procedures, voting or
consent rights shall not include matters which are primarily investment
decisions, including tender offers, exchange offers, conversions, put
options, redemptions, and dutch auctions.

CONFLICTS OF INTEREST

PIMCO seeks to resolve any material conflicts of interest by voting in good
faith in the best interest of its clients. If a material conflict of interest
should arise, PIMCO will seek to resolve such conflict in the client's best
interest by pursuing any one of the following courses of action:

1. convening an ad-hoc committee to assess and resolve the conflict;/6/

2. voting in accordance with the instructions/consent of a client after
providing notice of and disclosing the conflict to that client;

3. voting the proxy in accordance with the recommendation of an
independent third-party service provider;

4. suggesting that the client engage another party to determine how the
proxies should be voted;

5. delegating the vote to an independent third-party service provider; or

6. voting in accordance with the factors discussed in these Policies and
Procedures.

PIMCO will document the process of resolving any identified material
conflict of interest.

REPORTING REQUIREMENTS AND THE AVAILABILITY OF PROXY VOTING RECORDS

Except to the extent required by applicable law or otherwise approved by
PIMCO, PIMCO will not disclose to third parties how it voted a proxy on behalf
of a client. However, upon request from an appropriately authorized individual,
PIMCO will disclose to its clients or the entity delegating the voting
authority to PIMCO for such clients (E.G., trustees or consultants retained by
the client), how PIMCO voted such client's proxy. In addition, PIMCO provides
its clients with a copy of these Policies and Procedures or a concise summary
of these Policies and Procedures: (i) in Part II of Form ADV; (ii) together
with a periodic account statement in a separate mailing; or (iii) any other
means as determined by PIMCO. The summary will state that these Policies and
Procedures are available upon request and will inform clients that information
about how PIMCO voted that client's proxies is available upon request.

PIMCO RECORD KEEPING

PIMCO or its agent maintains proxy voting records as required by Rule
204-2(c) of the Advisers Act. These records include: (1) a copy of all proxy
voting policies and procedures; (2) proxy statements (or other disclosures
accompanying requests for client consent) received regarding client securities
(which may be satisfied by relying on obtaining a copy of a proxy statement
from the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR)
system or a third party provided that the third party undertakes to provide a
copy promptly upon request); (3) a record of each vote cast by PIMCO on behalf
of a client; (4) a copy of any document created by PIMCO that was material to
making a decision on how to vote proxies on behalf of a client or that
memorializes the basis for that decision; and (5) a copy of each written client
request for proxy voting records and any written response from PIMCO to any
(written or oral) client request for such records. Additionally, PIMCO or its
agent maintains any documentation related to an identified material conflict of
interest.

Proxy voting books and records are maintained by PIMCO or its agent in an
easily accessible place for a period of five years from the end of the fiscal
year during which the last entry was made on such record, the first two years
in the offices of PIMCO or its agent.

- - --------
/6/ Any committee must be comprised of personnel who have no direct interest
in the outcome of the potential conflict.

REVIEW AND OVERSIGHT

PIMCO's proxy voting procedures are described below. PIMCO's Compliance
Group will provide for the supervision and periodic review, no less than on an
annual basis, of its proxy voting activities and the implementation of these
Policies and Procedures.

Because PIMCO has contracted with State Street Investment Manager Solutions,
LLC ("IMS West") to perform portfolio accounting, securities processing and
settlement processing on behalf of PIMCO, certain of the following procedures
involve IMS West in administering and implementing the proxy voting process.
IMS West will review and monitor the proxy voting process to ensure that
proxies are voted on a timely basis.

1. TRANSMIT PROXY TO PIMCO. IMS West will forward to PIMCO's Compliance
Group each proxy received from registered owners of record (E.G., custodian
bank or other third party service providers).

2. CONFLICTS OF INTEREST. PIMCO's Compliance Group will review each proxy to
determine whether there may be a material conflict between PIMCO and its
client. As part of this review, the group will determine whether the issuer of
the security or proponent of the proposal is a client of PIMCO, or if a client
has actively solicited PIMCO to support a particular position. If no conflict
exists, this group will forward each proxy to PIMCO's Middle Office Group for
consideration by the appropriate portfolio manager(s). However, if a conflict
does exist, PIMCO's Compliance Group will seek to resolve any such conflict in
accordance with these Policies and Procedures.

3. VOTE. The portfolio manager will review the information, will vote the
proxy in accordance with these Policies and Procedures and will return the
voted proxy to PIMCO's Middle Office Group.

4. REVIEW. PIMCO's Middle Office Group will review each proxy that was
submitted to and completed by the appropriate portfolio manager. PIMCO's Middle
Office Group will forward the voted proxy back to IMS West with the portfolio
manager's decision as to how it should be voted.

5. TRANSMITTAL TO THIRD PARTIES. IMS West will document the portfolio
manager's decision for each proxy received from PIMCO's Middle Office Group in
a format designated by the custodian bank or other third party service
provider. IMS West will maintain a log of all corporate actions, including
proxy voting, which indicates, among other things, the date the notice was
received and verified, PIMCO's response, the date and time the custodian bank
or other third party service provider was notified, the expiration date and any
action taken.

6. INFORMATION BARRIERS. Certain entities controlling, controlled by, or
under common control with PIMCO ("Affiliates") may be engaged in banking,
investment advisory, broker-dealer and investment banking activities. PIMCO
personnel and PIMCO's agents are prohibited from disclosing information
regarding PIMCO's voting intentions to any Affiliate. Any PIMCO personnel
involved in the proxy voting process who are contacted by an Affiliate
regarding the manner in which PIMCO or its delegate intend to vote on a
specific issue must terminate the contact and notify the Compliance Group
immediately.

CATEGORIES OF PROXY VOTING ISSUES

In general, PIMCO reviews and considers corporate governance issues related
to proxy matters and generally supports proposals that foster good corporate
governance practices. PIMCO considers each proposal on a case-by-case basis,
taking into consideration various factors and all relevant facts and
circumstances at the time of the vote. PIMCO may vote proxies as recommended by
management on routine matters related to the operation of the issuer and on
matters not expected to have a significant economic impact on the issuer and/or
shareholders, because PIMCO believes the recommendations by the issuer
generally are in shareholders' best interests, and therefore in the best
economic interest of PIMCO's clients. The following is a non-exhaustive list of
issues that may be included in proxy materials submitted to clients of PIMCO,
and a non-exhaustive list of factors that PIMCO may consider in determining how
to vote the client's proxies.

BOARD OF DIRECTORS

1. INDEPENDENCE. PIMCO may consider the following factors when voting on
director independence issues: (i) majority requirements for the board and the
audit, nominating, compensation and/or other board committees; and (ii) whether
the issuer adheres to and/or is subject to legal and regulatory requirements.

2. DIRECTOR TENURE AND RETIREMENT. PIMCO may consider the following factors
when voting on limiting the term of outside directors: (i) the introduction of
new viewpoints on the board; (ii) a reasonable retirement age for the outside
directors; and (iii) the impact on the board's stability and continuity.

3. NOMINATIONS IN ELECTIONS. PIMCO may consider the following factors when
voting on uncontested elections: (i) composition of the board; (ii) nominee
availability and attendance at meetings; (iii) any investment made by the
nominee in the issuer; and (iv) long-term corporate performance and the price
of the issuer's securities.

4. SEPARATION OF CHAIRMAN AND CEO POSITIONS. PIMCO may consider the
following factors when voting on proposals requiring that the positions of
chairman of the board and the chief executive officer not be filled by the same
person: (i) any potential conflict of interest with respect to the board's
ability to review and oversee management's actions; and (ii) any potential
effect on the issuer's productivity and efficiency.

5. D&O INDEMNIFICATION AND LIABILITY PROTECTION. PIMCO may consider the
following factors when voting on proposals that include director and officer
indemnification and liability protection: (i) indemnifying directors for
conduct in the normal course of business; (ii) limiting liability for monetary
damages for violating the duty of care; (iii) expanding coverage beyond legal
expenses to acts that represent more serious violations of fiduciary obligation
than carelessness (E.G. negligence); and (iv) providing expanded coverage in
cases where a director's legal defense was unsuccessful if the director was
found to have acted in good faith and in a manner that he or she reasonably
believed was in the best interests of the company.

6. STOCK OWNERSHIP. PIMCO may consider the following factors when voting on
proposals on mandatory share ownership requirements for directors: (i) the
benefits of additional vested interest in the issuer's stock; (ii) the ability
of a director to fulfill his duties to the issuer regardless of the extent of
his stock ownership; and (iii) the impact of limiting the number of persons
qualified to be directors.

PROXY CONTESTS AND PROXY CONTEST DEFENSES

1. CONTESTED DIRECTOR NOMINATIONS. PIMCO may consider the following factors
when voting on proposals for director nominees in a contested election:
(i) background and reason for the proxy contest; (ii) qualifications of the
director nominees; (iii) management's track record; (iv) the issuer's long-term
financial performance within its industry; (v) assessment of what each side is
offering shareholders; (vi) the likelihood that the proposed objectives and
goals can be met; and (vii) stock ownership positions of the director nominees.

2. REIMBURSEMENT FOR PROXY SOLICITATION EXPENSES. PIMCO may consider the
following factors when voting on reimbursement for proxy solicitation expenses:
(i) identity of the persons who will pay the expenses; (ii) estimated total
cost of solicitation; (iii) total expenditures to date; (iv) fees to be paid to
proxy solicitation firms; and (v) when applicable, terms of a proxy contest
settlement.

3. ABILITY TO ALTER THE SIZE OF THE BOARD BY SHAREHOLDERS. PIMCO may
consider whether the proposal seeks to fix the size of the board and/or require
shareholder approval to alter the size of the board.

4. ABILITY TO REMOVE DIRECTORS BY SHAREHOLDERS. PIMCO may consider whether
the proposal allows shareholders to remove directors with or without cause
and/or allow shareholders to elect directors and fill board vacancies.

5. CUMULATIVE VOTING. PIMCO may consider the following factors when voting
on cumulative voting proposals: (i) the ability of significant stockholders to
elect a director of their choosing; (ii) the ability of minority shareholders
to concentrate their support in favor of a director(s) of their choosing; and
(iii) any potential limitation placed on the director's ability to work for all
shareholders.

6. SUPERMAJORITY SHAREHOLDER REQUIREMENTS. PIMCO may consider all relevant
factors, including but not limited to limiting the ability of shareholders to
effect change when voting on supermajority requirements to approve an issuer's
charter or bylaws, or to approve a merger or other significant business
combination that would require a level of voting approval in excess of a simple
majority.

TENDER OFFER DEFENSES

1. CLASSIFIED BOARDS. PIMCO may consider the following factors when voting
on classified boards: (i) providing continuity to the issuer; (ii) promoting
long-term planning for the issuer; and (iii) guarding against unsolicited
takeovers.

2. POISON PILLS. PIMCO may consider the following factors when voting on
poison pills: (i) supporting proposals to require a shareholder vote on other
shareholder rights plans; (ii) ratifying or redeeming a poison pill in the
interest of protecting the value of the issuer; and (iii) other alternatives to
prevent a takeover at a price clearly below the true value of the issuer.

3. FAIR PRICE PROVISIONS. PIMCO may consider the following factors when
voting on proposals with respect to fair price provisions: (i) the vote
required to approve the proposed acquisition; (ii) the vote required to repeal
the fair price provision; (iii) the mechanism for determining fair price; and
(iv) whether these provisions are bundled with other anti-takeover measures
(E.G., supermajority voting requirements) that may entrench management and
discourage attractive tender offers.

CAPITAL STRUCTURE

1. STOCK AUTHORIZATIONS. PIMCO may consider the following factors to help
distinguish between legitimate proposals to authorize increases in common stock
for expansion and other corporate purchases and those proposals designed
primarily as an anti-takeover device: (i) the purpose and need for the stock
increase; (ii) the percentage increase with respect to the authorization
currently in place; (iii) voting rights of the stock; and (iv) overall
capitalization structure of the issuer.

2. ISSUANCE OF PREFERRED STOCK. PIMCO may consider the following factors
when voting on the issuance of preferred stock: (i) whether the new class of
preferred stock has unspecified voting, conversion, dividend distribution, and
other rights; (ii) whether the issuer expressly states that the stock will not
be used as a takeover defense or carry superior voting rights; (iii) whether
the issuer specifies the voting, dividend, conversion, and other rights of such
stock and the terms of the preferred stock appear reasonable; and (iv) whether
the stated purpose is to raise capital or make acquisitions in the normal
course of business.

3. STOCK SPLITS. PIMCO may consider the following factors when voting on
stock splits: (i) the percentage increase in the number of shares with respect
to the issuer's existing authorized shares; and (ii) the industry that the
issuer is in and the issuer's performance in that industry.

4. REVERSED STOCK SPLITS. PIMCO may consider the following factors when
voting on reverse stock splits: (i) the percentage increase in the shares with
respect to the issuer's existing authorized stock; and (ii) issues related to
delisting the issuer's stock.

EXECUTIVE AND DIRECTOR COMPENSATION

1. STOCK OPTION PLANS. PIMCO may consider the following factors when voting
on stock option plans: (i) whether the stock option plan expressly permits the
repricing of options; (ii) whether the plan could result in earnings dilution
of greater than a specified percentage of shares outstanding; (iii) whether the
plan has an option exercise price below the market price on the day of the
grant; (iv) whether the proposal relates to an amendment to extend the term of
options for persons leaving the firm voluntarily or for cause; and (v) whether
the stock option plan has certain other embedded features.

2. DIRECTOR COMPENSATION. PIMCO may consider the following factors when
voting on director compensation: (i) whether director shares are at the same
market risk as those of the issuer's shareholders; and (ii) how stock option
programs for outside directors compare with the standards of internal stock
option programs.

3. GOLDEN AND TIN PARACHUTES. PIMCO may consider the following factors when
voting on golden and/or tin parachutes: (i) whether they will be submitted for
shareholder approval; and (ii) the employees covered by the plan and the
quality of management.

STATE OF INCORPORATION

STATE TAKEOVER STATUTES. PIMCO may consider the following factors when
voting on proposals to opt out of a state takeover statute: (i) the power the
statute vests with the issuer's board; (ii) the potential of the statute to
stifle bids; and (iii) the potential for the statute to empower the board to
negotiate a better deal for shareholders.

MERGERS AND RESTRUCTURINGS

1. MERGERS AND ACQUISITIONS. PIMCO may consider the following factors when
voting on a merger and/or acquisition: (i) anticipated financial and operating
benefits as a result of the merger or acquisition; (ii) offer price;
(iii) prospects of the combined companies; (iv) how the deal was negotiated;
and (v) changes in corporate governance and the potential impact on shareholder
rights. PIMCO may also consider what impact the merger or acquisition may have
on groups/organizations other than the issuer's shareholders.

2. CORPORATE RESTRUCTURINGS. With respect to a proxy proposal that includes
a spin-off, PIMCO may consider the tax and regulatory advantages, planned use
of sale proceeds, market focus, and managerial incentives. With respect to a
proxy proposal that includes an asset sale, PIMCO may consider the impact on
the balance sheet or working capital and the value received for the asset. With
respect to a proxy proposal that includes a liquidation, PIMCO may consider
management's efforts to pursue alternatives, the appraisal value of assets, and
the compensation plan for executives managing the liquidation.

INVESTMENT COMPANY PROXIES

For a client that is invested in an investment company, PIMCO votes each
proxy of the investment company on a case-by-case basis and takes all
reasonable steps to ensure that proxies are voted consistent with all
applicable investment policies of the client and in accordance with any
resolutions or other instructions approved by authorized persons of the client.

For a client that is invested in an investment company that is advised by
PIMCO or its affiliates, if there is a conflict of interest which may be
presented when voting for the client (E.G., a proposal to approve a contract
between PIMCO and the investment company), PIMCO will resolve the conflict by
doing any one of the following: (i) voting in accordance with the
instructions/consent of the client after providing notice of and disclosing the
conflict to that client; (ii) voting the proxy in accordance with the
recommendation of an independent third-party service provider; or
(iii) delegating the vote to an independent third-party service provider.

1. ELECTION OF DIRECTORS OR TRUSTEES. PIMCO may consider the following
factors when voting on the director or trustee nominees of a mutual fund:
(i) board structure, director independence and qualifications, and compensation
paid by the fund and the family of funds; (ii) availability and attendance at
board and committee meetings; (iii) investments made by the nominees in the
fund; and (iv) the fund's performance.

2. CONVERTING CLOSED-END FUND TO OPEN-END FUND. PIMCO may consider the
following factors when voting on converting a closed-end fund to an open-end
fund: (i) past performance as a closed-end fund; (ii) the market in which the
fund invests; (iii) measures taken by the board to address any discount of the
fund's shares; (iv) past shareholder activism; (v) board activity; and
(vi) votes on related proposals.

3. PROXY CONTESTS. PIMCO may consider the following factors related to a
proxy contest: (i) past performance of the fund; (ii) the market in which the
fund invests; (iii) measures taken by the board to address past shareholder
activism; (iv) board activity; and (v) votes on related proposals.

4. INVESTMENT ADVISORY AGREEMENTS. PIMCO may consider the following factors
related to approval of an investment advisory agreement: (i) proposed and
current fee arrangements/schedules; (ii) fund category/investment objective;
(iii) performance benchmarks; (iv) share price performance as compared with
peers; and (v) the magnitude of any fee increase and the reasons for such fee
increase.

5. POLICIES ESTABLISHED IN ACCORDANCE WITH THE 1940 ACT. PIMCO may consider
the following factors: (i) the extent to which the proposed changes
fundamentally alter the investment focus of the fund and comply with SEC
interpretation; (ii) potential competitiveness; (iii) regulatory developments;
and (iv) current and potential returns and risks.

6. CHANGING A FUNDAMENTAL RESTRICTION TO A NON-FUNDAMENTAL RESTRICTION.
PIMCO may consider the following when voting on a proposal to change a
fundamental restriction to a non-fundamental restriction: (i) reasons given by
the board and management for the change; and (ii) the projected impact of the
change on the fund's portfolio.

7. DISTRIBUTION AGREEMENTS. PIMCO may consider the following when voting on
a proposal to approve a distribution agreement: (i) fees charged to comparably
sized funds with similar investment objectives; (ii) the distributor's
reputation and past performance; and (iii) competitiveness of the fund among
other similar funds in the industry.

8. NAMES RULE PROPOSALS. PIMCO may consider the following factors when
voting on a proposal to change a fund name, consistent with Rule 35d-1 of the
1940 Act: (i) whether the fund invests a minimum of 80% of its assets in the
type of investments suggested by the proposed name; (ii) the political and
economic changes in the target market; and (iii) current asset composition.

9. DISPOSITION OF ASSETS/TERMINATION/LIQUIDATION. PIMCO may consider the
following when voting on a proposal to dispose of fund assets, terminate, or
liquidate the fund: (i) strategies employed to salvage the fund; (ii) the
fund's past performance; and (iii) the terms of the liquidation.

10. CHANGES TO CHARTER DOCUMENTS. PIMCO may consider the following when
voting on a proposal to change a fund's charter documents: (i) degree of change
implied by the proposal; (ii) efficiencies that could result; (iii) state of
incorporation; and (iv) regulatory standards and implications.

11. CHANGING THE DOMICILE OF A FUND. PIMCO may consider the following when
voting on a proposal to change the domicile of a fund: (i) regulations of both
states; (ii) required fundamental policies of both states; and (iii) the
increased flexibility available.

12. CHANGE IN FUND'S SUBCLASSIFICATION. PIMCO may consider the following
when voting on a change in a fund's subclassification from diversified to
non-diversified or to permit concentration in an industry: (i) potential
competitiveness; (ii) current and potential returns; (iii) risk of
concentration; and (iv) consolidation in the target industry.

DISTRESSED AND DEFAULTED SECURITIES

1. WAIVERS AND CONSENTS. PIMCO may consider the following when determining
whether to support a waiver or consent to changes in provisions of indentures
governing debt securities which are held on behalf of clients: (i) likelihood
that the granting of such waiver or consent will potentially increase recovery
to clients; (ii) potential for avoiding cross-defaults under other agreements;
and (iii) likelihood that deferral of default will give the obligor an
opportunity to improve its business operations.

2. VOTING ON CHAPTER 11 PLANS OF LIQUIDATION OR REORGANIZATION. PIMCO may
consider the following when determining whether to vote for or against a
Chapter 11 plan in a case pending with respect to an obligor under debt
securities which are held on behalf of clients: (i) other alternatives to the
proposed plan; (ii) whether clients are treated appropriately and in accordance
with applicable law with respect to their distributions; (iii) whether the vote
is likely to increase or decrease recoveries to clients.

MISCELLANEOUS PROVISIONS

1. SUCH OTHER BUSINESS. Proxy ballots sometimes contain a proposal granting
the board authority to "transact such other business as may properly come
before the meeting." PIMCO may consider the following factors when developing a
position on proxy ballots that contain a proposal granting the board authority
to "transact such other business as may properly come before the meeting":
(i) whether the board is limited in what actions it may legally take within
such authority; and (ii) PIMCO's responsibility to consider actions before
supporting them.

2. EQUAL ACCESS. PIMCO may consider the following factors when voting on
equal access: (i) the opportunity for significant company shareholders to
evaluate and propose voting recommendations on proxy proposals and director
nominees, and to nominate candidates to the board; and (ii) the added
complexity and burden of providing shareholders with access to proxy materials.

3. CHARITABLE CONTRIBUTIONS. PIMCO may consider the following factors when
voting on charitable contributions: (i) the potential benefits to shareholders;
and (ii) the potential impact on the issuer's resources that could have been
used to increase shareholder value.

4. SPECIAL INTEREST ISSUES. PIMCO may consider the following factors when
voting on special interest issues: (i) the long-term benefit to shareholders of
promoting corporate accountability and responsibility on social issues;
(ii) management's responsibility with respect to special interest issues;
(iii) any economic costs and restrictions on management; (iv) a client's
instruction to vote proxies in a specific manner and/or in a manner different
from these Policies and Procedures; and (v) the responsibility to vote proxies
for the greatest long-term shareholder value.

* * * * *

PACIFIC INVESTMENT MANAGEMENT COMPANY LLC

DESCRIPTION OF PROXY VOTING POLICIES AND PROCEDURES

Pacific Investment Management Company LLC ("PIMCO") has adopted written
proxy voting policies and procedures ("Proxy Policy") as required by Rule
206(4)-6 under the Investment Advisers Act of 1940, as amended. PIMCO has
implemented the Proxy Policy for each of its clients as required under
applicable law, unless expressly directed by a client in writing to refrain
from voting that client's proxies. Recognizing that proxy voting is a rare
event in the realm of fixed income investing and is typically limited to
solicitation of consent to changes in features of debt securities, the Proxy
Policy also applies to any voting rights and/or consent rights of PIMCO, on
behalf of its clients, with respect to debt securities, including but not
limited to, plans of reorganization, and waivers and consents under applicable
indentures.

The Proxy Policy is designed and implemented in a manner reasonably expected
to ensure that voting and consent rights are exercised in the best interests of
PIMCO's clients. Each proxy is voted on a case-by-case basis taking into
consideration any relevant contractual obligations as well as other relevant
facts and circumstances at the time of the vote. In general, PIMCO reviews and
considers corporate governance issues related to proxy matters and generally
supports proposals that foster good corporate governance practices. PIMCO may
vote proxies as recommended by management on routine matters related to the
operation of the issuer and on matters not expected to have a significant
economic impact on the issuer and/or its shareholders.

PIMCO will supervise and periodically review its proxy voting activities and
implementation of the Proxy Policy. PIMCO will review each proxy to determine
whether there may be a material conflict between PIMCO and its client. If no
conflict exists, the proxy will be forwarded to the appropriate portfolio
manager for consideration. If a conflict does exist, PIMCO will seek to resolve
any such conflict in accordance with the Proxy Policy. PIMCO seeks to resolve
any material conflicts of interest by voting in good faith in the best interest
of its clients. If a material conflict of interest should arise, PIMCO will
seek to resolve such conflict in the client's best interest by pursuing any one
of the following courses of action: (i) convening a committee to assess and
resolve the conflict; (ii) voting in accordance with the instructions of the
client; (iii) voting in accordance with the recommendation of an independent
third-party service provider; (iv) suggesting that the client engage another
party to determine how the proxy should be voted; (v) delegating the vote to a
third-party service provider; or (vi) voting in accordance with the factors
discussed in the Proxy Policy.

Clients may obtain a copy of PIMCO's written Proxy Policy and the factors
that PIMCO may consider in determining how to vote a client's proxy. Except as
required by law, PIMCO will not disclose to third parties how it voted on
behalf of a client. However, upon request from an appropriately authorized
individual, PIMCO will disclose to its clients or the entity delegating the
voting authority to PIMCO for such clients, how PIMCO voted such client's
proxy. In addition, a client may obtain copies of PIMCO's Proxy Policy and
information as to how its proxies have been voted by contacting PIMCO.

PROXY VOTING POLICIES AND PROCEDURES OF PIONEER INVESTMENT MANAGEMENT, INC.

VERSION DATED JULY, 2004

OVERVIEW

Pioneer Investment Management, Inc. ("Pioneer") is a fiduciary that owes
each of its client's duties of care and loyalty with respect to all services
undertaken on the client's behalf, including proxy voting. When Pioneer has
been delegated proxy-voting authority for a client, the duty of care requires
Pioneer to monitor corporate events and to vote the proxies. To satisfy its
duty of loyalty, Pioneer must place its client's interests ahead of its own and
must cast proxy votes in a manner consistent with the best interest of its
clients. Pioneer will vote all proxies presented in a timely manner.

The Proxy Voting Policies and Procedures are designed to complement
Pioneer's investment policies and procedures regarding its general
responsibility to monitor the performance and/or corporate events of companies
that are issuers of securities held in accounts managed by Pioneer. Pioneer's
Proxy Voting Policies summarize Pioneer's position on a number of issues
solicited by companies held by Pioneer's clients. The policies are guidelines
that provide a general indication on how Pioneer would vote but do not include
all potential voting scenarios.

Pioneer's Proxy Voting Procedures detail monitoring of voting, exception
votes, and review of conflicts of interest and ensure that case-by-case votes
are handled within the context of the overall guidelines (i.e. best interest of
client). The overriding goal is that all proxies for US and non-US companies
that are received promptly will be voted in accordance with Pioneer's policies
or specific client instructions. All shares in a company held by
Pioneer-managed accounts will be voted alike, unless a client has given us
specific voting instructions on an issue or has not delegated authority to us
or the Proxy Voting Oversight Group determines that the circumstances justify a
different approach.

Pioneer does not delegate the authority to vote proxies relating to its
clients to any of its affiliates, which include other subsidiaries of
UniCredito.

ANY QUESTIONS ABOUT THESE POLICIES AND PROCEDURES SHOULD BE DIRECTED TO THE
PROXY COORDINATOR.

PROXY VOTING PROCEDURES

PROXY VOTING SERVICE

Pioneer has engaged an independent proxy voting service to assist in the
voting of proxies. The proxy voting service works with custodians to ensure
that all proxy materials are received by the custodians and are processed in a
timely fashion. To the extent applicable, the proxy voting service votes all
proxies in accordance with the proxy voting policies established by Pioneer.
The proxy voting service will refer proxy questions to the Proxy Coordinator
(described below) for instructions under circumstances where: (1) the
application of the proxy voting guidelines is unclear; (2) a particular proxy
question is not covered by the guidelines; or (3) the guidelines call for
specific instructions on a case-by-case basis. The proxy voting service is also
requested to call to the Proxy Coordinator's attention specific proxy questions
that, while governed by a guideline, appear to involve unusual or controversial
issues. Pioneer reserves the right to attend a meeting in person and may do so
when it determines that the company or the matters to be voted on at the
meeting are strategically important to its clients.

PROXY COORDINATOR

Pioneer's Director of Investment Operations (the "Proxy Coordinator")
coordinates the voting, procedures and reporting of proxies on behalf of
Pioneer's clients. The Proxy Coordinator will deal directly with the proxy

voting service and, in the case of proxy questions referred by the proxy voting
service, will solicit voting recommendations and instructions from the Director
of Portfolio Management US or, to the extent applicable, investment
sub-advisers. The Proxy Coordinator is responsible for ensuring that these
questions and referrals are responded to in a timely fashion and for
transmitting appropriate voting instructions to the proxy voting service. The
Proxy Coordinator is responsible for verifying with the Compliance Department
whether Pioneer's voting power is subject to any limitations or guidelines
issued by the client (or in the case of an employee benefit plan, the plan's
trustee or other fiduciaries).

REFERRAL ITEMS

From time to time, the proxy voting service will refer proxy questions to
the Proxy Coordinator that are described by Pioneer's policy as to be voted on
a case-by-case basis, that are not covered by Pioneer's guidelines or where
Pioneer's guidelines may be unclear with respect to the matter to be voted on.
Under such certain circumstances, the Proxy Coordinator will seek a written
voting recommendation from the Director of Portfolio Management US. Any such
recommendation will include: (i) the manner in which the proxies should be
voted; (ii) the rationale underlying any such decision; and (iii) the
disclosure of any contacts or communications made between Pioneer and any
outside parties concerning the proxy proposal prior to the time that the voting
instructions are provided. In addition, the Proxy Coordinator will ask the
Compliance Department to review the question for any actual or apparent
conflicts of interest as described below under "Conflicts of Interest." The
Compliance Department will provide a "Conflicts of Interest Report," applying
the criteria set forth below under "Conflicts of Interest," to the Proxy
Coordinator summarizing the results of its review. In the absence of a conflict
of interest, the Proxy Coordinator will vote in accordance with the
recommendation of the Director of Portfolio Management US.

If the matter presents a conflict of interest for Pioneer, then the Proxy
Coordinator will refer the matter to the Proxy Voting Oversight Group for a
decision. In general, when a conflict of interest is present, Pioneer will vote
according to the recommendation of the Director of Portfolio Management US
where such recommendation would go against Pioneer's interest or where the
conflict is deemed to be immaterial. Pioneer will vote according to the
recommendation of its proxy voting service when the conflict is deemed to be
material and the Pioneer's internal vote recommendation would favor Pioneer's
interest, unless a client specifically requests Pioneer to do otherwise. When
making the final determination as to how to vote a proxy, the Proxy Voting
Oversight Group will review the report from the Director of Portfolio
Management US and the Conflicts of Interest Report issued by the Compliance
Department.

CONFLICTS OF INTEREST

A conflict of interest occurs when Pioneer's interests interfere, or appear
to interfere with the interests of Pioneer's clients. Occasionally, Pioneer may
have a conflict that can affect how its votes proxies. The conflict may be
actual or perceived and may exist when the matter to be voted on concerns:

. An affiliate of Pioneer, such as another company belonging to the
UniCredito Italiano S.p.A. banking group (a "UniCredito Affiliate");

. An issuer of a security for which Pioneer acts as a sponsor, advisor,
manager, custodian, distributor, underwriter, broker, or other similar
capacity (including those securities specifically declared by PGAM to
present a conflict of interest for Pioneer);

. An issuer of a security for which UniCredito has informed Pioneer that a
UniCredito Affiliate acts as a sponsor, advisor, manager, custodian,
distributor, underwriter, broker, or other similar capacity; or

. A person with whom Pioneer (or any of its affiliates) has an existing,
material contract or business relationship that was not entered into in
the ordinary course of Pioneer's business.

. Pioneer will abstain from voting with respect to companies directly or
indirectly owned by UniCredito Italiano Group, unless otherwise directed
by a client. In addition, Pioneer will inform PGAM Global Compliance and
the PGAM Independent Directors before exercising such rights.

Any associate involved in the proxy voting process with knowledge of any
apparent or actual conflict of interest must disclose such conflict to the
Proxy Coordinator and the Compliance Department. The Compliance Department will
review each item referred to Pioneer to determine whether an actual or
potential conflict of interest with Pioneer exists in connection with the
proposal(s) to be voted upon. The review will be conducted by comparing the
apparent parties affected by the proxy proposal being voted upon against the
Compliance Department's internal list of interested persons and, for any
matches found, evaluating the anticipated magnitude and possible probability of
any conflict of interest being present. For each referral item, the
determination regarding the presence or absence of any actual or potential
conflict of interest will be documented in a Conflicts of Interest Report to
the Proxy Coordinator.

SECURITIES LENDING

In conjunction with industry standards Proxies are not available to be voted
when the shares are out on loan through either Pioneer's lending program or a
client's managed security lending program. However, Pioneer will reserve the
right to recall lent securities so that they may be voted according to the
Pioneer's instructions. If a portfolio manager would like to vote a block of
previously lent shares, the Proxy Coordinator will work with the portfolio
manager and Investment Operations to recall the security, to the extent
possible, to facilitate the vote on the entire block of shares.

SHARE-BLOCKING

"Share-blocking" is a market practice whereby shares are sent to a custodian
(which may be different than the account custodian) for record keeping and
voting at the general meeting. The shares are unavailable for sale or delivery
until the end of the blocking period (typically the day after general meeting
date).

Pioneer will vote in those countries with "share-blocking." In the event a
manager would like to sell a security with "share-blocking", the Proxy
Coordinator will work with the Portfolio Manager and Investment Operations
Department to recall the shares (as allowable within the market time-frame and
practices) and/or communicate with executing brokerage firm. A list of
countries with "share-blocking" is available from the Investment Operations
Department upon request.

RECORD KEEPING

The Proxy Coordinator shall ensure that Pioneer's proxy voting service:

. Retains a copy of the proxy statement received (unless the proxy
statement is available from the SEC's Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system);

. Retains a record of the vote cast;

. Prepares Form N-PX for filing on behalf of each client that is a
registered investment company; and

. Is able to promptly provide Pioneer with a copy of the voting record
upon its request.

The Proxy Coordinator shall ensure that for those votes that may require
additional documentation (i.e. conflicts of interest, exception votes and
case-by-case votes) the following records are maintained:

. A record memorializing the basis for each referral vote cast;

. A copy of any document created by Pioneer that was material in making
the decision on how to vote the subject proxy; and

. A copy of any conflict notice, conflict consent or any other written
communication (including emails or other electronic communications) to
or from the client (or in the case of an employee benefit plan, the
plan's trustee or other fiduciaries) regarding the subject proxy vote
cast by, or the vote recommendation of, Pioneer.

Pioneer shall maintain the above records in the client's file for a period
not less than ten (10) years.

DISCLOSURE

Pioneer shall take reasonable measures to inform its clients of the process
or procedures clients must follow to obtain information regarding how Pioneer
voted with respect to assets held in their accounts. In addition, Pioneer shall
describe to clients its proxy voting policies and procedures and will furnish a
copy of its proxy voting policies and procedures upon request. This information
may be provided to clients through Pioneer's Form ADV (Part II) disclosure, by
separate notice to the client, or through Pioneer's website.

PROXY VOTING OVERSIGHT GROUP

The members of the Proxy Voting Oversight Group are Pioneer's: Director of
Portfolio Management US, Head of Investment Operations, and Director of
Compliance. Other members of Pioneer will be invited to attend meetings and
otherwise participate as necessary. The Head of Investment Operations will
chair the Proxy Voting Oversight Group.

The Proxy Voting Oversight Group is responsible for developing, evaluating,
and changing (when necessary) Pioneer's Proxy Voting Policies and Procedures.
The group meets at least annually to evaluate and review these policies and
procedures and the services of its third-party proxy voting service. In
addition, the Proxy Voting Oversight Group will meet as necessary to vote on
referral items and address other business as necessary.

AMENDMENTS

Pioneer may not amend its Proxy Voting Policies And Procedures without the
prior approval of the Proxy Voting Oversight Group and its corporate parent,
Pioneer Global Asset Management S.p.A

PROXY VOTING POLICIES

Pioneer's sole concern in voting proxies is the economic effect of the
proposal on the value of portfolio holdings, considering both the short- and
long-term impact. In many instances, Pioneer believes that supporting the
company's strategy and voting "for" management's proposals builds portfolio
value. In other cases, however, proposals set forth by management may have a
negative effect on that value, while some shareholder proposals may hold the
best prospects for enhancing it. Pioneer monitors developments in the
proxy-voting arena and will revise this policy as needed.

All proxies that are received promptly will be voted in accordance with the
specific policies listed below. All shares in a company held by Pioneer-managed
accounts will be voted alike, unless a client has given us specific voting
instructions on an issue or has not delegated authority to us. Proxy voting
issues will be reviewed by Pioneer's Proxy Voting Oversight Group, which
consists of the Director of Portfolio Management US, the Director of Investment
Operations (the Proxy Coordinator), and the Director of Compliance.

Pioneer has established Proxy Voting Procedures for identifying and
reviewing conflicts of interest that may arise in the voting of proxies.

Clients may request, at any time, a report on proxy votes for securities
held in their portfolios and Pioneer is happy to discuss our proxy votes with
company management. Pioneer retains a proxy voting service to provide research
on proxy issues and to process proxy votes.

ADMINISTRATIVE

While administrative items appear infrequently in U.S. issuer proxies, they
are quite common in non-U.S. proxies.

We will generally support these and similar management proposals:

. Corporate name change.

. A change of corporate headquarters.

. Stock exchange listing.

. Establishment of time and place of annual meeting.

. Adjournment or postponement of annual meeting.

. Acceptance/approval of financial statements.

. Approval of dividend payments, dividend reinvestment plans and other
dividend-related proposals.

. Approval of minutes and other formalities.

. Authorization of the transferring of reserves and allocation of income.

. Amendments to authorized signatories.

. Approval of accounting method changes or change in fiscal year-end.

. Acceptance of labor agreements.

. Appointment of internal auditors.

Pioneer will vote on a case-by-case basis on other routine business;
however, Pioneer will oppose any routine business proposal if insufficient
information is presented in advance to allow Pioneer to judge the merit of the
proposal. Pioneer has also instructed its proxy voting service to inform
Pioneer of its analysis of any administrative items inconsistent, in its view,
with supporting the value of Pioneer portfolio holdings so that Pioneer may
consider and vote on those items on a case-by-case basis.

AUDITORS

We normally vote for proposals to:

. Ratify the auditors. We will consider a vote against if we are concerned
about the auditors' independence or their past work for the company.
Specifically, we will oppose the ratification of auditors and withhold
votes from audit committee members if non-audit fees paid by the company
to the auditing firm exceed the sum of audit fees plus audit-related
fees plus permissible tax fees according to the disclosure categories
proposed by the Securities and Exchange Commission.

. Restore shareholder rights to ratify the auditors.

We will normally oppose proposals that require companies to:

. Seek bids from other auditors.

. Rotate auditing firms, except where the rotation is statutorily required
or where rotation would demonstrably strengthen financial disclosure.

. Indemnify auditors.

. Prohibit auditors from engaging in non-audit services for the company.

BOARD OF DIRECTORS

On issues related to the board of directors, Pioneer normally supports
management. We will, however, consider a vote against management in instances
where corporate performance has been very poor or where the board appears to
lack independence.

GENERAL BOARD ISSUES

Pioneer will vote for:

. Audit, compensation and nominating committees composed of independent
directors exclusively.

. Indemnification for directors for actions taken in good faith in
accordance with the business judgment rule. We will vote against
proposals for broader indemnification.

. Changes in board size that appear to have a legitimate business purpose
and are not primarily for anti-takeover reasons.

. Election of an honorary director.

We will vote against:

. Minimum stock ownership by directors.

. Term limits for directors. Companies benefit from experienced directors,
and shareholder control is better achieved through annual votes.

. Requirements for union or special interest representation on the board.

. Requirements to provide two candidates for each board seat.

We will vote on a case-by case basis on these issues:

. Separate chairman and CEO positions. We will consider voting with
shareholders on these issues in cases of poor corporate performance.

ELECTIONS OF DIRECTORS

In uncontested elections of directors we will vote against:

. Individual directors with absenteeism above 25% without valid reason. We
support proposals that require disclosure of director attendance.

. Insider directors and affiliated outsiders who sit on the audit,
compensation, stock option or nominating committees. For the purposes of
our policy, we accept the definition of affiliated directors provided by
our proxy voting service.

We will also vote against:

. Directors who have failed to act on a takeover offer where the majority
of shareholders have tendered their shares.

. Directors who appear to lack independence or are associated with very
poor corporate performance.

We will vote on a case-by case basis on these issues:

. Re-election of directors who have implemented or renewed a dead-hand or
modified dead-hand poison pill (a "dead-hand poison pill" is a
shareholder rights plan that may be altered only by incumbent or "dead "
directors. These plans prevent a potential acquirer from disabling a
poison pill by obtaining control of the board through a proxy vote).

. Contested election of directors.

. Prior to phase-in required by SEC, we would consider supporting election
of a majority of independent directors in cases of poor performance.

. Mandatory retirement policies.

. Directors who have ignored a shareholder proposal that has been approved
by shareholders for two consecutive years.

TAKEOVER-RELATED MEASURES

Pioneer is generally opposed to proposals that may discourage takeover
attempts. We believe that the potential for a takeover helps ensure that
corporate performance remains high. Pioneer will vote for:

. Cumulative voting.

. Increase ability for shareholders to call special meetings.

. Increase ability for shareholders to act by written consent.

. Restrictions on the ability to make greenmail payments.

. Submitting rights plans to shareholder vote.

. Rescinding shareholder rights plans ("poison pills").

. Opting out of the following state takeover statutes:

. Control share acquisition statutes, which deny large holders voting
rights on holdings over a specified threshold.

. Control share cash-out provisions, which require large holders to
acquire shares from other holders.

. Freeze-out provisions, which impose a waiting period on large holders
before they can attempt to gain control.

. Stakeholder laws, which permit directors to consider interests of
non-shareholder constituencies.

. Disgorgement provisions, which require acquirers to disgorge profits on
purchases made before gaining control.

. Fair price provisions.

. Authorization of shareholder rights plans.

. Labor protection provisions.

. Mandatory classified boards.

We will vote on a case-by-case basis on the following issues:

. Fair price provisions. We will vote against provisions requiring
supermajority votes to approve takeovers. We will also consider voting
against proposals that require a supermajority vote to repeal or amend
the provision. Finally, we will consider the mechanism used to determine
the fair price; we are generally opposed to complicated formulas or
requirements to pay a premium.

. Opting out of state takeover statutes regarding fair price provisions.
We will use the criteria used for fair price provisions in general to
determine our vote on this issue.

. Proposals that allow shareholders to nominate directors.

We will vote against:

. Classified boards, except in the case of closed-end mutual funds.

. Limiting shareholder ability to remove or appoint directors. We will
support proposals to restore shareholder authority in this area. We will
review on a case-by-case basis proposals that authorize the board to
make interim appointments.

. Classes of shares with unequal voting rights.

. Supermajority vote requirements.

. Severance packages ("golden" and "tin" parachutes). We will support
proposals to put these packages to shareholder vote.

. Reimbursement of dissident proxy solicitation expenses. While we
ordinarily support measures that encourage takeover bids, we believe
that management should have full control over corporate funds.

. Extension of advance notice requirements for shareholder proposals.

. Granting board authority normally retained by shareholders (e.g., amend
charter, set board size).

. Shareholder rights plans ("poison pills"). These plans generally allow
shareholders to buy additional shares at a below-market price in the
event of a change in control and may deter some bids.

CAPITAL STRUCTURE

Managements need considerable flexibility in determining the company's
financial structure, and Pioneer normally supports managements' proposals in
this area. We will, however, reject proposals that impose high barriers to
potential takeovers.

Pioneer will vote for:

. Changes in par value.

. Reverse splits, if accompanied by a reduction in number of shares.

. Share repurchase programs, if all shareholders may participate on equal
terms.

. Bond issuance.

. Increases in "ordinary" preferred stock.

. Proposals to have blank-check common stock placements (other than shares
issued in the normal course of business) submitted for shareholder
approval.

. Cancellation of company treasury shares.

We will vote on a case-by-case basis on the following issues:

. Reverse splits not accompanied by a reduction in number of shares,
considering the risk of delisting.

. Increase in authorized common stock. We will make a determination
considering, among other factors:

. Number of shares currently available for issuance;

. Size of requested increase (we would normally approve increases of up to
100% of current authorization);

. Proposed use of the additional shares; and

. Potential consequences of a failure to increase the number of shares
outstanding (e.g., delisting or bankruptcy).

. Blank-check preferred. We will normally oppose issuance of a new class
of blank-check preferred, but may approve an increase in a class already
outstanding if the company has demonstrated that it uses this
flexibility appropriately.

. Proposals to submit private placements to shareholder vote.

. Other financing plans.

We will vote against preemptive rights that we believe limit a company's
financing flexibility.

COMPENSATION

Pioneer supports compensation plans that link pay to shareholder returns and
believes that management has the best understanding of the level of
compensation needed to attract and retain qualified people. At the same time,
stock-related compensation plans have a significant economic impact and a
direct effect on the balance sheet. Therefore, while we do not want to
micromanage a company's compensation programs, we will place limits on the
potential dilution these plans may impose.

Pioneer will vote for:

. 401(k) benefit plans.

. Employee stock ownership plans (ESOPs), as long as shares allocated to
ESOPs are less than 5% of outstanding shares. Larger blocks of stock in
ESOPs can serve as a takeover defense. We will support proposals to
submit ESOPs to shareholder vote.

. Various issues related to the Omnibus Budget and Reconciliation Act of
1993 (OBRA), including:

. Amendments to performance plans to conform with OBRA;

. Caps on annual grants or amendments of administrative features;

. Adding performance goals; and

. Cash or cash-and-stock bonus plans.

. Establish a process to link pay, including stock-option grants, to
performance, leaving specifics of implementation to the company.

. Require that option repricings be submitted to shareholders.

. Require the expensing of stock-option awards.

. Require reporting of executive retirement benefits (deferred
compensation, split-dollar life insurance, SERPs, and pension benefits).

. Employee stock purchase plans where the purchase price is equal to at
least 85% of the market price, where the offering period is no greater
than 27 months and where potential dilution (as defined below) is no
greater than 10%.

We will vote on a case-by-case basis on the following issues:

. Executive and director stock-related compensation plans. We will
consider the following factors when reviewing these plans:

. The program must be of a reasonable size. We will approve plans where
the combined employee and director plans together would generate less
than 15% dilution. We will reject plans with 15% or more potential
dilution.

Dilution = (A + B + C) / (A + B + C + D), where
A = Shares reserved for plan/amendment,
B = Shares available under continuing plans,
C = Shares granted but unexercised and
D = Shares outstanding.

. The plan must not:

. Explicitly permit unlimited option repricing authority or that have
repriced in the past without shareholder approval.

. Be a self-replenishing "evergreen" plan, plans that grant discount
options and tax offset payments.

. We are generally in favor of proposals that increase participation
beyond executives.

. We generally support proposals asking companies to adopt rigorous
vesting provisions for stock option plans such as those that vest
incrementally over, at least, a three- or four-year period with a pro
rata portion of the shares becoming exercisable on an annual basis
following grant date.

. We generally support proposals asking companies to disclose their window
period policies for stock transactions. Window period policies ensure
that employees do not exercise options based on insider information
contemporaneous with quarterly earnings releases and other material
corporate announcements.

. We generally support proposals asking companies to adopt stock holding
periods for their executives.

. All other employee stock purchase plans.

. All other compensation-related proposals, including deferred
compensation plans, employment agreements, loan guarantee programs and
retirement plans.

. All other proposals regarding stock compensation plans, including
extending the life of a plan, changing vesting restrictions, repricing
options, lengthening exercise periods or accelerating distribution of
awards and pyramiding and cashless exercise programs.

We will vote against:

. Pensions for non-employee directors. We believe these retirement plans
reduce director objectivity.

. Elimination of stock option plans.

We will vote on a case-by case basis on these issues:

. Limits on executive and director pay.

. Stock in lieu of cash compensation for directors.

CORPORATE GOVERNANCE

Pioneer will vote for:

. Confidential Voting.

. Equal access provisions, which allow shareholders to contribute their
opinion to proxy materials.

. Proposals requiring directors to disclose their ownership of shares in
the company.

We will vote on a case-by-case basis on the following issues:

. Change in the state of incorporation. We will support reincorporations
supported by valid business reasons. We will oppose those that appear to
be solely for the purpose of strengthening takeover defenses.

. Bundled proposals. We will evaluate the overall impact of the proposal.

. Adopting or amending the charter, bylaws or articles of association.

. Shareholder appraisal rights, which allow shareholders to demand
judicial review of an acquisition price.

We will vote against:

. Shareholder advisory committees. While management should solicit
shareholder input, we prefer to leave the method of doing so to
management's discretion.

. Limitations on stock ownership or voting rights.

. Reduction in share ownership disclosure guidelines.

MERGERS AND RESTRUCTURINGS

Pioneer will vote on the following and similar issues on a case-by-case
basis:

. Mergers and acquisitions.

. Corporate restructurings, including spin-offs, liquidations, asset
sales, joint ventures, conversions to holding company and conversions to
self-managed REIT structure.

. Debt restructurings.

. Conversion of securities.

. Issuance of shares to facilitate a merger.

. Private placements, warrants, convertible debentures.

. Proposals requiring management to inform shareholders of merger
opportunities.

We will normally vote against shareholder proposals requiring that the
company be put up for sale.

MUTUAL FUNDS

Many of our portfolios may invest in shares of closed-end mutual funds or
exchange-traded funds. The non-corporate structure of these investments raises
several unique proxy voting issues.

Pioneer will vote for:

. Establishment of new classes or series of shares.

. Establishment of a master-feeder structure.

Pioneer will vote on a case-by-case on:

. Changes in investment policy. We will normally support changes that do
not affect the investment objective or overall risk level of the fund.
We will examine more fundamental changes on a case-by-case basis.

. Approval of new or amended advisory contracts.

. Changes from closed-end to open-end format.

. Authorization for, or increase in, preferred shares.

. Disposition of assets, termination, liquidation, or mergers.

. Classified boards of closed-end mutual funds, but will typically support
such proposals.

SOCIAL ISSUES

Pioneer will abstain on stockholder proposals calling for greater disclosure
of corporate activities with regard to social issues. "Social Issues" may
generally be described as shareholder proposals for a company to:

. Conduct studies regarding certain issues of public concern and interest;

. Study the feasibility of the company taking certain actions with regard
to such issues; or

. Take specific action, including ceasing certain behavior and adopting
company standards and principles, in relation to issues of public
concern and interest.

We believe these issues are important and should receive management
attention. Pioneer will vote against proposals calling for substantial changes
in the company's business or activities. We will also normally vote against
proposals with regard to contributions, believing that management should
control the routine disbursement of funds.

RAINIER INVESTMENT MANAGEMENT, INC.

2008 PROXY VOTING POLICY

SUMMARY & PROCEDURES

INTRODUCTION
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This statement sets forth the proxy voting policy of Rainier Investment
Management, Inc.(R) ("RIM") and is intended to be in compliance with 17 CFR
270. 30b1-4 and 17 CFR 275.206(4)-6, rules relating to the voting of proxies by
registered investment advisers and investment companies registered under
Investment Company Act of 1940.

RIM clients include mutual funds, employee benefit plans, corporations,
charitable organizations and individuals. As an investment adviser, RIM is a
fiduciary that owes each of its clients duties of care and loyalty with respect
to all services undertaken on the client's behalf, including proxy voting. The
duty of care requires RIM, when it has proxy voting authority, to monitor
corporate events and to vote the proxies. To satisfy its duty of loyalty, RIM
will cast the proxy votes in a manner consistent with the best interest of its
clients and will not subrogate client interests to its own.

RIM is the Adviser of the Rainier Investment Management Mutual Funds
("Funds"). RIM acts as a fiduciary of the Funds and shall vote the proxies of
the Funds' portfolio securities in a manner consistent with the best interest
of the Funds and its shareholders.

RIM shall analyze each proxy on a case-by-case basis, informed by the
guidelines elaborated below, subject to the requirement that all votes shall be
cast solely in the long-term interest of its clients. RIM does not intend for
these guidelines to be exhaustive. Hundreds of issues appear on proxy ballots
every year, and it is neither practical nor productive to fashion voting
guidelines and policies which attempt to address every eventuality. Rather,
RIM's guidelines are intended to cover the most significant and frequent proxy
issues that arise. RIM shall revise its guidelines as events warrant.

PROCEDURES
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PROCEDURES USED TO ADDRESS ANY POTENTIAL CONFLICTS OF INTEREST.

RIM votes on a pre-established set of policy guidelines and on the
recommendations of an independent third party, Institutional Shareholder
Services (ISS). ISS makes its recommendations based on its independent,
objective analysis of the economic interests of shareholders. This process
ensures that RIM votes in the best interests of advisory clients and mutual
fund shareholders, and it insulates our voting decisions from any potential
conflicts of interest. Subject to RIM Proxy Policy Committee procedures, RIM
may also override ISS vote recommendations on a case-by case basis on:

. Issues called out by other established proxy voting guidelines, such as
the AFL-CIO Proxy Voting Guidelines

. Issues that ISS itself considers on a case-by-case basis

THE EXTENT TO WHICH RIM DELEGATES PROXY VOTING AUTHORITY TO OR RELIES ON
RECOMMENDATIONS OF A THIRD PARTY.

As noted above, RIM relies on the recommendations of ISS. We retain ultimate
responsibility for the votes, and we have the ability to override ISS vote
recommendations. We will only do so, however, if we believe that a different
vote is in the best interests of our clients and mutual fund shareholders.

To the extent RIM desires to override ISS's vote recommendations for the
reasons noted above, RIM (through its Proxy Policy Committee) will consider
whether the proxy voting decision poses a material conflict between RIM's
interest and that of the relevant clients. If RIM determines that a proxy
proposal raises a material conflict between RIM's interests and a client's
interest, RIM will resolve such a conflict in the manner described below, in
its discretion:

(i) RIM may follow the recommendation of another nationally recognized
third-party proxy advisory service, and document RIM's reasons for
overriding ISS and vote in accordance with the recommendation of the other
third party;

(ii) RIM may decide independently how to vote the proxies notwithstanding
its material conflict of interest, provided it carefully and fully documents
its reasons for voting in the manner proposed;

(iii) RIM may, in its discretion, disclose the conflict to each affected
client and vote as directed by the client, if RIM receives a timely response
from the client (and RIM may abstain from voting in the absence of a timely
client response);

(iv) RIM may erect information barriers around the person or persons
making the voting decision sufficient to insulate the decision from the
conflict;

(v) RIM may abstain from voting on the proposal, if (a) RIM determines
that an abstention is in the best interest of the affected clients as a
whole, (b) the expected benefit to the affected clients as a whole of voting
the proxy exceeds the costs of voting the proxy, (c) RIM concludes that the
value of the affected clients' economic interest as a whole in the proposal
or the value of the portfolio holding is insignificant, or (d) RIM has not
received a timely response from the client; or

(vi) RIM may implement any other procedure that results in a decision
that is demonstrably based on the client's best interest and not the product
of the conflict.

THE EXTENT TO WHICH RIM WILL SUPPORT OR GIVE WEIGHT TO THE VIEWS OF MANAGEMENT
OF A PORTFOLIO COMPANY.

We base our voting decisions on our policy guidelines and on ISS
recommendations, both of which are driven by considerations of the best
interests of our clients and mutual fund shareholders. We vote in favor of
management positions only when they coincide with the best interests of our
clients and mutual fund shareholders.

POLICIES AND PROCEDURES RELATING TO MATTERS SUBSTANTIALLY AFFECTING THE RIGHTS
OF THE HOLDERS OF THE SECURITY BEING VOTED.

Our policy guidelines include a section devoted specifically to shareholder
rights. We generally support shareholder voting rights and oppose efforts to
restrict them.

DISCLOSURE TO CLIENTS.

RIM will disclose to its clients how they may obtain information from RIM
about how RIM voted with respect to their securities. RIM will provide to its
clients a description or a copy of these proxy voting policies and procedures.

BOOKS AND RECORDS MAINTAINED BY RIM.

In connection with voting proxies and these Proxy Voting Policies and
Procedures, RIM maintains (in hardcopy or electronic form) such books and
records as may be required by applicable law, rules or regulations, including:

. RIM's policies and procedures relating to voting proxies;

. A copy of each proxy statement that RIM receives regarding clients'
securities, provided that RIM may rely on (a) a third party to make and
retain, on RIM's behalf, pursuant to a written undertaking, a copy of
proxy statements or (b) obtaining a copy of proxy statements from the
SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system;

. A record of each vote cast by RIM on behalf of clients, provided that
RIM may rely on a third party to make and retain, on RIM's behalf,
pursuant to a written undertaking, records of votes cast;

. Copies of any documents created by RIM that were material to making a
decision on how to vote proxies on behalf of a client or that
memorialize the basis for that decision; and

. A record of each written client request for proxy voting information and
a copy of any written response by RIM to any written or oral client
request for information on how RIM voted proxies on behalf of the
requesting client.

Such books and records will be maintained and preserved in an easily
accessible place for a period of not less than five years from the end of the
fiscal year during which the last entry was made on such record, the first two
years in RIM's main business office.

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2008 U.S. PROXY VOTING GUIDELINES SUMMARY

ISS GOVERNANCE SERVICES

DECEMBER 17, 2007

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ISS GOVERANCE SERVICES
2008 U.S. PROXY VOTING GUIDELINES SUMMARY

EFFECTIVE FOR MEETINGS ON OR AFTER FEB 1, 2008
UPDATED DEC 17, 2007

The following is a condensed version of the proxy voting recommendations
contained in the ISS Governance Services ("155") Proxy Voting Manual.

TABLE OF CONTENTS

1. OPERATIONAL ITEMS.............................................................................. 7
Adjourn Meeting................................................................................ 7
Amend Quorum Requirements...................................................................... 7
Amend Minor Bylaws............................................................................. 7
Auditor Indemnification and Limitation of Liability............................................ 7
Auditor Ratification........................................................................... 7
Change Company Name............................................................................ 8
Change Date, Time, or Location of Annual Meeting............................................... 8
Transact Other Business........................................................................ 8

2. BOARD OF DIRECTORS............................................................................. 9
Voting on Director Nominees in Uncontested Elections........................................... 9
2008 Classification of Directors............................................................... 11
Age Limits..................................................................................... 13
Board Size..................................................................................... 13
Classification/Declassification of the Board................................................... 13
Cumulative Voting.............................................................................. 13
Director and Officer Indemnification and Liability Protection.................................. 13
Establish/Amend Nominee Qualifications......................................................... 14
Filling Vacancies/Removal of Directors......................................................... 14
Independent Chair (Separate Chair/CEO)......................................................... 14
Majority of Independent Directors/Establishment of Committees.................................. 15
Majority Vote Shareholder Proposals............................................................ 16
Office of the Board............................................................................ 16
Open Access.................................................................................... 16
Performance Test for Directors................................................................. 16
Stock Ownership Requirements................................................................... 17
Term Limits.................................................................................... 18

3. PROXY CONTESTS................................................................................. 19
Voting for Director Nominees in Contested Elections............................................ 19
Reimbursing Proxy Solicitation Expenses........................................................ 19
Confidential Voting............................................................................ 19

4. ANTITAKEOVER DEFENSES AND VOTING RELATED ISSUES................................................ 20
Advance Notice Requirements for Shareholder Proposals/Nominations.............................. 20
Amend Bylaws without Shareholder Consent....................................................... 20

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2008 US Proxy Voting Guidelines Summary

Poison Pills............................................................................... 20
Shareholder Ability to Act by Written Consent.............................................. 20
Shareholder Ability to Call Special Meetings............................................... 21
Supermajority Vote Requirements............................................................ 21

5. MERGERS AND CORPORATE RESTRUCTURINGS....................................................... 22
OVERALL APPROACH............................................................................. 22
Appraisal Rights........................................................................... 22
Asset Purchases............................................................................ 22
Asset Sales................................................................................ 23
Bundled Proposals.......................................................................... 23
Conversion of Securities................................................................... 23
Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy Plans/Reverse Leveraged
Buyouts/Wrap Plans....................................................................... 23
Formation of Holding Company............................................................... 24
Going Private Transactions (LBOs, Minority Squeezeouts, and Going Dark).................... 24
Joint Ventures............................................................................. 25
Liquidations............................................................................... 25
Mergers and Acquisitions/Issuance of Shares to Facilitate Merger or Acquisition............ 25
Private Placements/Warrants/Convertible Debentures......................................... 25
Spinoffs................................................................................... 26
Value Maximization Proposals............................................................... 26

6. STATE OF INCORPORATION..................................................................... 27
Control Share Acquisition Provisions....................................................... 27
Control Share Cash-Out Provisions.......................................................... 27
Disgorgement Provisions.................................................................... 27
Fair Price Provisions...................................................................... 27
Freeze-Out Provisions...................................................................... 28
Greenmail.................................................................................. 28
Reincorporation Proposals.................................................................. 28
Stakeholder Provisions..................................................................... 28
State Antitakeover Statutes................................................................ 28

7. CAPITAL STRUCTURE.......................................................................... 29
Adjustments to Par Value of Common Stock................................................... 29
Common Stock Authorization................................................................. 29
Dual-Class Stock........................................................................... 29
Issue Stock for Use with Rights Plan....................................................... 29
Preemptive Rights.......................................................................... 29
Preferred Stock............................................................................ 30
Recapitalization........................................................................... 30
Reverse Stock Splits....................................................................... 30
Share Repurchase Programs.................................................................. 30
Stock Distributions: Splits and Dividends.................................................. 31
Tracking Stock............................................................................. 31

8. EXECUTIVE AND DIRECTOR COMPENSATION........................................................ 32
EQUITY COMPENSATION PLANS.................................................................... 32
Cost of Equity Plans....................................................................... 32

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2008 US Proxy Voting Guidelines Summary

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RiskMetrics Group www.riskmetrics.com
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Repricing Provisions................................................................... 32
Pay-for-Performance Disconnect......................................................... 33
Three-Year Burn Rate/Burn Rate Commitment.............................................. 34
Poor Pay Practices..................................................................... 35

SPECIFIC TREATMENT OF CERTAIN AWARD TYPES IN EQUITY PLAN EVALUATIONS:................... 37
Dividend Equivalent Rights............................................................. 37
Liberal Share Recycling Provisions..................................................... 37
Option Overhang Cost................................................................... 37

OTHER COMPENSATION PROPOSALS AND POLICIES............................................... 38
401(k) Employee Benefit Plans.......................................................... 38
Advisory Vote on Executive Compensation (Say-on-Pay) Management Proposals.............. 38
Director Compensation.................................................................. 39
Director Retirement Plans.............................................................. 40
Employee Stock Ownership Plans (ESOPs)................................................. 40
Employee Stock Purchase Plans--Qualified Plans......................................... 40
Employee Stock Purchase Plans--Non-Qualified Plans..................................... 40
Incentive Bonus Plans and Tax Deductibility Proposals (OBRA-Related Compensation
Proposals)........................................................................... 40
Options Backdating..................................................................... 41
Option Exchange Programs/Repricing Options............................................. 41
Stock Plans in Lieu of Cash............................................................ 42
Transfer Programs of Stock Options..................................................... 42

SHAREHOLDER PROPOSALS ON COMPENSATION................................................... 43
Advisory Vote on Executive Compensation (Say-on-Pay)................................... 43
Compensation Consultants-Disclosure of Board or Company's Utilization.................. 43
Disclosure/Setting Levels or Types of Compensation for Executives and Directors........ 43
Pay for Superior Performance........................................................... 43
Performance-Based Awards............................................................... 44
Pension Plan Income Accounting......................................................... 45
Pre-Arranged Trading Plans (10b5-1 Plans).............................................. 45
Recoup Bonuses......................................................................... 45
Severance Agreements for Executives/Golden Parachutes.................................. 45
Share Buyback Holding Periods.......................................................... 46
Stock Ownership or Holding Period Guidelines........................................... 46
Supplemental Executive Retirement Plans (SERPs)........................................ 46
Tax Gross-Up Proposals................................................................. 46

9. CORPORATE SOCIAL RESPONSIBILITY (CSR) ISSUES........................................... 47
ANIMAL WELFARE.......................................................................... 47
Animal Testing......................................................................... 47
Animal Welfare Policies................................................................ 47
Controlled Atmosphere Killing (CAK).................................................... 47

CONSUMER ISSUES......................................................................... 47
Genetically Modified Ingredients....................................................... 47
Consumer Lending....................................................................... 48
Pharmaceutical Pricing................................................................. 48
Pharmaceutical Product Reimportation................................................... 48

- - -----------------------------------------------------------------------------
2008 US Proxy Voting Guidelines Summary

Product Safety and Toxic Materials.............................................................. 49
Tobacco......................................................................................... 49

DIVERSITY........................................................................................ 50
Board Diversity................................................................................. 50
Equality of Opportunity and Glass Ceiling....................................................... 51
Sexual Orientation and Domestic Partner Benefits................................................ 51

CLIMATE CHANGE AND THE ENVIRONMENT............................................................... 51
Climate Change.................................................................................. 51
Concentrated Area Feeding Operations (CAFO)..................................................... 52
Energy Efficiency............................................................................... 52
Facility Safety (Nuclear and Chemical Plant Safety)............................................. 52
General Environmental Reporting................................................................. 52
Greenhouse Gas Emissions........................................................................ 52
Operations in Protected Areas................................................................... 53
Recycling....................................................................................... 53
Renewable Energy................................................................................ 53

GENERAL CORPORATE ISSUES......................................................................... 53
Charitable Contributions........................................................................ 53
CSR Compensation-Related Proposals.............................................................. 54
HIV/AIDS........................................................................................ 54
Lobbying Expenditures/Initiatives............................................................... 54
Political Contributions and Trade Associations Spending......................................... 55

INTERNATIONAL ISSUES, LABOR ISSUES, AND HUMAN RIGHTS............................................. 55
China Principles................................................................................ 55
Codes of Conduct................................................................................ 55
Community Impact Assessments.................................................................... 56
Foreign Military Sales/Offsets.................................................................. 56
Internet Privacy and Censorship................................................................. 56
MacBride Principles............................................................................. 57
Nuclear and Depleted Uranium Weapons............................................................ 57
Operations in High Risk Markets................................................................. 57
Outsourcing/Offshoring.......................................................................... 58
Vendor Standards................................................................................ 58

SUSTAINABILITY................................................................................... 58
Sustainability Reporting........................................................................ 58

10. MUTUAL FUND PROXIES............................................................................ 59
Election of Directors........................................................................... 59
Converting Closed-end Fund to Open-end Fund..................................................... 59
Proxy Contests.................................................................................. 59
Investment Advisory Agreements.................................................................. 59
Approving New Classes or Series of Shares....................................................... 60
Preferred Stock Proposals....................................................................... 60
1940 Act Policies............................................................................... 60
Changing a Fundamental Restriction to a Nonfundamental Restriction.............................. 60

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2008 US Proxy Voting Guidelines Summary

Change Fundamental Investment Objective to Nonfundamental....................................... 60
Name Change Proposals........................................................................... 60
Change in Fund's Subclassification.............................................................. 61
Disposition of Assets/Termination/Liquidation................................................... 61
Changes to the Charter Document................................................................. 61
Changing the Domicile of a Fund................................................................. 61
Authorizing the Board to Hire and Terminate Subadvisors Without Shareholder Approval............ 62
Distribution Agreements......................................................................... 62
Master-Feeder Structure......................................................................... 62
Mergers......................................................................................... 62

SHAREHOLDER PROPOSALS FOR MUTUAL FUNDS........................................................... 62
Establish Director Ownership Requirement........................................................ 62
Reimburse Shareholder for Expenses Incurred..................................................... 62
Terminate the Investment Advisor................................................................ 62

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2008 US Proxy Voting Guidelines Summary

1. OPERATIONAL ITEMS

ADJOURN MEETING

Generally vote AGAINST proposals to provide management with the authority to
adjourn an annual or special meeting absent compelling reasons to support the
proposal.

AMEND QUORUM REQUIREMENTS

Vote AGAINST proposals to reduce quorum requirements for shareholder
meetings below a majority of the shares outstanding unless there are compelling
reasons to support the proposal.

AMEND MINOR BYLAWS

Vote FOR by Law or charter changes that are of a housekeeping nature
(updates or corrections).

AUDITOR INDEMNIFICATION AND LIMITATION OF LIABILITY

Consider the issue of auditor indemnification and limitation of liability on
a CASE-BY-CASE basis. Factors to be assessed include, but are not limited to:

. The terms of the auditor agreement- the degree to which these agreements
impact shareholders rights;

. Motivation and rationale for establishing the agreements;

. Quality of disclosure; and

. Historical practices in the audit area.

WTHHOLD or vote AGAINST members of an audit committee in situations where
there is persuasive evidence that the audit committee entered into an
inappropriate indemnification agreement with its auditor that limits the
ability of the company, or its shareholders, to pursue legitimate legal
recourse against the audit firm.

AUDITOR RATIFICATION

Vote FOR proposals to ratify auditors, unless any of the following apply:

. An auditor has a financial interest in or association with the company,
and is therefore not independent;

. There is reason to believe that the independent auditor has rendered an
opinion which is neither accurate nor indicative of the company's
financial position;

. Poor accounting practices are identified that rise to a serious level of
concern, such as: fraud; misapplication of GAAP; and material weaknesses
identified in Section 404 disclosures; or

. Fees for non-audit services ("Other" fees) are excessive.

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2008 US Proxy Voting Guidelines Summary

Non-audit fees are excessive if:

Non-audit ("other") fees >audit fees + audit-related fees + tax
compliance/preparation fees

Tax compliance and preparation include the preparation of original, and
amended tax returns, refund claims and tax payment planning. All other services
in the tax category, such as tax advice, planning or consulting should be added
to "Other" fees. If the breakout of tax fees cannot be determined, add all tax
fees to "Other" fees.

In circumstances where 'Other' fees include fees related to significant
one-time capital structure events: initial public offerings, bankruptcy
emergence, and spin-offs; and the company makes public disclosure of the amount
and nature of those fees which are an exception to the standard "non-audit fee'
category, then such fees may be excluded from the non-audit fees considered in
determining the ratio of non-audit to audit/audit-related fees/tax compliance
and preparation for purposes of determining whether non-audit fees are
excessive.

Vote CASE-BY-CASE on shareholder proposals asking companies to prohibit or
limit their auditors from engaging in non-audit services.

Vote CASE-BY-CASE on shareholder proposals asking for audit firm rotation,
taking into account:

. The tenure of the audit firm;

. The length of rotation specified in the proposal;

. Any significant audit-related issues at the company;

. The number of Audit Committee meetings held each year;

. The number of financial experts serving on the committee; and

. Whether the company has a periodic renewal process where the auditor is
evaluated for both audit quality and competitive price.

CHANGE COMPANY NAME

Vote FOR proposals to change the corporate name.

CHANGE DATE, TIME, OR LOCATION OF ANNUAL MEETING

Vote FOR management proposals to change the date, time, and/or location of
the annual meeting unless the proposed change is unreasonable.

Vote AGAINST shareholder proposals to change the date, time, and/or location
of the annual meeting unless the current scheduling or location is unreasonable.

TRANSACT OTHER BUSINESS

Vote AGAINST proposals to approve other business when it appears as voting
item.

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2008 US Proxy Voting Guidelines Summary

2. BOARD OF DIRECTORS:

VOTING ON DIRECTOR NOMINEES IN UNCONTESTED ELECTIONS

Vote on director nominees should be determined on a CASE-BY-CASE basis.

Vote AGAINST or WITHHOLD/1/ from individual directors who:

. Attend less than 75 percent of the board and committee meetings without
a valid excuse (such as illness, service to the nation, work on behalf
of the company);

. Sit on more than six public company boards;

. Are CEOs of public companies who sit on the boards of more than two
public companies besides their own--withhold only at their outside
boards.

Vote AGAINST or WITHHOLD from all nominees of the board of directors,
(except from new nominees, who should be considered on a CASE-BY-CASE basis) if:

. The company's proxy indicates that not alt directors attended 75% of the
aggregate of their board and committee meetings, but fails to provide
the required disclosure of the names of the directors involved. If this
information cannot be obtained, vote against/withhold from all incumbent
directors;

. The company's poison pill has a dead-hand or modified dead-hand feature.
Vote against/withhold every year until this feature is removed;

. The board adopts or renews a poison pill without shareholder approval,
does not commit to putting it to shareholder vote within 12 months of
adoption (or in the case of an newly public company, does not commit to
put the pill to a shareholder vote within 12 months following the IPO),
or reneges on a commitment to put the pill to a vote, and has not yet
received a withhold/against recommendation for this issue;

. The board failed to act on a shareholder proposal that received approval
by a majority of the shares outstanding the previous year (a management
proposal with other than a FOR recommendation by management will not be
considered as sufficient action taken);

. The board failed to act on a shareholder proposal that received approval
of the majority of shares cast for the previous two consecutive years (a
management proposal with other than a FOR recommendation by management
will not be considered as sufficient action taken);

. The board failed to act on takeover offers where the majority of the
shareholders tendered their shares;

. At the previous board election, any director received more than 50
percent withhold/against votes of the shares cast and the company has
failed to address the underlying issue(s) that caused the high
withhold/against vote;

. The company is a Russell 3000 company that underperformed its industry
group (GICS group) under the criteria discussed in the section
"Performance Test for Directors";

- - --------
/1/ In general, companies with a plurality vote standard use "Withhold" as the
valid contrary vote option in director elections; companies with a
majority vote standard use "Against". However, it will vary by company and
the proxy must be checked to determine the valid contrary vote option for
the particular company.

- - -----------------------------------------------------------------------------
2008 US Proxy Voting Guidelines Summary

. The board is classified, and a continuing director responsible for a
problematic governance issue at the board/committee level that would
warrant a withhold/against vote recommendation is not up for election-
any or all appropriate nominees (except new) may be held accountable.

Vote AGAINST or WITHHOLD from Inside Directors and Affiliated Outside
Directors (per the Classification of Directors below) when:

. The inside or affiliated outside director serves on any of the three key
committees: audit, compensation, or nominating;

. The company lacks an audit, compensation, or nominating committee so
that the full board functions as that committee;

. The company lacks a formal nominating committee, even if board attests
that the independent directors fulfill the functions of such a committee;

. The full board is less than majority independent.

Vote AGAINST or WITHHOLD from the members of the Audit Committee if:

. The non - audit fees paid to the auditor are excessive (see discussion
under Auditor Ratification);

. Poor accounting practices are identified which rise to a Level of
serious concern, such as: fraud; misapplication of GAAP; and material
weaknesses identified in Section 404 disclosures; or

Vote AGAINST or WITHHOLD from the members of the Compensation Committee if:

. There is a negative correlation between the chief executive's pay and
company performance (see discussion under Equity Compensation Plans);

. The company reprices underwater options for stock, cash or other
consideration without prior shareholder approval, even if allowed in
their equity plan;

. The company fails to submit one-time transfers of stock options to a
shareholder vote;

. The company fails to fulfill the terms of a burn rate commitment they
made to shareholders;

. The company has backdated options (see "Options Backdating" policy);

. The company has poor compensation practices (see "Poor Pay Practices"
policy). Poor pay practices may warrant withholding votes from the CEO
and potentially the entire board as welt.

Vote AGAINST or WITHHOLD from directors, individually or the entire board,
for egregious actions or failure to replace management as appropriate.

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2008 US Proxy Voting Guidelines Summary

2008 CLASSIFICATION OF DIRECTORS

INSIDE DIRECTOR (I)

. Employee of the company or one of its affiliates/1/

. Non-employee officer of the company if among the five most highly paid
individuals (excluding interim CEO);

. Listed as a Section 16 officer/2/

. Current interim CEO;

. Beneficial owner of more than 50 percent of the company's voting power
(this may be aggregated if voting power is distributed among more than
one member of a defined group).

AFFILIATED OUTSIDE DIRECTOR (AO)

. Board attestation that an outside director is not independent;

. Former CEO of the company/3/

. Former CEO of an acquired company within the past five years;

. Former interim CEO if the service was longer than 18 months. If the
service was between twelve and eighteen months an assessment of the
interim CEO's employment agreement will be made;/4/

. Former executive/2/ of the company, an affiliate or an acquired firm
within the past five years;

. Executive/2/ of a former parent or predecessor firm at the time the
company was sold or split off from the parent/predecessor within the
past five years;

. Executive/2/, former executive, general or limited partner of a joint
venture or partnership with the company;

- - --------
FOOTNOTES:

/1/ "Affiliate" includes a subsidiary, sibling company, or parent company. ISS
uses 50 percent control ownership by the parent company as the standard
for applying its affiliate designation.
/2/ "Executives" (officers subject to Section 16 of the Securities and
Exchange Act of 1934) include the chief executive, operating, financial,
legal, technology, and accounting officers of a company (including the
president, treasurer, secretary, controller, or any vice president in
charge of a principal business unit, division or policy function). A
non-employee director serving as an officer due to statutory requirements
(e.g. corporate secretary) will be classified as an Affiliated Outsider.
If the company provides additional disclosure that the director is not
receiving additional compensation for serving in that capacity, then the
director will be classified as an Independent Outsider.
/3/ Includes any former CEO of the company prior to the company's initial
public offering (IPO).
/4/ ISS will look at the terms of the interim CEO's employment contract to
determine if it contains severance pay, long-term health and pension
benefits or other such standard provisions typically contained in
contracts of permanent, non-temporary CEOs. ISS wilt also consider if a
formal search process was underway for a full-time CEO at the time.

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2008 US Proxy Voting Guidelines Summary

. Relative/5/ of a current Section 16 officer of company or its affiliates;

. Relative/5/ of a current employee of company or its affiliates where
additional factors raise concern (which may include, but are not limited
to, the following: a director related to numerous employees; the company
or its affiliates employ relatives of numerous board members; or a
non-Section 16 officer in a key strategic role);

. Relative/5/ of former Section 16 officer, of company or its affiliate
within the last five years;

. Currently provides (or a relative/5/ provides) professional services/6/
to the company, to an affiliate of the company or an individual officer
of the company or one of its affiliates in excess of $10,000 per year;

. Employed by (or a relative/5/ is employed by) a significant customer or
supplier/7/

. Has (or a relative/5/ has) any transactional relationship with the
company or its affiliates excluding investments in the company through a
private placement;

. Any material financial tie or other related party transactional
relationship to the company;

. Party to a voting agreement to vote in line with management on proposals
being brought to shareholder vote;

. Has (or a relative/5/ has) an interlocking relationship as defined by
the SEC involving members of the board of directors or its Compensation
and Stock Option Committee;/8/

. Founder/9/ of the company but not currently an employee;

. Is (or a relative/5/ is) a trustee, director or employee of a charitable
or non-profit organization that receives grants or endowments/7/ from
the company or its affiliates/1/.

- - --------
FOOTNOTES:

/5/ "Relative" follows the SEC's new definition of "immediate family members"
which covers spouses, parents, children, step-parents, step-children,
siblings, in-laws, and any person (other than a tenant or employee)
sharing the household of any director, nominee for director, executive
officer, or significant shareholder of the company.
/6/ Professional services can be characterized as advisory in nature and
generally include the following: investment banking I financial advisory
services; commercial banking (beyond deposit services); investment
services; insurance services; accounting/audit services; consulting
services; marketing services; and legal services. The case of
participation in a banking syndicate by a non-lead bank should be
considered a transaction (and hence subject to the associated materiality
test) rather than a professional relationship.
/7/ If the company makes or receives annual payments exceeding the greater of
$200,000 or 5 percent of the recipient's gross revenues. (The recipient is
the party receiving the financial proceeds from the transaction).
/8/ Interlocks include: (a) executive officers serving as directors on each
other's compensation or similar committees (or, in the absence of such a
committee, on the board); or (b) executive officers sitting on each
other's boards and at Least one serves on the other's compensation or
similar committees (or, in the absence of such a committee, on the board).
/9/ The operating involvement of the Founder with the company will be
considered. Little to no operating involvement may cause ISS to deem the
Founder as an independent outsider.

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2008 US Proxy Voting Guidelines Summary

INDEPENDENT OUTSIDE DIRECTOR (IO)

. No material/10/ connection to the company other than a board seat.

AGE LIMITS

Vote AGAINST shareholder or management proposals to limit the tenure of
outside directors through mandatory retirement ages.

BOARD SIZE

Vote FOR proposals seeking to fix the board size or designate a range for
the board size.

Vote AGAINST proposals that give management the ability to alter the size of
the board outside of a specified range without shareholder approval.

CLASSIFICATION/DECLASSIFICATION OF THE BOARD

Vote AGAINST proposals to classify the board.

Vote FOR proposals to repeal classified boards and to elect all directors
annually.

CUMULATIVE VOTING

Generally vote AGAINST proposals to eliminate cumulative voting.

Generally vote FOR proposals to restore or provide for cumulative voting
unless:

. The company has proxy access or a similar structure/2/ to allow
shareholders to nominate directors to the company's ballot; and

. The company has adopted a majority vote standard, with a carve-out for
plurality voting in situations where there are more nominees than seats,
and a director resignation policy to address failed elections.

Vote FOR proposals for cumulative voting at controlled companies (insider
voting power > 50%).

DIRECTOR AND OFFICER INDEMNIFICATION AND LIABILITY PROTECTION

Vote CASE-BY-CASE on proposals on director and officer indemnification and
liability protection using Delaware law as the standard.

- - --------
FOOTNOTES:

/2/ Similar structure" would be a structure that allows shareholders to
nominate candidates who the company will include on the management ballot
IN ADDITION TO management's nominees, and their bios are included in
management's proxy.
/10/ For purposes of ISS' director independence classification, "material" will
be defined as a standard of relationship (financial, personal or
otherwise) that a reasonable person might conclude could potentially
influence one's objectivity in the boardroom in a manner that would have a
meaningful impact on an individual's ability to satisfy requisite
fiduciary standards on behalf of shareholders.

- - -----------------------------------------------------------------------------
2008 US Proxy Voting Guidelines Summary

Vote AGAINST proposals to eliminate entirely directors' and officers'
liability for monetary damages for violating the duty of care.

Vote AGAINST indemnification proposals that would expand coverage beyond
just legal expenses to Liability for acts, such as negligence, that are more
serious violations of fiduciary obligation than mere carelessness.

Vote AGAINST proposals that would expand the scope of indemnification to
provide for mandatory indemnification of company officials in connection with
acts that previously the company was permitted to provide indemnification for
at the discretion of the company's board (i.e., "permissive indemnification)
but that previously the company was not required to indemnify.

Vote FOR only those proposals providing such expanded coverage in cases when
a director's or officer's legal defense was unsuccessful if both of the
following apply:

. If the director was found to have acted in good faith and in a manner
that he reasonably believed was in the best interests of the company; and

. If only the director's legal expenses would be covered.

ESTABLISH/AMEND NOMINEE QUALIFICATIONS

Vote AGAINST shareholder proposals requiring two candidates per board seat.

FILLING VACANCIES/REMOVAL OF DIRECTORS

Vote AGAINST proposals that provide that directors may be removed only for
cause.

Vote FOR proposals to restore shareholders' ability to remove directors with
or without cause.

Vote AGAINST proposals that provide that only continuing directors may elect
replacements to fill board vacancies.

Vote FOR proposals that permit shareholders to elect directors to fill board
vacancies.

INDEPENDENT CHAIR (SEPARATE CHAIR/CEO)

Generally vote FOR shareholder proposals requiring that the chairman's
position be filled by an independent director, unless there are compelling
reasons to recommend against the proposal, such as a counterbalancing
governance structure. This should include all the following:

- - -----------------------------------------------------------------------------
2008 US Proxy Voting Guidelines Summary

or rotating lead director; however the director must serve a minimum of
one year in order to qualify as a lead director.) The duties should
include, but are not limited to, the following:

. presides at all meetings of the board at which the chairman is not
present, including executive sessions of the independent directors;

. serves as liaison between the chairman and the independent directors;

. approves information sent to the board;

. approves meeting agendas for the board;

. approves meeting schedules to assure that there is sufficient time
for discussion of all agenda items;

. has the authority to call meetings of the independent directors;

. if requested by major shareholders, ensures that he is available for
consultation and direct communication;

. The company publicly discloses a comparison of the duties of its
independent lead director and its chairman;

. The company publicly discloses a sufficient explanation of why it
chooses not to give the position of chairman to the independent lead
director, and instead combine the chairman and CEO positions;

. Two-thirds independent board;

. All independent key committees;

. Established governance guidelines;

. The company should not have underperformed both its peers and index on
the basis of both one-year and three-year total shareholder returns*,
unless there has been a change in the Chairman/CEO position within that
time; and

. The company does not have any problematic governance issues.

Vote FOR the proposal if the company does not provide disclosure with
respect to any or all of the bullet points above. If disclosure is provided,
evaluate on a CASE-BY-CASE basis.
- - --------
* The industry peer group used for this evaluation is the average of the 12
companies in the same 6-digit GICS group that are closest in revenue to the
company. To fail, the company must under-perform its index and industry
group on all 4 measures (1 and 3 year on industry peers and index).

MAJORITY OF INDEPENDENT DIRECTORS/ESTABLISHMENT OF COMMITTEES

Vote FOR shareholder proposals asking that board audit, compensation, and/or
nominating committees be composed exclusively of independent directors if they
currently do not meet that standard.

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2008 US Proxy Voting Guidelines Summary

MAJORITY VOTE SHAREHOLDER PROPOSALS

Generally vote FOR precatory and binding resolutions requesting that the
board change the company's bylaws to stipulate that directors need to be
elected with an affirmative majority of votes cast, provided it does not
conflict with the state law where the company is incorporated. Binding
resolutions need to allow for a carve- out for a plurality vote standard when
there are more nominees than board seats.

OFFICE OF THE BOARD

. Established a communication structure that goes beyond the exchange
requirements to facilitate the exchange of information between
shareholders and members of the board;

. Effectively disclosed information with respect to this structure to its
shareholders;

. Company has not ignored majority-supported shareholder proposals or a
majority withhold vote on a director nominee; and

OPEN ACCESS

Vote shareholder proposals asking for open or proxy access on a CASE-BY-CASE
basis, taking into account:

. The ownership threshold proposed in the resolution;

. The proponent's rationale for the proposal at the targeted company in
terms of board and director conduct.

PERFORMANCE TEST FOR DIRECTORS

On a CASE-BY-CASE basis, Vote AGAINST or WITHHOLD from directors of Russell
3000 companies that underperformed relative to their industry peers. The
criterion used to evaluate such underperformance is a combination of four
performance measures:

One measurement is a market-based performance metric and three measurements
are tied to the company's operational performance. The market performance
metric in the methodology is five-year Total Shareholder Return (TSR) on a
relative basis within each four-digit GICS group. The three operational
performance metrics are sales growth, EBITDA growth (or operating income growth
for companies in the financial sector), and

- - -----------------------------------------------------------------------------
2008 US Proxy Voting Guidelines Summary

pre-tax operating Return on Invested Capital (ROIC) (or Return on Average
Assets (ROAA) for companies in the financial sector) on a relative basis within
each four-digit GICS group. All four metrics will be time-weighted as follows:

40 percent on the trailing 12 month period and 60 percent on the 48 month
period prior to the trailing 12 months. This methodology emphasizes the
company's historical performance over a five-year period yet also accounts for
near-term changes in a company's performance.

The table below summarizes the framework:

METRICS BASIS OF EVALUATION WEIGHTING 2/ND/ WEIGHTING
- - ------- ------------------- --------- -------------

OPERATIONAL PERFORMANCE................. 50%
5-YEAR AVERAGE PRE-TAX OPERATING ROIC OR MANAGEMENT
ROAA*................................. EFFICIENCY IN
DEPLOYING
ASSETS 33.3%
5-YEAR SALES GROWTH..................... TOP-LINE 33.3%
5-YEAR EBITDA GROWTH OR OPERATING INCOME
GROWTH*............................... CORE-EARNINGS 33.3%
----
SUB TOTAL............................... 100%
====
STOCK PERFORMANCE....................... 50%
5-YEAR TSR.............................. MARKET
---
TOTAL................................... 100%
===

- - --------
* Metric applies to companies in the financial sector

Adopt a two-phase approach. In Year 1, the worst performers (bottom 5
percent) within each of the 24 GICS groups receive are noted. In Year 2,
consider a vote AGAINST or WITHHOLD votes from director nominees if a company
continues to be in the bottom five percent within its GICS group for that
respective year and shows no improvement in its most recent trailing 12 months
operating and market performance relative to its peers in its GICS group. Take
into account various factors including:

. Year-to-date performance;

. Situational circumstances;

. Change in management/board;

. Overall governance practices.

STOCK OWNERSHIP REQUIREMENTS

- - ------------------------------------------------------------------------------
2008 US Proxy Voting Guidelines Summary

TERM LIMITS

- - ------------------------------------------------------------------------------
2008 US Proxy Voting Guidelines Summary

3. PROXY CONTESTS

VOTING FOR DIRECTOR NOMINEES IN CONTESTED ELECTIONS

Vote CASE-BY-CASE on the election of directors in contested elections,
considering the following factors:

. Long-term financial performance of the target company relative to its
industry;

. Management's track record;

. Background to the proxy contest;

. Qualifications of director nominees (both slates);

. Strategic plan of dissident slate and quality of critique against
management;

. Likelihood that the proposed goals and objectives can be achieved (both
slates);

. Stock ownership positions.

REIMBURSING PROXY SOLICITATION EXPENSES

Generally vote FOR shareholder proposals calling for the reimbursement of
reasonable costs incurred in connection with nominating one or more candidates
in a contested election where the following apply:

. The election of fewer than 50% of the directors to be elected is
contested in the election;

. One or more of the dissident's candidates is elected;

. Shareholders are not permitted to cumulate their votes for directors; and

. The election occurred, and the expenses were incurred, after the
adoption of this bylaw.

CONFIDENTIAL VOTING

Vote FOR management proposals to adopt confidential voting.

- - -----------------------------------------------------------------------------
2008 US Proxy Voting Guidelines Summary

4. ANTITAKEOVER DEFENSES AND VOTING RELATED ISSUES

ADVANCE NOTICE REQUIREMENTS FOR SHAREHOLDER PROPOSALS/NOMINATIONS

AMEND BYLAWS WITHOUT SHAREHOLDER CONSENT

Vote AGAINST proposals giving the board exclusive authority to amend the
bylaws.

Vote FOR proposals giving the board the ability to amend the bylaws in
addition to shareholders.

POISON PILLS

. Shareholders have approved the adoption of the plan; or

. The board, in its exercise of its fiduciary responsibilities, determines
that it is in the best interest of shareholders under the circumstances
to adopt a pill without the delay in adoption that would result from
seeking stockholder approval (i.e., the "fiduciary out" provision). A
poison pill adopted under this fiduciary out wilt be put to a
shareholder ratification vote within 12 months of adoption or expire. If
the pill is not approved by a majority of the votes cast on this issue,
the plan will immediately terminate.

Vote FOR shareholder proposals catting for poison pills to be put to a vote
within a time period of less than one year after adoption. If the company has
no non-shareholder approved poison pill in place and has adopted a policy with
the provisions outlined above, vote AGAINST the proposal. If these conditions
are not met, vote FOR the proposal, but with the caveat that a vote within 12
months would be considered sufficient.

Vote CASE-by-CASE on management proposals on poison pill ratification,
focusing on the features of the shareholder rights plan. Rights plans should
contain the following attributes:

. No lower than a 20% trigger, flip-in or flip-over;

. A term of no more than three years;

. No dead-hand, slow-hand, no-hand or similar feature that limits the
ability of a future board to redeem the pill;

. Shareholder redemption feature (qualifying offer clause); if the board
refuses to redeem the pill 90 days after a qualifying offer is
announced, 10 percent of the shares may call a special meeting or seek a
written consent to vote on rescinding the pill.

SHAREHOLDER ABILITY TO ACT BY WRITTEN CONSENT

Vote AGAINST proposals to restrict or prohibit shareholder ability to take
action by written consent.

Vote FOR proposals to allow or make easier shareholder action by written
consent.

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2008 US Proxy Voting Guidelines Summary

SHAREHOLDER ABILITY TO CALL SPECIAL MEETINGS

Vote AGAINST proposals to restrict or prohibit shareholder ability to call
special meetings.

Vote FOR proposals that remove restrictions on the right of shareholders to
act independently of management.

SUPERMAJORITY VOTE REQUIREMENTS

Vote AGAINST proposals to require a supermajority shareholder vote.

Vote FOR proposals to lower supermajority vote requirements.

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2008 US Proxy Voting Guidelines Summary

5. MERGERS AND CORPORATE RESTRUCTURINGS

OVERALL APPROACH

For mergers and acquisitions, review and evaluate the merits and drawbacks
of the proposed transaction, balancing various and sometimes countervailing
factors including:

. MARKET REACTION--How has the market responded to the proposed deal? A
negative market reaction should cause closer scrutiny of a deal.

. NEGOTIATIONS AND PROCESS--Were the terms of the transaction negotiated
at arms-length? Was the process fair and equitable? A fair process helps
to ensure the best price for shareholders. Significant negotiation
'wins" can also signify the deal makers' competency. The
comprehensiveness of the sales process (e.g., full auction, partial
auction, no auction) can also affect shareholder value.

. CONFLICTS OF INTEREST--Are insiders benefiting from the transaction
disproportionately and inappropriately as compared to non-insider
shareholders? As the result of potential conflicts, the directors and
officers of the company may be more likely to vote to approve a merger
than if they did not hold these interests. Consider whether these
interests may have influenced these directors and officers to support or
recommend the merger. The CIC figure presented in the "155 Transaction
Summary" section of this report is an aggregate figure that can in
certain cases be a misleading indicator of the true value transfer from
shareholders to insiders. Where such figure appears to be excessive,
analyze the underlying assumptions to determine whether a potential
conflict exists.

APPRAISAL RIGHTS

Vote FOR proposals to restore, or provide shareholders with rights of
appraisal.

ASSET PURCHASES

Vote CASE-BY-CASE on asset purchase proposals, considering the following
factors:

. Purchase price;

. Fairness opinion;

. Financial and strategic benefits;

. How the deal was negotiated;

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2008 US Proxy Voting Guidelines Summary

. Conflicts of interest;

. Other alternatives for the business;

. Non-completion risk.

ASSET SALES

Vote CASE-BY-CASE on asset sales, considering the following factors:

. Impact on the balance sheet/working capital;

. Potential elimination of diseconomies;

. Anticipated financial and operating benefits;

. Anticipated use of funds;

. Value received for the asset;

. Fairness opinion;

. How the deal was negotiated;

. Conflicts of interest.

BUNDLED PROPOSALS

CONVERSION OF SECURITIES

Vote FOR the conversion if it is expected that the company will be subject
to onerous penalties or will be forced to file for bankruptcy if the
transaction is not approved.

CORPORATE REORGANIZATION/DEBT RESTRUCTURING/PREPACKAGED BANKRUPTCY
PLANS/REVERSE LEVERAGED BUYOUTS/WRAP PLANS

Vote CASE-BY-CASE on proposals to increase common and/or preferred shares
and to issue shares as part of a debt restructuring plan, taking into
consideration the following:

. Dilution to existing shareholders' position;

. Terms of the offer;

. Financial issues;

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2008 US Proxy Voting Guidelines Summary

. Management's efforts to pursue other alternatives;

. Control issues;

. Conflicts of interest.

Vote FOR the debt restructuring if it is expected that the company will file
for bankruptcy if the transaction is not approved.

FORMATION OF HOLDING COMPANY

Vote CASE-BY-CASE on proposals regarding the formation of a holding company,
taking into consideration the following:

. The reasons for the change;

. Any financial or tax benefits;

. Regulatory benefits;

. Increases in capital structure;

. Changes to the articles of incorporation or bylaws of the company.

Absent compelling financial reasons to recommend the transaction, vote
AGAINST the formation of a holding company if the transaction would include
either of the following:

. Increases in common or preferred stock in excess of the allowable
maximum (see discussion under "Capital Structure");

. Adverse changes in shareholder rights.

GOING PRIVATE TRANSACTIONS (LBOS, MINORITY SQUEEZEOUTS, AND GOING DARK)

Vote CASE-BY-CASE on going private transactions, taking into account the
following:

. Offer price/premium;

. Fairness opinion;

. How the deal was negotiated;

. Conflicts of interest;

. Other alternatives/offers considered; and

. Non-completion risk.

Vote CASE-BY-CASE on "going dark" transactions, determining whether the
transaction enhances shareholder value by taking into consideration:

. Whether the company has attained benefits from being publicly-traded
(examination of trading volume, liquidity, and market research of the
stock);

. Cash-out value;

. Whether the interests of continuing and cashed-out shareholders are
balanced; and

. The market reaction to public announcement of transaction.

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2008 US Proxy Voting Guidelines Summary

JOINT VENTURES

Vote CASE-BY-CASE on proposals to form joint ventures, taking into account
the following:

. Percentage of assets/business contributed;

. Percentage ownership;

. Financial and strategic benefits;

. Governance structure;

. Conflicts of interest;

. Other alternatives;

. Noncompletion risk.

LIQUIDATIONS

Vote CASE-BY-CASE on liquidations, taking into account the following:

. Management's efforts to pursue other alternatives;

. Appraisal value of assets; and

. The compensation plan for executives managing the liquidation.

Vote FOR the liquidation if the company will file for bankruptcy if the
proposal is not approved.

MERGERS AND ACQUISITIONS/ISSUANCE OF SHARES TO FACILITATE MERGER OR ACQUISITION

PRIVATE PLACEMENTS/WARRANTS/CONVERTIBLE DEBENTURES

Vote CASE-BY-CASE on proposals regarding private placements, taking into
consideration:

. Dilution to existing shareholders' position;

. Terms of the offer;

. Financial issues;

. Management's efforts to pursue other alternatives;

. Control issues;

. Conflicts of interest.

Vote FOR the private placement if it is expected that the company will file
for bankruptcy if the transaction is not approved.

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2008 US Proxy Voting Guidelines Summary

SPINOFFS

Vote CASE-BY-CASE on spin-offs, considering:

. Tax and regulatory advantages;

. Planned use of the sale proceeds;

. Valuation of spinoff;

. Fairness opinion;

. Benefits to the parent company;

. Conflicts of interest;

. Managerial incentives;

. Corporate governance changes;

. Changes in the capital structure.

VALUE MAXIMIZATION PROPOSALS

Vote CASE-BY-CASE on shareholder proposals seeking to maximize shareholder
value by hiring a financial advisor to explore strategic alternatives, selling
the company or Liquidating the company and distributing the proceeds to
shareholders. These proposals should be evaluated based on the following
factors:

. Prolonged poor performance with no turnaround in sight;

. Signs of entrenched board and management;

. Strategic plan in place for improving value;

. Likelihood of receiving reasonable value in a sale or dissolution; and

. Whether company is actively exploring its strategic options, including
retaining a financial advisor.

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2008 US Proxy Voting Guidelines Summary

6. STATE OF INCORPORATION

CONTROL SHARE ACQUISITION PROVISIONS

Vote FOR proposals to opt out of control share acquisition statutes unless
doing so would enable the completion of a takeover that would be detrimental to
shareholders.

Vote AGAINST proposals to amend the charter to include control share
acquisition provisions.

Vote FOR proposals to restore voting rights to the control shares.

CONTROL SHARE CASH-OUT PROVISIONS

Vote FOR proposals to opt out of control share cash-out statutes.

DISGORGEMENT PROVISIONS

Disgorgement provisions require an acquirer or potential acquirer of more
than a certain percentage of a company's stock to disgorge, or pay back, to the
company any profits realized from the sate of that company's stock purchased 24
months before achieving control status. All sales of company stock by the
acquirer occurring within a certain period of time (between 18 months and 24
months) prior to the investor's gaining control status are subject to these
recapture-of-profits provisions.

Vote FOR proposals to opt out of state disgorgement provisions.

FAIR PRICE PROVISIONS

Generally, vote AGAINST fair price provisions with shareholder vote
requirements greater than a majority of disinterested shares.

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2008 US Proxy Voting Guidelines Summary

FREEZE-OUT PROVISIONS

GREENMAIL

Vote FOR proposals to adopt anti-greenmail charter or bylaw amendments or
otherwise restrict a company's ability to make greenmail payments.

Vote CASE-BY-CASE on anti-greenmail proposals when they are bundled with
other charter or bylaw amendments.

REINCORPORATION PROPOSALS

Vote CASE-BY-CASE on proposals to change a company's state of incorporation,
taking into consideration both financial and corporate governance concerns,
including:

. The reasons for reincorporating;

. A comparison of the governance provisions;

. Comparative economic benefits; and

. A comparison of the jurisdictional Laws.

Vote FOR re-incorporation when the economic factors outweigh any neutral or
negative governance changes.

STAKEHOLDER PROVISIONS

Vote AGAINST proposals that ask the board to consider non-shareholder
constituencies or other non-financial effects when evaluating a merger or
business combination.

STATE ANTITAKEOVER STATUTES

Vote CASE-BY-CASE on proposals to opt in or out of state takeover statutes
(including control share acquisition statutes, control share cash-out statutes,
freeze-out provisions, fair price provisions, stakeholder laws, poison pill
endorsements, severance pay and labor contract provisions, anti-greenmail
provisions, and disgorgement provisions).

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2008 US Proxy Voting Guidelines Summary

7. CAPITAL STRUCTURE

ADJUSTMENTS TO PAR VALUE OF COMMON STOCK

Vote FOR management proposals to reduce the par value of common stock.

COMMON STOCK AUTHORIZATION

Vote CASE-BY-CASE on proposals to increase the number of shares of common
stock authorized for issuance using a model developed by ISS.

In addition, for capital requests Less than or equal to 300 percent of the
current authorized shares that marginally fail the calculated allowable cap
(i.e., exceed the allowable cap by no more than 5 percent), on a CASE-BY-CASE
basis, vote FOR the increase based on the company's performance and whether the
company's ongoing use of shares has shown prudence. Factors should include, at
a minimum, the following:

. Rationale;

. Good performance with respect to peers and index on a five-year total
shareholder return basis;

. Absence of non-shareholder approved poison pill;

. Reasonable equity compensation burn rate;

. No non-shareholder approved pay plans; and

. Absence of egregious equity compensation practices.

DUAL-CLASS STOCK

Vote AGAINST proposals to create a new class of common stock with superior
voting rights.

Vote AGAINST proposals at companies with dual-class capital structures to
increase the number of authorized shares of the class of stock that has
superior voting rights.

Vote FOR proposals to create a new class of nonvoting or sub-voting common
stock if:

. It is intended for financing purposes with minimal or no dilution to
current shareholders;

. It is not designed to preserve the voting power of an insider or
significant shareholder.

ISSUE STOCK FOR USE WITH RIGHTS PLAN

Vote AGAINST proposals that increase authorized common stock for the
explicit purpose of implementing a non-shareholder approved shareholder rights
plan (poison pill).

PREEMPTIVE RIGHTS

Vote CASE-BY-CASE on shareholder proposals that seek preemptive rights,
taking into consideration: the size of a company, the characteristics of its
shareholder base, and the liquidity of the stock.

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2008 US Proxy Voting Guidelines Summary

PREFERRED STOCK

Vote AGAINST proposals authorizing the creation of new classes of preferred
stock with unspecified voting, conversion, dividend distribution, and other
rights ('blank check' preferred stock).

Vote FOR proposals to create 'declawed" blank check preferred stock (stock
that cannot be used as a takeover defense).

Vote AGAINST proposals to increase the number of blank check preferred stock
authorized for issuance when no shares have been issued or reserved for a
specific purpose.

RECAPITALIZATION

Vote CASE-BY-CASE on recapitalizations (reclassifications of securities),
taking into account the following:

. More simplified capital structure;

. Enhanced liquidity;

. Fairness of conversion terms;

. Impact on voting power and dividends;

. Reasons for the reclassification;

. Conflicts of interest; and

. Other alternatives considered.

REVERSE STOCK SPLITS

Vote FOR management proposals to implement a reverse stock split when the
number of authorized shares wilt be proportionately reduced.

Vote FOR management proposals to implement a reverse stock split to avoid
delisting.

SHARE REPURCHASE PROGRAMS

Vote FOR management proposals to institute open-market share repurchase
plans in which alt shareholders may participate on equal terms.

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2008 US Proxy Voting Guidelines Summary

STOCK DISTRIBUTIONS: SPLITS AND DIVIDENDS

TRACKING STOCK

Vote CASE-BY-CASE on the creation of tracking stock, weighing the strategic
value of the transaction against such factors as:

. Adverse governance changes;

. Excessive increases in authorized capital stock;

. Unfair method of distribution;

. Diminution of voting rights;

. Adverse conversion features;

. Negative impact on stock option plans; and

. Alternatives such as spin-off.

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2008 US Proxy Voting Guidelines Summary

8. EXECUTIVE AND DIRECTOR COMPENSATION

EQUITY COMPENSATION PLANS

Vote CASE-BY-CASE on equity-based compensation plans. Vote AGAINST the
equity plan if any of the following factors apply:

. The total cost of the company's equity plans is unreasonable;

. The plan expressly permits the repricing of stock options without prior
shareholder approval;

. There is a disconnect between CEO pay and the company's performance;

. The company's three year burn rate exceeds the greater of 2% and the
mean plus one standard deviation of its industry group; or

. The plan is a vehicle for poor pay practices.

Each of these factors is described below:

COST OF EQUITY PLANS

Generally, vote AGAINST equity plans if the cost is unreasonable. For
non-employee director plans, vote FOR the plan if certain factors are met (see
Director Compensation section).

REPRICING PROVISIONS

Vote AGAINST plans that expressly permit the repricing of underwater stock
options without prior shareholder approval, even if the cost of the plan is
reasonable. Also, vote AGAINST OR WITHHOLD from members of the Compensation
Committee who approved and/or implemented an option exchange program by
repricing and buying out underwater options for stock, cash or other
consideration or canceling underwater options and regranting options with a
lower exercise price without prior shareholder approval, even if such
repricings are allowed in their equity plan.

Vote AGAINST plans if the company has a history of repricing options without
shareholder approval, and the applicable listing standards would not preclude
them from doing so.

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2008 US Proxy Voting Guidelines Summary

PAY-FOR-PERFORMANCE DISCONNECT

Generally vote AGAINST plans in which:

. There is a disconnect between the CEO's pay and company performance (an
increase in pay and a decrease in performance);

. The main source of the pay increase (over half) is equity-based; and

. The CEO is a participant of the equity proposal.

Performance decreases are based on negative one- and three-year total
shareholder returns. CEO pay increases are based on the CEO's total direct
compensation (salary, cash bonus, value of non-equity incentive payouts,
present value of stock options, face value of restricted stock, target value of
performance-based awards, change in pension value and nonqualified deferred
compensation earnings, and all other compensation) increasing over the previous
year.

Vote AGAINST or WITHHOLD votes from the Compensation Committee members when
the company has a pay- for-performance disconnect.

On a CASE-BY-CASE basis, vote for equity plans and FOR compensation
committee members with a pay-for- performance disconnect if compensation
committee members can present strong and compelling evidence of improved
committee performance. This evidence must go beyond the usual compensation
committee report disclosure. This additional evidence necessary includes all of
the following:

. The compensation committee has reviewed all, components of the CEO's
compensation, including the following:

- Base salary, bonus, long-term incentives;

- Accumulative realized and unrealized stock option and restricted stock
gains;

- Dollar value of perquisites and other personal benefits to the CEO and
the total cost to the company;

- Earnings and accumulated payment obligations under the company's
nonqualified deferred compensation program;

- Actual projected payment obligations under the company's supplemental
executive retirement plan (SERPs).

. A tally sheet with all the above components should be disclosed for the
following termination scenarios:

- Payment if termination occurs within 12 months: $

- Payment if "not for cause" termination occurs within 12 months: $

- Payment if "change of control" termination occurs within 12 months:
$

. The compensation committee is committed to providing additional
information on the named executives' annual cash bonus program and/or
Long-term incentive cash plan for the current fiscal year. The
compensation committee will provide full disclosure of the qualitative
and quantitative performance criteria and hurdle rates used to determine
the payouts of the cash program. From this disclosure, shareholders will
know the minimum level of performance required for any cash bonus to be
delivered, as well as the maximum cash bonus payable for superior
performance.

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2008 US Proxy Voting Guidelines Summary

The repetition of the compensation committee report does not meet ISS'
requirement of compelling and strong evidence of improved disclosure. The Level
of transparency and disclosure is at the highest level where shareholders can
understand the mechanics of the annual cash bonus and/or long-term incentive
cash plan based on the additional disclosure.

. The compensation committee is committed to granting a substantial
portion of performance-based equity awards to the named executive
officers. A substantial portion of performance-based awards would be at
least 50 percent of the shares awarded to each of the named executive
officers. Performance-based equity awards are earned or paid out based
on the achievement of company performance targets. The company will
disclose the details of the performance criteria (e.g., return on
equity) and the hurdle rates (e.g., 15 percent) associated with the
performance targets. From this disclosure, shareholders will know the
minimum level of performance required for any equity grants to be made.
The performance-based equity awards do not refer to non-qualified stock
options/3/ or performance-accelerated grants./4/ Instead,
performance-based equity awards are performance-contingent grants where
the individual will not receive the equity grant by not meeting the
target performance and vice versa.

The level of transparency and disclosure is at the highest level where
shareholders can understand the mechanics of the performance-based equity
awards based on the additional disclosure.

THREE-YEAR BURN RATE/BURN RATE COMMITMENT

Generally vote AGAINST plans if the company's most recent three-year burn
rate exceeds one standard deviation in excess of the industry mean (per the
following Burn Rate Table) and is over 2 percent of common shares outstanding.
The three-year burn rate policy does not apply to non-employee director plans
unless outside directors receive a significant portion of shares each year.

The annual burn rate is calculated as follows:

Annual Burn rate = (# of options granted + # of full value shares awarded *
Multiplier)/Weighted Average common shares outstanding)

If a company fails to fulfill its burn rate commitment, vote AGAINST or
WITHHOLD from the compensation committee.

- - --------
/3/ Non-qualified stock options are not performance-based awards unless the
grant or the vesting of the stock options is tied to the achievement of a
pre-determined and disclosed performance measure. A rising stock market
will generally increase share prices of all companies, despite of the
company's underlying performance.
/4/ Performance-accelerated grants are awards that vest earlier based on the
achievement of a specified measure. However, these grants will ultimately
vest over time even without the attainment of the goal(s).

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2008 US Proxy Voting Guidelines Summary

2008 BURN RATE TABLE

RUSSELL 3000 NON-RUSSELL 3000
-------------------- --------------------
STANDARD MEAN+ STANDARD MEAN+
GICS DESCRIPTION MEAN DEVIATION STDEV MEAN DEVIATION STDEV
- - ---- -------------------------------- ---- --------- ----- ---- --------- -----

1010 Energy 1.71% 1.39% 3.09% 2.12% 2.31% 4.43%
1510 Materials 1.16% 0.77% 1.93% 2.23% 2.26% 4.49%
2010 Capital Goods 1.51% 1.04% 2.55% 2.36% 2.03% 4.39%
2020 Commercial Services & Supplies 2.35% 1.70% 4.05% 2.20% 2.03% 4.23%
2030 Transportation 1.59% 1.22% 2.80% 2.02% 2.08% 4.10%
2510 Automobiles & Components 1.89% 1.10% 2.99% 1.73% 2.05% 3.78%
2520 Consumer Durables & Apparel 2.02% 1.31% 3.33% 2.10% 1.94% 4.04%
2530 Hotels Restaurants & Leisure 2.15% 1.18% 3.33% 2.32% 1.93% 4.25%
2540 Media 1.92% 1.35% 3.27% 3.33% 2.60% 5.93%
2550 Retailing 1.86% 1.04% 2.90% 3.15% 2.65% 5.80%
3010, 3020,
3030 Food & Staples Retailing 1.69% 1.23% 2.92% 1.82% 2.03% 3.85%
3510 Health Care Equipment & Services 2.90% 1.67% 4.57% 3.75% 2.65% 6.40%
3520 Pharmaceuticals & Biotechnology 3.30% 1.66% 4.96% 4.92% 3.77% 8.69%
4010 Banks 1.27% 0.88% 2.15% 1.07% 1.12% 2.19%
4020 Diversified Financials 2.45% 2.07% 4.52% 4.41% 5.31% 9.71%
4030 Insurance 1.21% 0.93% 2.14% 2.07% 2.28% 4.35%
4040 Real Estate 1.04% 0.81% 1.85% 0.80% 1.21% 2.02%
4510 Software & Services 3.81% 2.30% 6.11% 5.46% 3.81% 9.27%
4520 Technology Hardware & Equipment 3.07% 1.74% 4.80% 3.43% 2.40% 5.83%
4530 Semiconductors & Semiconductor
Equipment 3.78% 1.81% 5.59% 4.51% 2.30% 6.81%
5010 Telecommunication Services 1.57% 1.23% 2.80% 2.69% 2.41% 5.10%
5510 Utilities 0.72% 0.50% 1.22% 0.59% 0.66% 1.25%

For companies that grant both full value awards and stock options to their
employees, apply a premium on full value awards for the past three fiscal
years. The guideline for applying the premium is as follows:

ANNUAL STOCK PRICE VOLATILITY MULTIPLIER
- - ----------------------------- -----------------------------------------

54.6% and higher 1 full-value award will count as 1.5 option shares
36.1% or higher and less than 54.6% 1 full-value award will count as 2.0 option shares
24.9% or higher and less than 36.1% 1 full-value award will count as 2.5 option shares
16.5% or higher and less than 24.9% 1 full-value award will count as 3.0 option shares
7.9% or higher and less than 16.5% 1 full-value award will count as 3.5 option shares
Less than 7.9% 1 full-value award will count as 4.0 option shares

POOR PAY PRACTICES

Vote AGAINST or WITHHOLD from compensation committee members, CEO, and
potentially the entire board, if the company has poor compensation practices.
Vote AGAINST equity plans if the plan is a vehicle for poor compensation
practices.

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2008 US Proxy Voting Guidelines Summary

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RiskMetrics Group www.riskmetrics.com
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The following practices, while not exhaustive, are examples of poor
compensation practices that may warrant voting against or withholding votes:

. Egregious employment contracts:

. Contracts containing multi-year guarantees for salary increases,
bonuses, and equity compensation;

. Excessive perks:

. Overly generous cost and/or reimbursement of taxes for personal use
of corporate aircraft, personal security systems maintenance and/or
installation, car allowances, and/or other excessive arrangements
relative to base salary;

. Abnormally large bonus payouts without justifiable performance linkage
or proper disclosure:

. Performance metrics that are changed, canceled, or replaced during
the performance period without adequate explanation of the action and
the Link to performance;

. Egregious pension/SERP (supplemental executive retirement plan) payouts:

. Inclusion of additional years of service not worked that result in
significant payouts

. Inclusion of performance-based equity awards in the pension
calculation;

. New CEO with overly generous new hire package:

. Excessive "make whole" provisions;

. Any of the poor pay practices listed in this policy;

. Excessive severance and/or change-in-control provisions:

. Inclusion of excessive change-in-control or severance payments,
especially those with a multiple in excess of 3X cash pay;

. Severance paid for a "performance termination," (i.e., due to the
executive's failure to perform job functions at the appropriate
level);

. Change-in-control payouts without loss of job or substantial
diminution of job duties (single-triggered);

. Perquisites for former executives such as car allowances, personal
use of corporate aircraft, or other inappropriate arrangements;

. Poor disclosure practices:

. Unclear explanation of how the CEO is involved in the pay setting
process;

. Retrospective performance targets and methodology not discussed;

. Methodology for benchmarking practices and/or peer group not
disclosed and explained;

. Internal Pay Disparity:

. Excessive differential between CEO total pay and that of next
highest-paid named executive officer (NEO);

. Options backdating (covered in a separate policy);

. Other excessive compensation payouts or poor pay practices at the
company.

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2008 US Proxy Voting Guidelines Summary

SPECIFIC TREATMENT OF CERTAIN AWARD TYPES IN EQUITY PLAN EVALUATIONS:

DIVIDEND EQUIVALENT RIGHTS

LIBERAL SHARE RECYCLING PROVISIONS

Under net share counting provisions, shares tendered by an option holder to
pay for the exercise of an option, shares withheld for taxes or shares
repurchased by the company on the open market can be recycled back into the
equity plan for awarding again. All awards with such provisions should be
valued as full-value awards. Stock-settled stock appreciation rights (SSAR5)
will also be considered as full-value awards if a company counts only the net
shares issued to employees towards their plan reserve.

OPTION OVERHANG COST

Companies with sustained positive stock performance and high overhang cost
(the overhang alone exceeds the allowable cap) attributable to in-the-money
options outstanding in excess of six years may warrant a carve-out of these
options from the overhang as long as the dilution attributable to the new share
request is reasonable and the company exhibits sound compensation practices.
Consider, on a CASE-BY-CASE basis, a carve-out of a portion of cost
attributable to overhang, considering the following criteria:

. PERFORMANCE: Companies with sustained positive stock performance will
merit greater scrutiny. Five-year total shareholder return (TSR),
year-over-year performance, and peer performance could play a
significant role in this determination.

. OVERHANG DISCLOSURE: Assess whether optionees have held in-the-money
options for a prolonged period (thus reflecting their confidence in the
prospects of the company). Note that this assessment would require
additional disclosure regarding a company's overhang. Specifically, the
following disclosure would be required:

. The number of in-the-money options outstanding in excess of six or
more years with a corresponding weighted average exercise price and
weighted average contractual remaining term;

. The number of all options outstanding less than six years and
underwater options outstanding in excess of six years with a
corresponding weighted average exercise price and weighted average
contractual remaining term;

. The general vesting provisions of option grants; and

. The distribution of outstanding option grants with respect to the
named executive officers;

. DILUTION: Calculate the expected duration of the new share request in
addition to all shares currently available for grant under the equity
compensation program, based on the company's three-year average burn
rate (or a burn-rate commitment that the company makes for future
years). The expected duration will be calculated by multiplying the
company's unadjusted (options and full-value awards accounted on a
one-for-one basis) three-year average burn rate by the most recent
fiscal year's weighted average shares outstanding (as used in the
company's calculation of basic EPS) and divide the sum of the new

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2008 US Proxy Voting Guidelines Summary

share request and alt available shares under the company's equity
compensation program by the product. For example, an expected duration
in excess of five years could be considered problematic; and

. Compensation Practices: An evaluation of overall practices could
include: (1) stock option repricing provisions, (2) high concentration
ratios (of grants to top executives), or (3) additional practices
outlined in the Poor Pay Practices policy.

OTHER COMPENSATION PROPOSALS AND POLICIES

401(K) EMPLOYEE BENEFIT PLANS

Vote FOR proposals to implement a 401 (k) savings plan for employees.

ADVISORY VOTE ON EXECUTIVE COMPENSATION (SAY-ON-PAY) MANAGEMENT PROPOSALS

Vote CASE-BY-CASE on management proposals for an advisory vote on executive
compensation. Vote AGAINST these resolutions in cases where boards have failed
to demonstrate good stewardship of investors' interests regarding executive
compensation practices. The following principles and factors should be
considered:

1. The following five global principles apply to all markets:

. Maintain appropriate pay-for-performance alignment with emphasis on
long-term shareholder value: This principle encompasses overall
executive pay practices, which must be designed to attract, retain, and
appropriately motivate the key employees who drive shareholder value
creation over the long term. It will take into consideration, among
other factors: the linkage between pay and performance; the mix between
fixed and variable pay; performance goats; and equity-based plan costs;

. Avoid arrangements that risk "pay for failure": This principle addresses
the use and appropriateness of long or indefinite contracts, excessive
severance packages, and guaranteed compensation;

. Maintain an independent and effective compensation committee: This
principle promotes oversight of executive pay programs by directors with
appropriate skills, knowledge, experience, and a sound process for
compensation decision-making (e.g., including access to independent
expertise and advice when needed);

. Provide shareholders with clear, comprehensive compensation disclosures:
This principle underscores the importance of informative and timely
disclosures that enable shareholders to evaluate executive pay practices
fully and fairly;

. Avoid inappropriate pay to non-executive directors: This principle
recognizes the interests of shareholders in ensuring that compensation
to outside directors does not compromise their independence and ability
to make appropriate judgments in overseeing managers' pay and
performance. At the market Level, it may incorporate a variety of
generally accepted best practices.

2. For U.S. companies, vote CASE-BY-CASE considering the following factors
in the context of each company's specific circumstances and the board's
disclosed rationale for its practices:

Relative Considerations:

. Assessment of performance metrics relative to business strategy, as
discussed and explained in the CD&A;

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2008 US Proxy Voting Guidelines Summary

. Evaluation of peer groups used to set target pay or award opportunities;

. Alignment of company performance and executive pay trends over time
(e.g., performance down: pay down);

. Assessment of disparity between total pay of the CEO and other Named
Executive Officers (NEOs).

Design Considerations:

. Balance of fixed versus performance-driven pay;

. Assessment of excessive practices with respect to perks, severance
packages, supplemental executive pension plans, and burn rates.

Communication Considerations:

. Evaluation of information and board rationale provided in CDELA about
how compensation is determined (e.g., why certain elements and pay
targets are used, and specific incentive plan goals, especially
retrospective goals);

. Assessment of board's responsiveness to investor input and engagement on
compensation issues (e.g., in responding to majority-supported
shareholder proposals on executive pay topics).

DIRECTOR COMPENSATION

Vote CASE-BY-CASE on compensation plans for non-employee directors, based on
the cost of the plans against the company's allowable cap.

On occasion, director stock plans that set aside a relatively small number
of shares when combined with employee or executive stock compensation plans
will exceed the allowable cap. Vote for the plan if ALL of the following
qualitative factors in the board's compensation are met and disclosed in the
proxy statement:

. Director stock ownership guidelines with a minimum of three times the
annual cash retainer.

. Vesting schedule or mandatory holding/deferral period:

- A minimum vesting of three years for stock options or restricted stock;
or

- Deferred stock payable at the end of a three-year deferral period.

. Mix between cash and equity:

- A balanced mix of cash and equity, for example 40% cash/60% equity or
50% cash/50% equity; or

- If the mix is heavier on the equity component, the vesting schedule or
deferral period should be more stringent, with the lesser of five years or
the term of directorship.