NEW ENGLAND ZENITH FUND
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [x]
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Check the appropriate box:
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[_] Definitive Proxy Statement
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[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NEW ENGLAND ZENITH FUND
(Name of Registrant as Specified In Its Charter)
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or the Form or Schedule and the date of its filing.
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NEW ENGLAND ZENITH FUND
State Street Research Money Market Series
Salomon Brothers Strategic Bond Opportunities Series
Salomon Brothers U.S. Government Series
State Street Research Bond Income Series
Balanced Series
MFS Total Return Series
Alger Equity Growth Series
Capital Guardian U.S. Equity Series
Davis Venture Value Series
FI Mid Cap Opportunities Series
FI Structured Equity Series
Harris Oakmark Focused Value Series
Jennison Growth Series
Loomis Sayles Small Cap Series
MFS Investors Trust Series
MFS Research Managers Series
Zenith Equity Series
501 Boylston Street
Boston, MA 02116
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
April 25, 2003
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To the beneficial owners of shares of the series of New England Zenith Fund
referred to above (each a "Fund" and, collectively, the "Funds"):
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of each of the Funds, each a series of New England Zenith Fund, a
Massachusetts business trust, will be held at 2:00 p.m., Eastern Time, on April
25, 2003 at the offices of MetLife Advisers, LLC, 501 Boylston Street, Boston,
Massachusetts 02116, for the following purposes:
1. To be voted on separately by shareholders of each Fund: To vote upon
the approval of an Agreement and Plan of Reorganization, in the form
set forth in Appendix A to the attached Proxy Statement, for adoption
by each Fund, pursuant to which such Fund would reorganize as a series
of Metropolitan Series Fund, Inc., a Maryland corporation, as
described in Part 1 of the attached Proxy Statement.
2. To consider and act upon any other matters which may properly come
before the Meeting or any adjournment thereof.
Shareholders of record at the close of business on January 31, 2003 (the
"Record Date") are entitled to notice of, and to vote at, the Meeting.
Although you are not a shareholder of a Fund, as an owner of a variable
life insurance or variable annuity contract issued by separate accounts of New
England Life Insurance Company, Metropolitan Life Insurance Company, MetLife
Investors USA Insurance Company, General American Life Insurance Company or
other insurance companies affiliated with any of these insurance companies (the
"Insurance Companies"), you have the right to instruct your Insurance Company
how to vote at the Meeting. You may give voting instructions for the number of
shares of the Fund attributable to your life insurance policy or annuity
contract as of the Record Date.
By Order of the Board of Trustees,
Thomas M. Lenz, Secretary
Boston, Massachusetts
March 24, 2003
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YOUR VOTE IS IMPORTANT
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YOU ARE INVITED TO ATTEND THE MEETING. IF YOU DO NOT EXPECT TO ATTEND THE
MEETING, PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED VOTING INSTRUCTION
FORM PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. ALTERNATIVELY, YOU MAY VOTE
BY PHONE OR ON THE INTERNET BY FOLLOWING THE SIMPLE INSTRUCTIONS THAT APPEAR ON
THE ENCLOSED VOTING INSTRUCTION FORM.
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PROXY STATEMENT
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NEW ENGLAND ZENITH FUND
State Street Research Money Market Series
Salomon Brothers Strategic Bond Opportunities Series
Salomon Brothers U.S. Government Series
State Street Research Bond Income Series
Balanced Series
MFS Total Return Series
Alger Equity Growth Series
Capital Guardian U.S. Equity Series
Davis Venture Value Series
FI Mid Cap Opportunities Series
FI Structured Equity Series
Harris Oakmark Focused Value Series
Jennison Growth Series
Loomis Sayles Small Cap Series
MFS Investors Trust Series
MFS Research Managers Series
Zenith Equity Series
501 Boylston Street
Boston, MA 02116
Special Meeting of Shareholders
April 25, 2003
SOLICITATION OF PROXIES
The enclosed voting instruction form is solicited on behalf of the Board of
Trustees of New England Zenith Fund, a Massachusetts business trust (the "Zenith
Fund"), for use at a Special Meeting of Shareholders (the "Meeting") of each of
the series referred to above (each a "Fund" and, collectively, the "Funds"), to
be held at 2:00 p.m., Eastern Time, on April 25, 2003, at the offices of MetLife
Advisers, LLC, 501 Boylston Street, Boston, Massachusetts 02116, and at any
adjournment or postponement thereof, for the purposes set forth in the
accompanying Notice of Special Meeting of Shareholders (the "Notice").
Shareholders of record at the close of business on January 31, 2003 (the "Record
Date") are entitled to notice of, and to vote at, the
Meeting. The Notice, this Proxy Statement and the enclosed form of voting
instructions were first mailed on or about March 24, 2003.
This Proxy Statement is being furnished to owners of variable annuity
contracts and variable life insurance policies ("Contract Owners") who have
allocated value under their variable annuity contracts and variable life
insurance policies ("Variable Contracts") to separate accounts of their
insurance companies (the "Separate Accounts") that invest in the Funds. The
Separate Accounts invest in the Funds in accordance with instructions received
from Contract Owners. Contract Owners have indirectly invested in the Funds
through the Separate Accounts and have the right to instruct their insurance
companies how to vote shares of the Funds attributable to their Variable
Contracts.
If you execute and return your voting instruction form, but do not provide
voting instructions, your insurance company will vote the shares attributable to
you in accordance with the recommendations of the Board of Trustees. Your
insurance company will vote any shares for which it does not receive voting
instructions, and any shares which it holds for its own account, in
proportionately the same manner as shares for which it has received voting
instructions.
The Zenith Fund currently offers 17 series of shares of beneficial
interest, each of which represents a separate investment portfolio. Most of the
Funds offer three separate classes of shares, designated as Class A, Class B and
Class E shares. For purposes of voting on each proposal at the Meeting, Class A,
Class B and Class E shares of each Fund will be treated as one class of shares.
Shareholders of record of each Fund on the Record Date are entitled to one
vote for each dollar of the value of the shares of beneficial interest of the
Fund held as of that date.
Financial statements for each Fund are included in the Annual Report of the
Zenith Fund for the fiscal year ended December 31, 2002, which has been mailed
to shareholders. Shareholders may obtain copies of the Annual Report free of
charge by writing to New England Zenith Fund, 501 Boylston Street Boston, MA
02116, or by telephoning 1-800-356-5015.
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Summary of Proposal.
This Proxy Statement relates to and describes in detail a proposal to
approve reorganizations of each Fund into a corresponding fund of Metropolitan
Series Fund, Inc., a Maryland corporation (the "Met Fund"), on which the vote of
shareholders of each Fund is solicited.
1. APPROVAL OR DISAPPROVAL OF AGREEMENT
AND PLAN OF REORGANIZATION.
Overview.
It is proposed that each Fund be reorganized into a newly organized series
of the Met Fund. The Zenith Fund and the Met Fund are diversified registered
open-end management investment companies. This restructuring of the Funds is
part of an overall plan of the insurance companies in the Metropolitan Life
enterprise -- Metropolitan Life Insurance Company ("MetLife"), New England Life
Insurance Company, MetLife Investors USA Company and General American Life
Insurance Company (together, the "Insurance Companies") -- to streamline and
rationalize the investment offerings underlying variable life insurance and
variable annuity contracts offered by the Insurance Companies. The Zenith Fund
and the Met Fund already employ a common investment adviser (MetLife Advisers,
LLC) and have many of the same executive officers. Additionally, each Fund and
its corresponding series of the Met Fund have the same subadviser. However, the
Zenith Fund and the Met Fund are separate legal entities, organized under the
laws of different jurisdictions (Massachusetts and Maryland, respectively) and
have separate governing boards. The proposed reorganization would result in a
single surviving legal entity (the Met Fund) under the oversight of a single
board of directors. The Met Fund currently consists of twenty portfolios.
Management of the Zenith Fund believes that this more rational and less
complicated structure for the common governance and oversight of investment
portfolios that underlie a common set of variable annuity and life insurance
product offerings is appropriate and in the interests of Contract Owners.
The Trustees of the Zenith Fund (the "Trustees") have unanimously approved
the reorganization of each Fund into a newly created corresponding series (each
a "New Fund" and, collectively, the "New Funds")1 of the Met Fund (each a
"Reorganization" and, collectively, the "Reorganizations"). Each of the Funds
and the New Funds, other than the Harris Oakmark Focused Value Series and its
corresponding New Fund, is a diversified, open-end mutual fund. The Harris
Oakmark Focused Value Series and its corresponding New Fund are non-diversified,
open-end mutual funds that may hold fewer securities than the other Funds.
Shares of each Fund are currently offered only to separate accounts established
by the Insurance Companies. Each Insurance Company is the legal owner of shares
of the Funds and has the right to vote those shares at the Meeting.
_____________________
/1/ The Funds would retain their current names as series of the Met
Fund with the identifier "Portfolio" added in place of "Series" (for example,
the "Balanced Series" will reorganize into the "Balanced Fund").
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Although you are not a shareholder of the Funds, as an owner of a variable life
insurance or variable annuity contract issued by separate accounts of the
Insurance Companies, you have the right to instruct your Insurance Company how
to vote at the Meeting. Each Reorganization is proposed to be accomplished
pursuant to an Agreement and Plan of Reorganization providing for the transfer
of all of the assets of the Fund to the corresponding New Fund in exchange for
shares of the New Fund and for the assumption by the corresponding New Fund of
all of the liabilities of the Fund as described below. The completion of these
transactions will result in the liquidation of each Fund. A Reorganization will
not be consummated unless at least a majority of the outstanding shares of the
applicable Fund entitled to vote has approved the Reorganization.
Terms of the Plan.
Shareholders of each Fund are being asked to vote upon the approval of an
Agreement and Plan of Reorganization for their Fund (the "Plan," collectively
the "Plans") pursuant to which the Reorganizations would be consummated. The
following descriptions of the Plan and the features of the proposed
Reorganizations are qualified in their entirety by reference to the text of the
Plan, a form of which is set forth in Appendix A to this Proxy Statement.
The Plan provides, among other things, for the transfer of all the assets
attributable to each class of shares of each Fund to the corresponding New Fund
in exchange for (i) the assumption by the New Fund of all liabilities of the
Fund and (ii) shares of the same class of the New Fund ("New Shares"). The
Reorganizations will occur on the next business day after the time when the
assets of each Fund are valued for purposes of the Reorganizations (currently
scheduled to be the close of regular trading on the New York Stock Exchange on
April 25, 2003). The exchange, which will be effected on the basis of the net
asset value of each Fund, will be followed immediately by the distribution of
each class of the New Shares to the shareholders of such Fund in complete
liquidation of the Fund. After the Reorganizations, the Zenith Fund will be
terminated, and its affairs will be wound up in an orderly fashion.
Each Reorganization requires approval by the Fund's shareholders and
satisfaction of a number of other conditions, most of which may be waived
jointly by the Trustees and the Directors of the Met Fund (the "Directors") if,
in their judgment, the waiver will not have a material adverse effect on the
interests of the shareholders of the Funds and the New Funds. The closing of the
Reorganization of each Fund is subject to the conditions set forth in the Plan,
including the approval of the Reorganization by at least a majority of the
shares of the Fund entitled to vote.
The Plan may be terminated by the mutual agreement of the Zenith Fund and
the Met Fund. In addition, either the Met Fund or the Zenith Fund may at its
option terminate the Plan at or prior to the Closing Date (as defined in the
Plan): (a) 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; (b) if a condition
expressed in the Plan 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; or (c) if the Directors or the Trustees, as the
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case may be, determine that the termination of the Plan is in the best interests
of the shareholders of the Met Fund or Zenith Fund, respectively. If the
transactions contemplated by the Plan have not been substantially completed by
July 31, 2003, the Plan shall automatically terminate on that date unless a
later date is agreed to by both the Zenith Fund and the Met Fund.
MetLife or its affiliates will bear the costs of each Reorganization,
except for portfolio transaction costs incurred by the Funds in connection with
the purchase or sale of portfolio securities that are permitted investments of
the Funds and governmental fees required in connection with the registration or
qualification under applicable state and federal laws of the shares of the Met
Fund to be issued. The costs to be borne by MetLife or its affiliates will
include, among other costs, the costs of this Proxy Statement. In the event that
a Reorganization is not consummated, MetLife will bear all of the costs and
expenses incurred by both the Zenith Fund and the Met Fund in connection with
the proposed Reorganizations.
Investment Policies and Investment Restrictions.
The investment objectives and policies of the New Funds as reorganized
series of the Met Fund will be substantially the same as those in existence for
the Funds as series of the Zenith Fund.
Description of New Shares.
Class A, Class B and Class E shares of the New Funds will have
characteristics substantially the same as the corresponding classes of shares of
the Funds. Full and fractional New Shares will be issued to each Fund's
shareholders in accordance with the provisions of the Plan as described above.
The classes of shares are identical, except that Class E and Class B shares pay
fees under a distribution and services plan (Rule 12b-1 fees) of 0.15% and
0.25%, respectively, of average daily net assets of the respective class.
The Distributor; Certain Payments by the Distributor.
New England Securities Corporation ("NESC") serves as principal underwriter
for shares of the Funds. MetLife serves as principal underwriter for each series
of the Met Fund.
Under the Met Fund 12b-1 Plan, MetLife will be paid, at the same rate that
NESC is currently paid by the Funds, a distribution and services fee pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940
Act"), out of the assets attributable to the shares of certain classes of the
New Funds. Accordingly, the Class B shareholders of the New Funds will pay 12b-1
fees pursuant to the Met Fund 12b-1 Plan at the annual rate of 0.25% of the
assets attributable to the Class B shares, while the Class E shareholders will
pay 12b-1 fees at the annual rate of 0.15% of the assets attributable to Class E
Shares. Note that while the Met Fund 12b-1 fees are currently limited to
payments of 0.25% for Class B shares and 0.15% for Class E shares, the Met Fund
12b-1 Plan, like the Zenith Fund Distribution and Services Plan, allows for a
fee of up to 0.50% of average daily assets at the discretion of the relevant
fund's board.
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Fee Structure / Expenses.
The fees and expenses to which each New Fund will be subject after its
Reorganization will be substantially the same as those to which the
corresponding Fund is subject immediately before the Reorganization.
Federal Income Tax Consequences.
Provided that the contracts funded through the separate accounts of the
Insurance Companies qualify as annuity contracts under Section 72 of the
Internal Revenue Code of 1986, as amended (the "Code") or as life insurance
contracts under Section 7702 of the Code, each Reorganization will not create
any tax liability for owners of the contracts.
The closing of each Reorganization will be conditioned on receipt of an
opinion from Ropes & Gray to the effect that, on the basis of existing law under
specified sections of the Code, for federal income tax purposes:
. the Reorganization will constitute a reorganization within the meaning
of Section 368(a) of the Code, and the Fund and the corresponding New
Fund will each be a "party to the reorganization" within the meaning
of Section 368(b) of the Code;
. under Section 361 of the Code, no gain or loss will be recognized by
the Fund upon the transfer of its assets to the New Fund in exchange
for the New Shares and the assumption by the New Fund of the Fund's
liabilities, or upon the distribution of such New Shares to the
shareholders of the Fund;
. under Section 1032 of the Code, no gain or loss will be recognized by
the New Fund upon the receipt of the assets of the Fund in exchange
for the assumption of the obligations of the Fund and issuance of the
New Shares;
. under Section 362(b) of the Code, the tax basis of the assets of the
Fund acquired by the New Fund will be the same as the basis of those
assets in the hands of the Fund immediately prior to the transfer;
. under Section 1223(2) of the Code, the holding period of the assets of
the Fund in the hands of the New Fund will include the period during
which those assets were held by the Fund;
. under Section 354 of the Code, the Fund shareholders will recognize no
gain or loss upon exchange of their shares of the Fund for the New
Shares;
. under Section 358 of the Code, the aggregate tax basis of the New
Shares to be received by each shareholder of the Fund will be the same
as the aggregate tax basis of the shares of the Fund exchanged
therefor;
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. under Section 1223(l) of the Code, the holding period of the New
Shares received by each shareholder of the Fund will include the
holding period for the Fund shares exchanged for the New Shares;
provided such shares of the Fund were held as a capital asset on the
date of the exchange; and
. the New Fund will succeed to and take into account the items of the
Fund described in Section 381(c) of the Code, subject to the
conditions and limitations specified in Sections 381, 382, 383 and 384
of the Code and the regulations thereunder.
The opinion will be based on certain factual certifications made by
officers of the Zenith Fund and will also be based on customary assumptions. The
opinion is not a guarantee that the tax consequences of the Reorganizations will
be as described above.
Prior to the closing of the Reorganizations, the Funds will declare a
distribution, which, together with all previous distributions, will have the
effect of distributing to their shareholders all of their (i) excess investment
income excludable from gross income under Section 103 of the Code over
deductions disallowed under Sections 265 and 171 of the Code, (ii) investment
company taxable income (in each case computed without regard to the deduction
for dividends paid) and (iii) net realized capital gains, if any, through the
closing date.
Basis for the Trustees' Recommendation.
The Trustees, including all of the Trustees who are not "interested
persons," as defined in the 1940 Act (the "Independent Trustees"), voted
unanimously to approve the Reorganizations at a meeting held on December 12,
2002. The Directors of the Met Fund, including a majority of the Directors who
are not "interested persons," as defined in the 1940 Act (the "Independent
Directors"), voted unanimously to approve the Reorganizations at a meeting held
on February 4, 2003.
The Trustees considered each proposed Reorganization at meetings held on
November 14 and December 12, 2002, at which they met with representatives of the
Met Fund, MetLife and MetLife Advisers, LLC ("MetLife Advisers"). In addition,
the Independent Trustees met separately to consider the proposals on November 14
and December 12, 2002, and were represented throughout their deliberations by
counsel independent of the Zenith Fund, MetLife and MetLife Advisers.
In approving the Reorganizations, the Trustees determined that each
proposed Reorganization would be in the best interests of the relevant Fund and
its shareholders and that the interests of that Fund's shareholders would not be
diluted as a result of effecting the Reorganization. The principal factors
considered by the Trustees in recommending that shareholders approve the
Reorganizations were as follows:
. The Trustees believe that the Reorganizations will result in
operational benefits to shareholders. In particular, the Trustees
considered the redundancies and inefficiencies inherent in the current
fund structure and believe that a single legal entity rather than
multiple legal entities will enhance the ability of Fund officers,
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MetLife management and MetLife Advisers to provide effective,
efficient service to the Funds, the board and the shareholders.
. The Trustees were informed that the Reorganizations would eliminate
the risk of multiple fund boards reaching inconsistent outcomes on a
single type of business proposal within the MetLife enterprise.
. The Trustees were informed that the Reorganizations would, if
effected, result in a mutual fund complex consisting of thirty-six
portfolios and total anticipated assets in excess of $16.6 billion.
Elimination of certain duplicative expenses, and the ability to spread
certain fixed costs over a larger asset base, may result in certain
cost savings to the Funds, although these savings are not expected to
be material in relation to the total assets of the complex.
. The Trustees were informed that the proposed Reorganizations would
occur only if they could be accomplished without resulting in the
imposition of federal income taxes on any Fund or its shareholders.
. In addition, the Trustees received representations from MetLife to the
effect that MetLife Advisers or its affiliates would pay the costs
associated with the proposed Reorganizations (except for (i) portfolio
transaction costs incurred by the Funds in connection with the
purchase or sale of portfolio securities that are permitted
investments of the Funds and governmental fees required in connection
with the registration or qualification under applicable state and
federal laws of the shares of the Met Fund to be issued and (ii)
certain payments that would result in the disqualification of a Fund
as a regulated investment company under the Code). In connection with
their determination that the interests of each Fund's shareholders
would not be diluted as a result of its proposed Reorganization, the
Trustees noted that the shareholders of each Fund would receive shares
of the corresponding New Fund equal in value to the value of the
Fund's net assets as of the business day preceding the closing of its
Reorganization.
. The Trustees considered the experience and background of the Directors
and officers of the Met Fund, including the independence of the
Independent Directors. For more information on these Directors and
certain senior officers, see below under "2. Other Information - The
Met Fund."
. The Trustees considered that the investment objective, policies and
restrictions of each Fund are substantially the same as those of the
corresponding New Fund and that the Reorganizations will not cause any
change in the personnel managing the portfolio or to the investment
strategies and techniques utilized in the management of the
corresponding Fund's portfolio prior to its Reorganization. The
Trustees noted that the investment advisory and subadvisory agreements
of each New Fund were identical to the investment advisory and
subadvisory agreements of its corresponding Fund except for changes
necessary to reflect the change in parties. For these reasons, the
Trustees believe that an investment in shares of the New Fund will
provide
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shareholders with an investment opportunity substantially the same as
that afforded by the corresponding Fund immediately prior to its
Reorganization.
Required Shareholder Vote.
The affirmative vote of a majority of the outstanding shares of a Fund is
necessary for the approval of the proposed Reorganization for such Fund.
A shareholder of a Fund objecting to its proposed Reorganization is not
entitled under either Massachusetts law or the Agreement and Declaration of
Trust of the Zenith Fund (the "Zenith Declaration of Trust") to demand payment
for and an appraisal of his or her Fund shares if the Reorganization is
consummated over his or her objection. However, shareholders should be aware
that shares may be redeemed at any time prior to the consummation of the
Reorganizations. Contract Owners may exchange their investment in a Fund for an
investment in other investment options, as provided in their contracts, before
or after the Reorganizations.
If a proposed Reorganization is not approved by the shareholders of a Fund
or is not completed for any other reason, the Fund will continue to be managed
as a separate series of the Zenith Fund in accordance with its current
investment objective and policies, and the Trustees will consider such
alternatives as may be in the best interests of the Fund and its shareholders.
The Trustees of the Zenith Fund unanimously recommend that shareholders of
each Fund vote FOR approval of the proposed Reorganization of such Fund.
Principal Differences Between the Legal Structures of the Met Fund and the
Zenith Fund
Organization
The Met Fund is organized as a Maryland corporation and the Zenith Fund is
organized as a Massachusetts business trust. Except as otherwise noted below,
the provisions of Massachusetts law and the Zenith Declaration of Trust and
Bylaws (the "Zenith Bylaws") are substantially similar in material respects to
those of Maryland law and the Articles of Incorporation (the "Met Articles") and
Bylaws (the "Met Bylaws") of the Met Fund. Both the Zenith Fund and the Met Fund
are registered investment companies under the 1940 Act.
Shareholder Voting--Generally
Under Maryland law, the Met Articles and the Met Bylaws, shareholder voting
power is generally limited to electing directors, approving investment
management or sub-investment management agreements, ratifying the selection of
independent public accountants, approving distribution agreements, approving
amendments to the Met Articles, authorizing extraordinary corporate actions and
approving matters required to be submitted to a shareholder vote under the 1940
Act. The Met Articles provide that capital stock of the Met Fund that is issued,
outstanding and entitled to vote shall be voted in the aggregate, and not by
series or class, except when otherwise required by law or if the Directors, in
their sole discretion, determine that only one or more particular series or
classes is affected by the matter under consideration, in which case only
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the affected series or classes vote. Maryland law provides that a corporation's
charter may require a lesser proportion of votes of shareholders on matters than
otherwise required by Maryland law, but not less than a majority. Under the Met
Articles and the Met Bylaws, any corporate action to be taken by a shareholder
vote may be authorized by a majority of shareholders entitled to vote on the
matter, subject to applicable laws, regulations, or rules or orders of the
Securities and Exchange Commission (the "SEC").
Under the Zenith Declaration of Trust, shareholders have the power to vote
(i) for the election of Trustees, (ii) with respect to amendment of the Zenith
Declaration of Trust, (iii) to the same extent as the shareholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Zenith Fund or its shareholders, (iv) with
respect to the termination of the Zenith Fund or any series or class, (v) to
remove Trustees from office in certain circumstances and (vi) with respect to
such additional matters relating to the Zenith Fund as may be required by the
Zenith Declaration of Trust, the Zenith Bylaws or any registration with the SEC
or any state, or as the Trustees may consider necessary or desirable. The Zenith
Declaration of Trust states that on all matters submitted to a shareholder vote,
all shares of the Zenith Fund entitled to vote, except as provided by the Zenith
Bylaws, are voted in the aggregate as a single class except when (i) otherwise
required by the 1940 Act or when the Trustees determine that the matter affects
one or more series or classes materially differently, and (ii) when the matter
affects only the interests of one or more series or classes. Shareholders of any
particular series or class of the Zenith Fund are not entitled to vote on
matters that do not affect that series or class. Each whole share (or fractional
share) of the Zenith Fund outstanding on the record date is entitled to a number
of votes on any matter on which it is entitled to vote equal to the net asset
value of the share (or fractional share) in U.S. dollars determined at the
Record Date. For example, a share having a net asset value of $10.50 would be
entitled to 10.5 votes. Under the Zenith Declaration of Trust, as described
below, the required vote of shareholders depends on the action to be taken.
Shareholder Meetings
The Met Bylaws require an annual meeting of shareholders only in years in
which shareholder action is needed on any one or more of the following: (1) the
election of directors; (2) approval of an investment advisory agreement; (3)
ratification of the selection of independent auditors; and (4) approval of a
distribution agreement. The Zenith Fund is not required to hold an annual
meeting of shareholders. The Met Bylaws 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. In addition, the Met Bylaws allow for
shareholders to act by written consent in lieu of a meeting upon the written
consent signed by the holders of all outstanding stock having voting power. The
Zenith Declaration of Trust allows for shareholder meetings to be called by the
Trustees. The Zenith Declaration of Trust also allows shareholders to act
without a meeting upon the written consent of shareholders holding a majority of
the shares entitled to vote on the matter.
Quorums
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The Met Bylaws provide that a majority of the shares entitled to vote
constitutes a quorum at shareholder meetings. The Zenith Declaration of Trust
provides that 40% of shares entitled to vote constitutes a quorum at a
shareholder meetings. Unlike the Met Bylaws, which provide that one-third of the
Directors (but no fewer than two) constitutes a quorum for a meeting of
Directors, the Zenith Bylaws provide that a majority of Trustees constitutes a
quorum for a meeting of Trustees.
Removal of Trustees, Directors and Officers
Pursuant to Maryland law and the Met Bylaws, any Director may be removed
with or without cause at any meeting of shareholders at which a quorum is
present by the affirmative vote of a majority of the votes entitled to be cast.
The Zenith Declaration of Trust provides that a Trustee may be removed by a vote
of holders of two-thirds of the outstanding shares, either by a written
declaration filed with the Zenith Fund's custodian or at a meeting called for
such purpose. The Trustees must call such a meeting upon the written request of
holders of at least 10% of the outstanding shares.
Indemnification of Trustees, Directors and Officers
Pursuant to the Met Bylaws, the Met Fund shall indemnify current and former
directors and officers of the Met Fund to the extent permitted by Maryland law.
Under Maryland law, a corporation may indemnify any director against liabilities
for acts incurred by reason of service as a director unless it is established
that (i) the act or omission was material to the matter giving rise to the
proceeding and (a) was committed in bad faith or (b) was the result of active
and deliberate dishonesty, (ii) the director actually received an improper
personal benefit or (iii) in the case of a criminal proceeding, the director had
reasonable cause to believe the act or omission was unlawful. In addition,
indemnification may not be made (i) in a proceeding by or in the right of the
corporation where the director is found liable to the corporation (a "Corporate
Liability") or (ii) in a proceeding charging improper personal benefit where the
director is found to be liable because such benefit was improperly received,
whether or not involving action in the director's official capacity (a "Personal
Liability").
Maryland law also provides that indemnification is not payable by a
corporation unless a determination has been made that the director has met the
standard of conduct noted in the foregoing paragraph. Such determination may be
made by (i) a vote of a majority of a quorum of directors consisting of
directors not, at the time, parties to the proceedings, or, if such a quorum
cannot be obtained, then by a majority vote of a committee of the board
(designated by a majority of the board, in which designation directors who are
parties may participate) consisting solely of two or more directors not, at the
time, parties to such proceedings, (ii) special legal counsel selected by the
board or a committee as set forth in (i) above, or if the quorum of the full
board cannot be obtained and the committee cannot be established, by a majority
vote of the full board in which directors who are parties may participate, or
(iii) the stockholders. Upon the application of a director, a court may order
indemnification if it determines that (i) a director is entitled to
reimbursement because such director has been successful, on the merits or
otherwise,
-11-
in the defense of a proceeding in which such director has been determined to
have met the applicable standards of conduct or (ii) whether or not the director
has met the applicable standards of conduct, the director is entitled to
indemnification in view of all the relevant circumstances, provided that the
indemnification payment shall be limited to the director's expenses in cases
involving Corporate Liability or Personal Liability.
Other than for directors, the Met Fund is required to indemnify or advance
expenses only to the extent specifically approved by resolution of the Board of
Directors. In addition, no indemnification or advance payment is provided to
directors or officers who engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of duty. The Met Fund Bylaws also provide that
no advance payment is provided 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 Met 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 no reason to believe that the person will be
found to be entitled to the indemnification.
Similarly, under the Zenith Bylaws, the Zenith Fund shall indemnify current
and former Trustees and officers against all liabilities and expenses incurred
by reason of their service as a Trustee or officer of the Zenith Fund. The
Zenith Fund will not provide indemnification to any person: (i) adjudicated by a
court not to have acted in good faith in the reasonable belief that his or her
actions were in the best interests of the Zenith Fund, (ii) held to be liable
because of willful misfeasance, bad faith, gross negligence or reckless
disregard of duty, or (iii) in the event of a settlement, unless such settlement
is found to be in the best interests of the Zenith Fund by (a) a disinterested
majority of Trustees, (b) a majority of the disinterested Trustees (along with a
written opinion of independent legal counsel), (c) a disinterested person
selected by the Trustees (along with a written opinion of independent legal
counsel) or (d) a vote of a majority of the shareholders (not including the
person seeking indemnification). The Zenith Bylaws also provide that expenses
may be paid in advance so long as such amounts are repaid to the Zenith Fund if
it is determined that such payments are not authorized under such Bylaws. Also,
the Zenith Bylaws provide that the indemnification rights are not exclusive, and
do not affect any other rights to which persons seeking indemnification may be
entitled.
Personal Liability
Under Maryland law, shareholders have no personal liability for acts or
obligations of the corporation. Under Massachusetts law, shareholders of a
Massachusetts business trust, such as the Zenith Fund, could, under certain
circumstances, be held personally liable for the obligations of the trust.
However, the Zenith Declaration of Trust disclaims shareholder liability for
acts or obligations of the Zenith Fund, and requires that notice of such
disclaimer be given in each agreement, undertaking or obligation entered into or
executed by the Zenith Fund or the Trustees. The Zenith Declaration of Trust
provides that any shareholder held personally liable solely by reason of his or
her being or having been a shareholder of the Zenith Fund shall be indemnified
out of the property of the series (or attributable class) of which he or she is
or was a
-12-
shareholder for all such loss and expense. Thus, the risk of a shareholder's
incurring financial loss from shareholder liability is limited to circumstances
in which the Zenith Fund would be unable to meet its obligations. The likelihood
of such a circumstance is considered remote.
Termination
Under Maryland law, a corporation with stock outstanding may be voluntarily
dissolved by the affirmative vote of two-thirds of all the votes entitled to be
cast on the matter. However, the Met Articles provide that notwithstanding
Maryland law, any action by shareholders may be taken upon the vote of the
holders of a majority of the shares entitled to vote, so that the Met Fund may
be terminated upon a majority vote of its shareholders. A corporation with no
outstanding stock may be terminated upon the vote of the majority of its
directors.
Under the Met Articles, if, in the sole determination of the Board of
Directors, the continuation of the offering of a series or a class of the Met
Fund is no longer in the best interests of the Met Fund, the Met Fund may cease
offering such series or class and may, by a majority vote of the Board of
Directors, require the redemption of all outstanding shares of such series or
class upon thirty days' prior written notice to shareholders, subject to
applicable laws.
By contrast, the Zenith Declaration of Trust provides that the Zenith Fund
may be terminated at any time by a vote of at least 66 2/3% of the shares
entitled to vote, or by the Trustees by written notice to the shareholders. Any
series or class of the Zenith Fund may be terminated at any time by vote of at
least 66 2/3% of the shares of that series or class, or by the Trustees by
written notice to shareholders of that series or class. In addition, the Zenith
Declaration of Trust provides that at any time that there are no shares
outstanding of a particular series or class, the Trustees may amend the
Declaration of Trust to abolish the series or class.
Amendments
Maryland law generally provides that an amendment to the charter must be
ratified by a vote of at least two-thirds of all shareholders. However, the Met
Articles provide that notwithstanding Maryland law, any action by shareholders
may be taken by majority vote of the shares entitled to vote, so that the Met
Articles may be amended by a majority of the shareholders of the Met Fund. Also,
Maryland law provides that a majority of the board of directors may, without a
shareholder vote, (1) change the name of the corporation or (2) change the name
or par value of any class or series of the corporation's stock and the aggregate
par value of the corporation's stock. The Met Bylaws may be amended by a
majority shareholder vote, although certain provisions of the Met Bylaws may
also be amended by action of a majority of the Board of Directors without a
shareholder vote.
The Zenith Declaration of Trust may be amended by a vote of a majority of
the shares entitled to vote, although the Trustees may amend the Zenith
Declaration of Trust without a shareholder vote for the purpose of (i)
responding to or complying with any regulation, order, ruling or interpretation
of any governmental agency or law, or (ii) designating and establishing series
and classes. The Zenith Bylaws may be amended by action of a majority of the
Trustees.
-13-
Rights of Inspection
Under Maryland law, any shareholder of the Met Fund may inspect and copy
during usual business hours the Met Articles and the Met Bylaws and the minutes,
annual reports and voting trust agreements on file at the Met Fund's principal
office. Under Maryland law, shareholders owning at least 5% of the Met Fund's
shares who have been shareholders of record for at least six months also have
the right to inspect the books of account and stock ledger of the Met Fund and
request a statement of the Met Fund's affairs. Massachusetts law, the Zenith
Declaration of Trust and the Zenith Bylaws do not provide for any inspection
rights.
Distributions
Maryland law provides that a distribution may not be made by the Met Fund
if, after giving effect to it, (i) the Met Fund would not be able to pay its
indebtedness as such indebtedness becomes due in the usual course of business;
or (ii) the Met Fund's total assets would be less than the sum of the Met Fund's
total liabilities plus the amount that would be needed if the Met Fund were to
be dissolved at the time of the distribution to satisfy any preferential rights
upon dissolution of stockholders whose preferential rights on dissolution are
superior to those receiving the distribution. Massachusetts law, the Zenith
Declaration of Trust and the Zenith Bylaws contain no comparable restrictions.
Subadvisers
The Met Fund and the Zenith Fund each rely upon an exemptive order from the
SEC that permits MetLife Advisers to enter into new subadvisory agreements with
either a current or a new subadviser that is not an affiliate of MetLife
Advisers or the Met Fund or the Zenith Fund, as the case may be, without
obtaining shareholder approval. The Directors or the Trustees, as applicable,
must approve any new subadvisory agreements under the exemptive order, and the
Met Fund or the Zenith Fund must also comply with certain other conditions.
The exemptive order also permits the Met Fund and the Zenith Fund to
continue to employ an existing subadviser, or to amend an existing subadvisory
agreement, without shareholder approval after certain events that would
otherwise require a shareholder vote. Any new or amended subadvisory agreement
must be approved by the Directors or Trustees, as applicable. The Met Fund or
the Zenith Fund will notify shareholders of any subadviser changes and any other
event of which notification is required under the order.
-14-
2. OTHER INFORMATION
The Met Fund.
The Met Fund is a Maryland corporation registered as an investment company
under the 1940 Act. The Met Fund was organized on November 23, 1982. The
principal executive offices of the Met Fund are located at 501 Boylston Street,
Boston, Massachusetts 02116.
Directors and Officers. The business of the Met Fund is managed under the
direction of a Board of Directors. The Met Fund's Directors review actions of
the Met Fund's investment adviser and subadvisers, and decide upon matters of
general policy. The Met Fund's officers supervise the daily business operations
of the Met Fund. Each Director is responsible for overseeing all Portfolios of
the Fund. There is no limit to the term a Director may serve. The Directors and
senior officers of the Met Fund, their ages and a description of their principal
occupations during the past five years are listed below. Except as shown, each
Director's and officer's principal occupation and business experience for the
last five years have been with the employer(s) indicated, although in some cases
the Director may have held different positions with such employer(s). Unless
otherwise indicated, the business address of the persons listed below is 501
Boylston Street, Boston, Massachusetts 02116.
Interested Directors
Each Director below is an "interested person" (as defined by the 1940 Act)
in that Ms. Goggin is an employee, and Mr. Typermass, a former employee of, and
currently consulting to, MetLife, which is an affiliate of MetLife Advisers, the
investment adviser of the Fund.
- --------------------------------------------------------------------------------------------------------------------
Current Position(s) Principal occupations over past five years,
Name and address Age position(s) with held since including other directorships/(1)/
Met Fund
- --------------------------------------------------------------------------------------------------------------------
Anne M. Goggin 54 Director, Chairman 2002 Chief Counsel-Individual Business, MetLife;
Metropolitan Life of the Board, Trustee and Chairman of the Board, Zenith
Insurance Company President and Fund*; Senior Vice President and General
1 Madison Avenue Chief Executive Counsel, New England Financial ("NEF"); Chair
New York, NY 10010 Officer of the Board of Managers, President and Chief
Executive Officer, MetLife Advisers; Director,
NESC; formerly, General Counsel, Secretary and
Clerk, NESC, 1993-1999.
Arthur G. Typermass 65 Director 1998 Formerly, Senior Vice-President and
43 Chestnut Street Treasurer, MetLife, 1997-1998.
Garden City, NY 11530
- --------------------------------------------------------------------------------------------------------------------
-15-
Non-Interested Directors
Each Director below is not an "interested person" (as defined by the 1940
Act).
- --------------------------------------------------------------------------------------------------------------------
Current Position(s)
Name and address Age position(s) with held since Principal occupations over past five years/(1)/
Met Fund
- --------------------------------------------------------------------------------------------------------------------
Steve A. Garban+ 65 Director 1993 Formerly, Chief Financial Officer, Senior
The Pennsylvania State Vice President Finance and Operations and
University Treasurer, The Pennsylvania State University.
208 Old Main
University Park, PA 16802
- --------------------------------------------------------------------------------------------------------------------
Linda B. Strumpf 55 Director 2000 Vice President and Chief Investment Officer,
Ford Foundation Ford Foundation.
320 E. 43/rd/ Street
New York, NY 10017
- --------------------------------------------------------------------------------------------------------------------
Dean O. Morton+ 71 Director 1993 Formerly, Executive Vice President, Chief
3200 Hillview Avenue Operating Officer and Director,
Palo Alto, CA 94304 Hewlett-Packard Company.
- --------------------------------------------------------------------------------------------------------------------
Michael S. Scott Morton+ 65 Director 1993 Jay W. Forrester Professor of Management
Massachusetts Institute (Emeritus) at Sloan School of Management, MIT.
of Technology ("MIT")
50 Memorial Drive
Cambridge, MA 02138
- --------------------------------------------------------------------------------------------------------------------
Toby Rosenblatt+ 64 Director 2001 President, since 1999, and formerly, Vice
3409 Pacific Avenue President, Founders Investments, Ltd.
San Francisco, CA 94118
- --------------------------------------------------------------------------------------------------------------------
H. Jesse Arnelle 69 Director 2001 Counsel, Womble Carlyle Sandrie & Rice;
400 Urbano Drive formerly, Senior Partner, Arnelle, Hastie,
San Francisco, CA 94127 McGee, Willis and Greene.
- --------------------------------------------------------------------------------------------------------------------
Officers
- --------------------------------------------------------------------------------------------------------------------
Current Position(s)
Name and address Age position(s) with held since Principal occupations over past five years(1)
Fund
- --------------------------------------------------------------------------------------------------------------------
John F. Guthrie, Jr. 59 Senior Vice 2002 Manager and Senior Vice President, MetLife
MetLife Advisers, LLC President Advisers; Senior Vice President, Zenith Fund,
501 Boylston Street Since 1995; Vice President, NEF.
Boston, MA 02116
- --------------------------------------------------------------------------------------------------------------------
-16-
- --------------------------------------------------------------------------------------------------------------------
Current Position(s)
Name and address Age position(s) with held since Principal occupations over past five years/(1)/
Fund
- --------------------------------------------------------------------------------------------------------------------
Peter Duffy 47 Vice President and 2000 Senior Vice President, MetLife Advisers,
MetLife Advisers, LLC Treasurer since December 1998; Vice President, since
501 Boylston Street 2002, and Treasurer, since 1998, Zenith Fund;
Boston, MA 02116 Senior Vice President; NEF; formerly Senior
Vice President, New England Funds, L.P.
- --------------------------------------------------------------------------------------------------------------------
Thomas M. Lenz 44 Vice President and 2002 General Counsel and Secretary, MetLife
MetLife Advisers, LLC Secretary Advisers, since 1998; Assistant General
501 Boylston Street Counsel, MetLife; Vice President, since 2002,
Boston, MA 02116 and Secretary, since 1998, Zenith Fund;
formerly, Vice President, State Street Bank
and Trust Company.
- --------------------------------------------------------------------------------------------------------------------
David W. Allen 46 Senior Vice 2002 Head of Individual Life Product Management,
Metropolitan Life President MetLife; Senior Vice President, Zenith Fund,
Insurance Company since 2002.
501 Boylston Street
Boston, MA 02116
- --------------------------------------------------------------------------------------------------------------------
Hugh McHaffie 44 Senior Vice 2000 Senior Vice President, MetLife, since 1999;
Metropolitan Life President Senior Vice President, Zenith Fund, since
Insurance Company 2002; formerly Vice President, Manufacturers
501 Boylston Street Life North America.
Boston, MA 02116
- --------------------------------------------------------------------------------------------------------------------
Thomas C. McDevitt 47 Vice President 2002 Vice President, Zenith Fund, since 1995.
MetLife Advisers, LLC
501 Boylston Street
Boston, MA 02116
- --------------------------------------------------------------------------------------------------------------------
Daphne Thomas-Jones 47 Vice President 2000 Assistant Vice President, since 1998, and
Metropolitan Life formerly, Director, MetLife.
Insurance Company
One Madison Avenue
New York, NY 10010
- --------------------------------------------------------------------------------------------------------------------
* Indicates a directorship with a registered investment company or a company
subject to the reporting requirements of the Securities Exchange Act of
1934, as amended.
(1) Previous positions during the past five years with the Met Fund, MetLife,
MetLife Advisers, the Zenith Fund, New England Financial, New England
Funds, L.P., or NESC are omitted if not materially different.
(+) Serves as a trustee, director and/or officer of one or more of the
following companies, each of which has a direct or indirect advisory
relationship with MetLife Advisers or its affiliates: State Street Research
Financial Trust, State Street Research Income Trust, State Street Research
Money Market Trust, State Street Research Tax-Exempt Trust, State Street
Research Capital Trust, State Street Research Master Investment Trust,
State Street Research Equity Trust, State Street Research Securities Trust,
State Street Research Growth Trust and State Street Research Exchange Trust
(the "State Street Research Funds").
MetLife Advisers.
MetLife Advisers is the investment adviser to the Funds and the New Funds.
The address of MetLife Advisers is 501 Boylston Street, Boston, Massachusetts
02116.
-17-
NESC.
NESC provides mutual fund distribution services to registered investment
companies, including the Funds, and is an indirect wholly owned subsidiary of
NEF. NESC's address is 399 Boylston Street, Boston, MA 02116.
MetLife.
MetLife provides mutual fund distribution services to registered investment
companies, including the Met Fund. MetLife's address is One Madison Avenue, New
York, NY 10010.
Independent Public Accountants.
Deloitte & Touche LLP presently serves as independent public accountants
for the Zenith Fund and the Met Fund.
Expenses of Reorganizations/Proxy Solicitation.
MetLife or its affiliates will bear the costs of each Reorganization,
except for portfolio transaction costs incurred by the Funds in connection with
the purchase or sale of portfolio securities that are permitted investments of
the Funds and governmental fees required in connection with the registration or
qualification under applicable state and federal laws of the shares of the Met
Fund to be issued. The costs to be borne by MetLife or its affiliates will
include, among other costs, the costs of this Proxy Statement. In the event that
a Reorganization is not consummated, MetLife will bear all of the costs and
expenses incurred by both the Zenith Fund and the Met Fund in connection with
the proposed Reorganizations.
Notwithstanding any of the foregoing, expenses will in any event be paid by
the party directly incurring such expenses if and to the extent that the payment
by any other party of such expenses would result in the disqualification of the
first party as a "regulated investment company" within the meaning of Section
851 of the Code.
Outstanding Shares and Certain Ownership of Shares.
The Zenith Fund serves as the investment vehicle for variable insurance,
variable annuity and group annuity products of the Insurance Companies. Shares
of the Funds are available for purchase by separate accounts established by the
Insurance Companies and by Qualified Plans. Shares of the Funds are not offered
for direct purchase by the investing public. Shares of certain Funds are also
held by the Zenith Equity Series, one of the Funds. The Zenith Equity Series is
a fund of funds that currently invests approximately a third of its assets in
each of the Capital Guardian U.S. Equity Growth Series, Jennison Growth Series
and FI Structured Equity Series.
-18-
The number of shares of beneficial interest of each of the Funds issued and
outstanding as of the Record Date was as follows:
Number of Issued and
Name of Fund Class of Shares Outstanding Shares
------------ --------------- ------------------
State Street Research Money A 3,274,558.005
Market Series B 614,883.637
Salomon Brothers Strategic Bond A 10,743,496.660
Opportunities Series B 210.204
E 2,483,987.033
Salomon Brothers U.S. A 14,777,887.113
Government Series B 185.264
E 6,082,221.300
State Street Research Bond Income A 8,315.424.226
Series B 456,099.747
E 186,882.207
Balanced Series A 9,660,483.533
E 970,293.821
MFS Total Return Series A 1,102,895.081
B 67,813.796
Alger Equity Growth Series A 32,141,005.270
B 68.306
E 1,161,511.144
Capital Guardian U.S. Equity Series A 36,975,133.634
B 1,259,908.709
Davis Venture Value Series A 34,673,952.447
B 118.064
E 12,704,205.591
FI Mid Cap Opportunities Series A 280,134.709
B 125,032.512
E 396,709.506
FI Structured Equity Series A 3,896,601.633
B 49.468
E 48,629.019
Harris Oakmark Focused Value Series A 2,594,149.714
B 910,843.385
E 469,490.448
-19-
Jennison Growth Series A 37,987,317.383
B 8,908,259.627
Loomis Sayles Small Cap Series A 2,002,662.672
B 8.380
E 79,468.154
MFS Research Managers Series A 3,948,367.823
E 317,739.191
MFS Investors Trust Series A 3,040,871.302
B 2,118,194.928
E 706,420.842
Zenith Equity Series A 3,338,796.604
Record and Beneficial Ownership
The Insurance Companies have informed the Zenith Fund that, as of the
Record Date, there were no persons owning contracts which would entitle them to
instruct the Insurance Companies with respect to 5% or more of the voting
securities of any Fund. The Officers and Trustees of the Zenith Fund owned less
than 1% of the outstanding shares of any Fund.
Except as noted above with respect to the Zenith Equity Series, because the
Insurance Companies own 100% of the shares of the Zenith Fund, they may be
deemed to control (as that term is defined in the 1940 Act) the Zenith Fund.
Solicitation of Voting Instructions.
Voting instructions will be solicited primarily by mailing this Proxy
Statement and its enclosures, but may also be solicited through further
mailings, telephone calls, personal interviews or e-mail by Trustees or officers
of the Zenith Fund or by employees or agents of MetLife or its affiliates. The
Funds do not currently anticipate retaining a proxy solicitation firm to solicit
voting instructions for the Meeting, but may do so if deemed appropriate in
their discretion as the date of the Meeting approaches. Any such expense would
be borne by MetLife or its affiliates, as set forth in this Proxy Statement.
Voting Process
The shares of the Funds are currently sold to Insurance Companies as the
record owners for allocation to the corresponding investment divisions or
sub-accounts of certain of their separate accounts. Most of the shares of the
Funds are attributable to variable insurance and annuity contracts. Other
outstanding Fund shares are not attributable to variable insurance contracts,
because such shares are (a) attributable to the Insurance Company's assets in
one of the registered separate accounts, (b) held in a separate account that is
not registered as an investment company, or (c) held in the Insurance Company's
general account rather than in a separate account.
Record owners of shares of beneficial interest of each Fund as of the close
of business (4:00 p.m. Eastern Time) on January 31, 2003, will be entitled to
vote and may cast one vote for each dollar of the value of shares of the Fund
held as of that date.
-20-
In accordance with their understanding of current applicable law, the
Insurance Companies will vote the shares of the Funds that are attributable to
variable insurance or annuity contracts based on instructions received from
owners of such contracts that participate in the corresponding investment
divisions or sub-accounts of the separate accounts.
Shares of each Fund held in an investment division or sub-account of a
separate account attributable to variable insurance and annuity contracts for
which no timely instructions are received or that are not attributable to
variable insurance and annuity contracts will be represented at the Meeting by
the record owners and voted in the same proportion as the shares for which
voting instructions are received for all variable insurance and annuity
contracts participating in that investment division. The Zenith Fund has been
advised that Fund shares held in the general account or unregistered separate
accounts of the Insurance Companies will be represented at the Meeting by the
record owners and voted in the same proportion as the aggregate of (i) the
shares for which voting instructions are received and (ii) the other shares that
are voted in proportion to such voting instructions.
If an enclosed voting instruction form is completed, executed and returned,
it may nevertheless be revoked at any time before the Meeting by a written
revocation or later voting instruction form.
Date for Receipt of Shareholders' Proposals for Subsequent Meetings of
Shareholders.
The Zenith Declaration of Trust and Zenith Bylaws do not provide for annual
meetings of shareholders and the Zenith Fund does not currently intend to hold
such a meeting for holders of existing classes of shares in 2003. Shareholder
proposals for inclusion in a proxy statement for any subsequent meeting of the
Zenith Fund shareholders must be received by the Zenith Fund a reasonable period
of time prior to any such meeting. If the Reorganizations are accomplished in
their entirety, it is expected that the existence of the Zenith Fund will
terminate in 2003, after which there would be no subsequent meetings of the
shareholders of the Zenith Fund.
Other Matters.
The holders of 40% of the shares of each Fund outstanding on the Record
Date, present in person or represented by proxy, constitute a quorum for the
transaction of business at the Meeting. The total number of votes cast "for"
approval of the proposal will be counted for purposes of determining whether
sufficient affirmative votes have been cast on the proposal.
All shares represented by voting instruction forms that reflect abstentions
will be counted as present for purposes of determining whether sufficient
affirmative votes have been cast. All shares represented by voting instruction
forms that reflect abstentions will be counted as present for purposes of
determining the presence of a quorum. Assuming the presence of a quorum,
abstentions have the effect of a negative vote on the proposal.
In the event that a quorum is not present for purposes of acting on the
proposal, or if sufficient votes in favor of the proposal are not received by
the time of the Meeting, the Insurance Companies named in the voting
instructions may vote on those matters for which a
-21-
quorum is present and as to which sufficient affirmative votes have been
received, and may propose one or more adjournments of the Meeting with respect
to any proposal not so approved or adopted in order to permit further
solicitation of voting instruction forms. Any such adjournment will require the
affirmative vote of a majority of the shares that (1) are entitled to vote on
the proposal as to which adjournment is proposed and (2) are present in person
or represented by proxy at the session of the Meeting to be adjourned. The
Insurance Companies will vote in favor of such adjournment those voting
instruction forms that they are entitled to vote in favor of the proposal as to
which adjournment is proposed. They will vote against any such adjournment those
proxies required to be voted against such proposal as to which affirmative votes
have been received and will not vote any proxies that direct them to abstain
from voting on such proposal.
Although the Meeting is called to transact any other business that may
properly come before it, the only business that management intends to present or
knows that others will present is the Proposal referred to in the Notice of
Special Meeting and described in this Proxy Statement. Nevertheless,
shareholders are being asked on the enclosed voting instruction forms to
authorize the Insurance Companies to vote in accordance with their judgment with
respect to any additional matters that properly come before the Meeting and on
all matters incidental to the conduct of the Meeting.
March 24, 2003.
-22-
APPENDIX A
Form of
Agreement and Plan of Reorganization
-23-
Appendix A
MODEL
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated as
of __________, 2003 by and between (i) New England Zenith Fund (the "Acquired
Trust"), a Massachusetts business trust established under an Agreement and
Declaration of Trust dated December 16, 1986, as amended and restated and in
effect on the date hereof, on behalf of the [Fill In Name of Acquired Fund] (the
"Acquired Fund"), a series of the Acquired Trust, and (ii) Metropolitan Series
Fund, Inc. (the "Acquiring Company"), a Maryland corporation formed on November
23, 1982, on behalf of the [Fill In Name of Acquiring Fund] (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"). 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 Acquired 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 (collectively, the "Obligations"). For the avoidance of doubt, it is hereby
expressly agreed that the Obligations include the obligation to indemnify any
person who shall at any time have served as a trustee or officer of the Acquired
Trust, to the full extent described in the Acquired Trust's By-laws as in effect
on the date of this Agreement and permitted by applicable law, provided,
however, that any findings, determinations or appointments relating to any such
indemnification that are made after the Closing Date (as defined below) and that
under the Acquired Trust's By-laws would be made by the trustees of the Acquired
Trust (or a committee or sub-group thereof) shall instead be made by the
directors of the Acquiring Company (or a similar committee or sub-group
thereof). It is hereby further expressly agreed that such indemnification
obligation shall extend to claims made and losses, damages and costs incurred
after the Closing Date but arising from actions or omissions occurring before
the Closing Date (including but not limited to actions or omissions relating to
this Agreement, the transactions contemplated hereby and the approval thereof by
the trustees and officers of the Acquired Fund).
(c) The Acquiring Fund will issue and deliver to the Acquired Fund in
exchange for such assets and the assumption of such liabilities the number of
full and fractional [Class A shares, Class B shares and Class E shares] of the
Acquiring Fund equal to the number of, and having an aggregate net asset value
equal to that of, the full and fractional [Class A share, Class B share and
Class E shares] of the Acquired Fund, computed in the manner and as of the time
and date set forth in paragraph 2.1 (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"). 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 Acquiring Shares of any class which the number of
shares of such 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, which shall have been reviewed by Deloitte & Touche LLP 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 Acquired Trust's
Declaration of Trust and the laws of the Commonwealth of Massachusetts, 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 shares of each class
of the Acquired Fund shall be equal to the net asset value of such shares 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 Acquired Trust.
3. CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be on April 28, 2003 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 [MetLife Advisers, LLC, located at 501 Boylston
Street, Boston, Massachusetts,] 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
-2-
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 [Fill In Name of
Acquiring Fund], a series of the 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 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 Acquired 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 Acquired 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 Acquired 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 Acquired Trust is a business trust duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and has the power to own all of its property and assets and to
conduct its business as currently conducted;
(b) The Acquired 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 (the "SEC") 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 Acquired Trust and the
1940 Act;
(c) The Acquired 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 Acquired 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 Acquired 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
-3-
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, the statement of operations,
the statement of changes in net assets and the schedule of investments as at and
for the two years ended December 31, 2002, of the Acquired Fund, audited by
Deloitte & Touche LLP, copies of which have been furnished to the Acquiring
Fund, fairly reflect the financial condition and results of operations of the
Acquired Fund as of such dates and the results of its operations 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, 2002;
(g) Since December 31, 2002, 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 or any assessments received by the Acquired Fund
shall have been paid so far as due and adequate 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 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 the requirements of
Subchapter M of the Code for treatment as a "regulated investment company"
within the meaning of Section 851 of the Code. Neither the Acquired 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,
except as previously disclosed in writing to and accepted by the Acquiring Fund.
The Acquired Fund has duly filed all federal, state, local and foreign tax
returns which are required to have been filed, and all taxes of the Acquired
Fund which are due and payable have been paid except for amounts that alone or
in the aggregate would not reasonably be expected to have a material adverse
effect. 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 capital
stock 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. For all taxable years and all applicable quarters of the
Acquired Fund from the date of its inception, the assets of the Acquired Fund
have been sufficiently diversified that each segregated asset account investing
all its assets in the Acquired Fund was adequately diversified within the
meaning of Section 817(h) of the Code and applicable regulations thereunder;
(j) The authorized capital of the Acquired Trust consists of an unlimited
number of shares of beneficial interest, no par value, of such number of
different series as the Board of Trustees of the Acquiring Trust may authorize
from time to time. The outstanding shares of beneficial interest in the Acquired
Fund are, and at the Closing Date will be, divided into [Class A shares, Class B
shares and Class E shares], each having the characteristics described in the
Acquired Fund's 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), nonassessable 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 its prospectus and statement
of
-4-
additional information as in effect from time to time, 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 Acquired 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 referred to in paragraph 5.7 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 Acquired 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, 2002, 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 "diversified" within the meaning of Section 5(b)(1)
of the 1940 Act and in compliance with such other 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 Acquired Fund, as amended through the Closing Date;
(r) No registration of any of the Investments under the Securities 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; and
(s) The definitive Proxy Statement of the Acquired Fund referred to in
Section 5.3 hereof, as filed with the SEC under the under the 1934 Act, and
relating to the meeting of the Acquired Fund's shareholders referred to in
Section 5.2 hereof (together with the documents incorporated therein by
reference, the "Proxy Statement"), on the date of such filing (i) complied in
all material respects with the provisions of the 1934 Act and the 1940 Act and
the rules and regulations thereunder and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
at the time of the shareholders meeting referred to in Section 5.2 hereof and on
the Closing Date, the Proxy Statement will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to
-5-
make the statements therein not misleading; provided, however, that none of the
representations and warranties in this paragraph shall apply to statements in or
omissions from the Proxy Statement made in reliance upon and in conformity with
information furnished by the Acquiring Fund for use in the Proxy Statement.
4.2 The Acquiring Company, on behalf of the Acquiring Fund, represents and
warrants the following to the Acquired Trust and to the Acquired Fund as of the
date hereof, as applicable, 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 SEC 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 prospectus and statement of additional information of the
Acquiring Fund (collectively, as amended or supplemented from time to time, the
"Acquiring Fund Prospectus") when filed with the SEC will conform in all
material respects with the applicable requirements of the 1933 Act and the rules
and regulations of the SEC thereunder and will 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 the Acquiring Fund Prospectus or in the registration statement of which it
is a part;
(d) The Acquiring Fund has no operations or assets other than in
connection with its organization and the transactions contemplated by this
Agreement;
(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, if any,
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 Acquiring Fund was established by the Board of Directors of the
Acquiring Company in order to effect the transaction described in this
Agreement. The Acquiring Fund has not yet filed its first federal income tax
return and, thus, has not yet elected to be treated as a "regulated investment
company" for federal income tax purposes. However, upon filing its first income
tax return at the end of its first taxable year, the Acquiring Fund intends to
elect to be a "regulated investment company" and until such time intends to take
all steps to ensure that it qualifies for taxation as a "regulated investment
company" and that the assets of the Acquiring Fund will be sufficiently
diversified so that each segregated asset account investing all its assets in
the Acquiring Fund is adequately diversified within the meaning of Section
817(h) of the Code and applicable regulations thereunder;
(h) The authorized capital of the Acquiring Company consists of [3
billion] shares of common stock, par value of $0.01 per share, of which _____
shares are authorized for the Acquiring Fund. The outstanding shares in the
Acquiring Fund are, and at the Closing Date will be, divided into [Class A
shares, Class B shares and Class E shares], each 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 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);
-6-
(i) 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;
(j) 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 shares, Class B shares or Class E shares, as the case may be, in the
Acquiring Fund, and will be fully paid and non-assessable by the Acquiring
Company, and no shareholder of the Acquiring Company will have any preemptive
right of subscription or purchase in respect thereof;
(k) The information to be furnished by the Acquiring Fund for use in the
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
(l) 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 Acquired
Trust, on behalf of the Acquired Fund, each hereby covenants and agrees with the
other as follows:
5.1 The Acquired Fund 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 may 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, file with the SEC
and distribute to its shareholders entitled to vote at such meeting a Proxy
Statement for such meeting 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 actions, 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.
5.7 The Acquiring Company will prepare and file a registration statement
under the 1933 Act to register the Acquiring Shares and under the 1940 Act (the
"Registration Statement") in compliance with the applicable requirements of the
1933 Act and the 1940 Act.
-7-
5.8 The Acquiring Company, on behalf of the Acquiring Fund, will name each
current Trustee and officer of the Acquired Trust, for a period of at least five
(5) years, as an insured under the Acquiring Company's directors and officers
insurance policy, the total coverage of which will be in an amount no less than
the amount of coverage provided from time to time to the Directors and officers
of the Acquiring Company for such period.
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 Acquired Trust a certificate executed in its name by its
President or Vice President and its Treasurer or Assistant Treasurer, in form
satisfactory to the Acquired 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 Acquired Trust shall have received a favorable opinion from Ropes
& Gray, counsel to the Acquiring Company, dated the Closing Date and in a form
satisfactory to the Acquired 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 corporate
power and authority necessary to own all of its properties and assets
and to carry on its business substantially as described in the Proxy
Statement and the Acquiring Fund is a separate series of the Acquiring
Company duly constituted in accordance with the applicable provisions
of the 1940 Act and the Articles of Incorporation of the Acquiring
Company; (b) this Agreement has been duly authorized, executed and
delivered on behalf of the Acquiring Fund and, assuming the Proxy
Statement referred to in paragraph 5.3 and the Registration Statement
referred to in paragraph 5.7 comply with all applicable provisions of
federal securities laws, this Agreement constitutes the valid and
binding obligation of the Acquiring Fund enforceable against the
Acquiring Fund 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 and general
principles of equity; (c) the Acquiring Fund has the power to assume
the liabilities to be assumed by it hereunder and upon consummation of
the transactions contemplated hereby the Acquiring Fund will have duly
assumed such liabilities; (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 shares, Class B shares and Class E shares of the Acquiring
Fund, assuming that as consideration for such shares not less than the
net asset value and the par 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 by the Acquiring Company on behalf of the Acquiring Fund
of this Agreement 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 United States
federal or Maryland state 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) after inquiry of officers of the Acquiring Company by
such counsel, but without having made any other investigation, there
is no legal or governmental proceeding relating to the Acquiring
Company or the Acquiring Fund on or before the date of mailing of the
Proxy Statement or the date hereof which is required to be described
in the Proxy Statement referred to in paragraph 5.3 which is not
disclosed therein; (h) the Acquiring Company is duly registered with
-8-
the SEC as an investment company under the 1940 Act; and (i) to the
knowledge of such counsel, after having made inquiry of officers of
the Acquiring Company but without having made any other investigation,
there is no litigation or administrative proceeding or investigation
of or before any court or governmental body presently pending or
threatened as to the Acquiring Company or the Acquiring Fund or any of
their respective properties or assets that places in question the
validity or enforceability of, or seeks to enjoin the performance of,
the Acquiring Company's obligations under this Agreement, and 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 either of
their respective businesses.
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 Acquired 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 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 Acquired Trust and the Acquired Fund have complied with all the
covenants and agreements and satisfied all of the conditions on their part 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
Ropes & Gray, dated the Closing Date and in a form satisfactory to the Acquiring
Company, to the following effect:
(a) The Acquired Trust is a business trust duly organized and validly
existing under the laws of the Commonwealth of Massachusetts and has the power
and authority necessary to own all of its properties and assets and to carry on
its business substantially as described in the Acquired Fund Prospectus and the
Proxy Statement and the Acquired Fund is a separate series of the Acquired Trust
duly constituted in accordance with the applicable provisions of the 1940 Act
and the Declaration of Trust and By-laws of the Acquired Trust; (b) this
Agreement has been duly authorized, executed and delivered on behalf of the
Acquired Fund and, assuming the Proxy Statement referred to in paragraph 5.3
complies with all applicable provisions of federal securities laws, this
Agreement constitutes the valid and binding obligation of the Acquired Fund
enforceable against the Acquired Fund 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 and general
principles of equity; (c) the Acquired Fund has the power to sell, assign,
transfer and deliver the assets to be transferred by it under this Agreement,
and, upon consummation of the transactions contemplated by this Agreement, the
Acquired Fund will have duly transferred such assets to the Acquiring Fund; (d)
the execution and delivery by the Acquired Trust on behalf of the Acquired Fund
of this Agreement did not, and the performance by the Acquired Trust and the
Acquired Fund of their respective obligations hereunder will not, violate the
Acquired Trust's Declaration of Trust or By-laws, or any provision of any
agreement known to such counsel to which the Acquired 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 Acquired 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
United States federal or Massachusetts state court or governmental authority is
required for the consummation by the Acquired 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) after
inquiry of officers of the Acquired Trust by such counsel, but without having
made any other investigation, there is no legal or governmental proceeding
relating to the Acquired Trust or the Acquired Fund on or before the date of
mailing of the Proxy Statement or the date hereof which is required to be
described in such Proxy Statement which is not disclosed therein; (g) the
Acquired Trust is duly registered with the SEC as an investment company under
the 1940 Act; (h) to the knowledge of such counsel, after having made inquiry of
officers of the Acquired Trust but without having made any other investigation,
there is no litigation or administrative proceeding or investigation of or
before any court or governmental body presently pending or threatened as to the
Acquired Trust or the Acquired Fund or any of their respective properties or
assets that places in question the validity or enforceability of, or seeks to
enjoin the performance of ,the Acquired Trust's obligations under this
Agreement, and neither the Acquired Trust
-9-
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 either of their respective businesses; and (i) all issued and
outstanding shares of the Acquired Fund are validly 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 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, 2002 and signed pro forma tax returns for the period from December
31, 2002 to the Closing Date (which pro forma tax returns shall be furnished
promptly after the Closing Date).
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 (i) excess investment
income excludable from gross income under section 103 of the Code over
deductions disallowed under Sections 265 and 171 of the Code, (ii) investment
company taxable income for its taxable years ending on or after December 31,
2002 and on or prior to the Closing Date (in each case computed without regard
to any deduction for dividends paid), and (iii) all of its net capital gains
realized in each of its taxable years ending on or after December 31, 2002 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 Acquired 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 Acquired 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 preceding 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 SEC and of state blue sky and securities authorities) deemed necessary by
the Acquired 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 5.7 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 Acquired Trust and the Acquiring Company shall have received a
favorable opinion of Ropes & Gray satisfactory to the Acquired Trust and the
Acquiring Company substantially to the effect that, for federal income tax
purposes:
-10-
(a) The acquisition by the Acquiring Fund of the assets of the Acquired
Fund in exchange for the Acquiring Fund's assumption of the Obligations of the
Acquired Fund and issuance of the Acquiring Shares, followed by the distribution
by the Acquired Fund of such Acquiring Shares to the shareholders of the
Acquired Fund in liquidation of the Acquired Fund, all as provided in paragraph
1 hereof, will constitute a reorganization within the meaning of Section 368(a)
of the Code, and the Acquired Fund and the Acquiring 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 Acquired Fund (i) upon the
transfer of its assets to the Acquiring Fund in exchange for the Acquiring
Shares or (ii) upon the distribution of the Acquiring Shares to the shareholders
of the Acquired Fund as contemplated in paragraph 1 hereof;
(c) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund in exchange for the assumption of the
Obligations and issuance of the Acquiring Shares as contemplated in paragraph 1
hereof;
(d) The tax basis of the assets of the Acquired Fund acquired by the
Acquiring Fund will be the same as the basis of those assets in the hands of the
Acquired Fund immediately prior to the transfer, 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;
(e) The Acquired Fund Shareholders will recognize no gain or loss upon the
exchange of their shares of the Acquired Fund for the Acquiring Shares;
(f) The tax basis of the Acquiring Shares to be received by each Acquired
Fund Shareholder will be the same in the aggregate as the aggregate tax basis of
the shares of the Acquired Fund surrendered in exchange therefor;
(g) The holding period of the Acquiring Shares to be received by each
Acquired Fund Shareholder will include the period during which the shares of the
Acquired Fund surrendered in exchange therefor were held by such shareholder,
provided such shares of the Acquired Fund were held as a capital asset on the
date of the exchange; and
(h) The Acquiring Fund will succeed to and take into account the items of
the Acquired Fund described in Section 381(c) of the Code, subject to the
conditions and limitations specified in Sections 381, 382, 383 and 384 of the
Code and the regulations thereunder.
8.6 At any time prior to the Closing, any of the foregoing conditions of
this paragraph 8 may be waived jointly by the Board of Trustees of the Acquired
Trust and the Board of Directors of the Acquiring Company 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 in this paragraph 9, MetLife Advisers,
LLC, by countersigning this Agreement, agrees that it will bear any and all
costs and expenses of the transaction incurred by the Acquiring Fund and the
Acquired Fund, including without limitation portfolio transaction costs incurred
by the Acquiring Fund or the Acquired Fund in connection with the sale of
portfolio securities that are not permitted investments of the Acquiring Fund;
provided, however, that MetLife Advisers, LLC will not bear portfolio
transaction costs incurred by the Acquiring Fund or the Acquired Fund in
connection with the purchase or sale of portfolio securities that are permitted
investments of the Acquiring Fund or the Acquired Fund, as the case may be;
provided, further, that the Acquiring Fund will pay all governmental fees
required in connection with the registration or qualification of the Acquiring
Shares under applicable state and federal laws.
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.
-11-
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 Acquired 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 to the other 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, 1.4, 1.5, 1.6, 1.7, 3.4, 4.2(g), 5.8, 7.3, 9, 10, 13
and 14.
11. TERMINATION.
11.1 This Agreement may be terminated by the mutual agreement of the
Acquiring Company and the Acquired Trust. In addition, either the Acquiring
Company or the Acquired 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; or
(c) 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.
11.2 If the transactions contemplated by this Agreement have not been
substantially completed by July 31, 2003, this Agreement shall automatically
terminate on that date unless a later date is agreed to by both the Acquired
Trust and the Acquiring Company.
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
Acquired 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
courier, telecopy or certified mail addressed to: (i) New England Zenith Fund,
501 Boylston Street, Boston, MA 02116, attn: Secretary; or (ii) Metropolitan
Series Fund, Inc., 501 Boylston Street, Boston, MA 02116, 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.
-12-
14.3 This Agreement shall be governed by and construed in accordance with
the domestic substantive laws of the Commonwealth of Massachusetts, 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 Declaration of Trust of the Acquired Trust is on file
with the Secretary of State of the Commonwealth of Massachusetts and the
Articles of Incorporation of the Acquiring Company are on file with the
Secretary of State of the State of Maryland, and notice is hereby given that no
trustee, director, officer, agent or employee of either the Acquired Trust or
the Acquiring Company 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 Acquired 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.
NEW ENGLAND ZENITH FUND,
on behalf of its _________
By: _______________________________
Name: _____________________________
Title: ____________________________
ATTEST:
By: _____________________________________
Name: ___________________________________
Title: __________________________________
METROPOLITAN SERIES FUND, INC.,
on behalf of its ___________
By: _______________________________
Name: _____________________________
Title: ____________________________
ATTEST:
By: ____________________________________
Name: __________________________________
Title: _________________________________
-13-
Agreed and accepted as to paragraph
9 only:
MetLife Advisers, LLC
By: _______________________________
Name: _____________________________
Title: ____________________________
ATTEST:
By: ____________________________________
Name: __________________________________
Title: _________________________________
-14-
- -------------------------------------------------------------------------------------------------
3 EASY WAYS TO VOTE NEW ENGLAND ZENITH FUND
501 Boylston Street
1. Automated Touch Tone Voting: Call toll-free Boston, Massachusetts 02116
1-800-[_] and use the control number shown
below. VOTING INSTRUCTION FORM FOR THE
Special Meeting of Shareholders
2. Return this Voting Instruction Form using the April 25, 2003, 2:00 p.m.
enclosed postage-paid envelope to [address].
3. Visit our website at [www.proxyvote.com] to
vote electronically.
NOTE: If you vote by phone or electronically,
the Fund or its agent will use reasonable
procedures (such as requiring an
identification number) to verify the
authenticity of the vote cast.
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
*** CONTROL NUMBER ***
- -------------------------------------------------------------------------------------------------
NEW ENGLAND ZENITH FUND
State Street Research Money Market Series
Salomon Brothers Strategic Bond Opportunities Series
Salomon Brothers U.S. Government Series
State Street Research Bond Income Series
Balanced Series
MFS Total Return Series
Alger Equity Growth Series
Capital Guardian U.S. Equity Series
Davis Venture Value Series
FI Mid Cap Opportunities Series
FI Structured Equity Series
Harris Oakmark Focused Value Series
Jennison Growth Series
Loomis Sayles Small Cap Series
MFS Investors Trust Series
MFS Research Managers Series
Zenith Equity Series
The undersigned hereby instructs New England Life Insurance Company,
Metropolitan Life Insurance Company, MetLife Investors USA Insurance Company,
General American Life Insurance Company (the "Companies") to vote the shares of
each of the series of New England Zenith Fund ("Zenith Fund") named above (each
a "Fund") as to which the undersigned is entitled to give instructions at the
Special Meeting of Shareholders of the Funds to be held at the offices of New
England Zenith Fund, 501 Boylston Street, Boston, Massachusetts 02116, at 2:00
p.m. Eastern Time on April 25, 2003 and at any adjournments thereof.
The Companies and the Board of Trustees of the Zenith Fund solicit your voting
instructions and recommend that you instruct the Insurance Companies to vote
"FOR" the Proposal. The Companies will vote the appropriate number of Fund
shares pursuant to the instruction given. If no instruction is set forth on a
returned form as to the Proposal, the Companies will vote FOR the Proposal. The
Companies are authorized to vote in their discretion upon such other business as
may properly come before the meeting and any adjournment thereof.
Date ______________, 2003
PLEASE SIGN IN BOX BELOW
___________________________________
___________________________________
___________________________________
___________________________________
Signature - Please sign exactly as
your name appears at left. Joint
owners each should sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If
a corporation, please sign in full
corporate name by president or
authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
Please fold and detach card at perforation before mailing.
TO VOTE FOR, AGAINST OR ABSTAIN FROM VOTING ON THE PROPOSAL, CHECK THE
APPROPRIATE BOX BELOW.
- --------------------------------------------------------------------------------------------
To approve or disapprove the Agreements and Plans of FOR AGAINST ABSTAIN
Reorganization with respect to ALL SERIES of the New [_] [_] [_]
England Zenith Fund by the corresponding series of
the Metropolitan Series Fund, Inc.:
- - OR -
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
To approve or disapprove the Agreement and Plan of
Reorganization with respect to the acquisition of
the series of New England Zenith Fund listed below
(the "Series") by the corresponding series of
Metropolitan Series Fund, Inc.:
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
State Street Research Money Market Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
Salomon Brothers Strategic Bond Opportunities [_] [_] [_]
Series
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
Salomon Brothers U.S. Government Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
State Street Research Bond Income Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
Balanced Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
MFS Total Return Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
Alger Equity Growth Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
Davis Venture Value Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
FI Mid Cap Opportunities Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
FI Structured Equity Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
Harris Oakmark Focused Value Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
Jennison Growth Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
Loomis Sayles Small Cap Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
MFS Investors Trust Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
MFS Research Managers Series [_] [_] [_]
- --------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------------------
Zenith Equity Series [_] [_] [_]
- --------------------------------------------------------------------------------------------