B-1 STATEMENT OF ADDITIONAL INFORMATION Dated May 1 ...

The Directors of the Fund exercise oversight of disclosure of portfolio holdings information by(i) overseeing the implementation and enforcement of the Holdings Disclosure Policy and Procedures, theCode of Ethics and other relevant compliance policies and procedures by the chief compliance officer ofthe Fund and its investment adviser; (ii) considering the annual compliance procedures report of theFund’s chief compliance officer pursuant to Rule 38a-1 under the 1940 Act; and (iii) considering whetherto approve or ratify any material amendments to the Holdings Disclosure Policy and Procedures.Notwithstanding the above, there is no guarantee that the Holdings Disclosure Policy andProcedures will protect the Fund and contract and policy owners from potential misuse of holdingsinformation by individuals or firms in possession of such information.ORGANIZATION AND CAPITAL STOCKThe Fund was incorporated in Maryland on December 22, 1983.The Fund issues a separate class of capital stock for each Portfolio. Each share of capital stockissued with respect to a Portfolio has a pro rata interest in the assets of that Portfolio and has no interest inthe assets of any other Portfolio. Each share of capital stock is entitled to one vote on all matterssubmitted to a vote of shareholders. Shares of a Portfolio will be voted separately, however, on mattersaffecting only that Portfolio, including approval of the Investment Advisory Agreement and changes infundamental investment policies of a Portfolio. The assets of each Portfolio are charged with the liabilitiesof the Portfolio and their proportionate share of the general liabilities of the Fund based on the relativeasset size of the Portfolios at the time the liabilities are incurred. All shares may be redeemed for cash atany time.All of the outstanding shares of each Portfolio are owned of record by Northwestern Mutual. Sharesof each Portfolio are presently being offered only to Northwestern Mutual and its separate investmentaccounts used for variable annuity contracts and variable life insurance policies. The shares held inconnection with certain of the separate investment accounts are voted by Northwestern Mutual inaccordance with instructions received from the owners of the variable annuity contracts and variable lifeinsurance policies. The shares held by Northwestern Mutual as general assets are voted by NorthwesternMutual in the same proportions as the shares held in connection with these separate investment accounts.If applicable laws, regulations or interpretations change so as to permit Northwestern Mutual to vote theFund shares in its own discretion, it may elect to do so.As stated above, the shares of the Fund are offered to separate investment accounts to fund bothvariable life insurance policies and variable annuity contracts. Because of differences in tax treatment orother considerations it is possible that the interests of variable life insurance policyowners, owners ofvariable annuity contracts or owners of other contracts that may participate in the Fund in the future mightat some time be in conflict. The Board of Directors of the Fund will monitor for any material conflicts anddetermine what action, if any, should be taken. Northwestern Mutual has agreed to be responsible, at itscost, to remedy or eliminate any irreconcilable material conflict up to and including establishing a newregistered management investment company and segregating the assets underlying the variable annuitycontracts and variable life insurance policies.The capital stock of the Fund is divided into twenty-seven classes corresponding to the twentysevenPortfolios of the Fund. Each class is preferred over the other classes with respect to the assets of theportfolio to which the class relates. Dividends and distributions, including distributions in the event ofliquidation, are payable only out of assets of the portfolio to which the class relates. All shares of theFund are entitled to vote on all matters submitted to a vote of the shareholders except that shares shall bevoted by class on matters concerning only that class, to approve an investment advisory agreement, toapprove changes in fundamental policies with respect to that class and when otherwise required by the1940 Act. Shares may be redeemed only for cash, except that capital stock of any class may be redeemedin kind with assets of the Portfolio to which the class relates if the Directors deem such action desirable.Each share is nonassessable and shareholders have no preemptive or conversion rights.B-61