<PAGE>
Rule 485(b)
Registration No. 2-39334
File No. 811-2224
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. _______ [ ]
Post-Effective Amendment No. 37 [X]
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 22 [X]
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MML SERIES INVESTMENT FUND
--------------------------
(Exact Name of Registrant Specified in Charter)
1295 State Street, Springfield, Massachusetts 01111
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code: (413) 788-8411
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Name and Address of Agent for Service:
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Stephen L. Kuhn, Esq.
Vice President and Secretary
MML Series Investment Fund
1295 State Street
Springfield, MA 01111
Approximate Date of Proposed Public Offering: October 22, 1997
It is proposed that this filing will become effective (check appropriate line)
[X] immediately upon filing pursuant to paragraph (b)
[ ] on [date] pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on [date] pursuant to paragraph (a)(1) of rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on [date] pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
STATEMENT PURSUANT TO RULE 24F-2
Registrant has registered an indefinite number or amount of its shares under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act
of 1940. The Registrant will file a Rule 24f-2 Notice with respect to
Registrant's fiscal year ended December 31, 1996 on or about February 28, 1997.
The Index to Exhibits is located at Page 1 of Part C (Item 24(b)).
<PAGE>
TO: THE SECURITIES AND EXCHANGE COMMISSION
Registrant submits this Post-Effective Amendment No. 37 to its Registration
Statement No. 2-39334 under the Securities Act of 1933 and this Amendment No. 22
to its Registration Statement No. 811-2224 under the Investment Company Act of
1940. This Post-Effective Amendment relates solely to the MML Equity Index Fund.
No information relating to any other series of Registrant is amended or
superseded hereby.
<PAGE>
MML SERIES INVESTMENT FUND
CROSS-REFERENCE SHEET: MML EQUITY INDEX FUND
---------------------------------------------
ITEM NO. OF FORM N1-A PROSPECTUS LOCATION OR CAPTION
- ---------------------- ------------------------------
PART A
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1 Prospectus Cover Page
2 Prospectus Supplement
3(a) and (b) Not Applicable
3(c) Investment Performance
3(d) Not Applicable
4(a), (b) and (c) General Information; MML Equity Index Fund;
Investment Considerations and Risks;
Fundamental Investment Restrictions;
Appendix
5(a) Management of MML Trust
5(b), (d), (e), (f) and (g) The Advisers; Back Cover Page of Prospectus
5(c) Not Applicable
5A Not Applicable
6(a) and (b) General Information; Capital Shares
6(c) and (d) Not Applicable
6(e) Capital Shares
6(f) Dividends and Capital Gains Distributions
6(g) Tax Status; Dividends and Capital Gains
Distributions
6(h) Not Applicable
7 General Information; Sale and Redemption of
Shares
7(a) Not Applicable
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7(b) Net Asset Value
7(c)-(g) Not Applicable
8(a) Sale and Redemption of Shares
8(b)-(d) Not Applicable
9 Not Applicable
ITEM NO. OF FORM N-1A STATEMENT OF ADDITIONAL
- ---------------------- -----------------------
INFORMATION LOCATION OR CAPTION
-------------------------------
PART B
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10(a) and (b) Cover Page
11 Table of Contents
12 General Information
13(a) Investment Objective and Management Policies
13(b) Investment Restrictions
13(c) Investment Objective and Management Policies
13(d) Portfolio Transactions
14(a)-(c) Management of MML Trust
15(a)-(b) Control Persons and Principal Holders of
Securities
15(c) Management of MML Trust
16(a), (b), (c), (e), (h), (i) Management of MML Trust; Investment
Management and Other Services; Independent
Auditors
16(d), (g) Not Applicable
17(a), (c) Portfolio Transactions
17(b), (d) and (e) Not Applicable
18(a) Capital Shares
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18(b) Not Applicable
19(a) and (b) Purchase, Redemption and Pricing of
Securities Being Offered
19(c) Not Applicable
20 Certain Tax and Accounting Information
21 Not Applicable
22 Investment Performance
23 Financial Statements
PART C
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Information to be included in Part C is set forth under the appropriate item so
numbered, in part C of this Registration Statement.
<PAGE>
MASSMUTUAL EQUITY INDEX FUND
SUPPLEMENT DATED OCTOBER 22, 1997, TO THE
PROSPECTUS DATED MAY 1, 1997
The Prospectus is changed as follows:
1. The second sentence of the fourth paragraph of the cover page of the
Prospectus is replaced with the following:
Certain additional information about MML Trust and the Fund that a
prospective investor ought to know before investing is contained in a
Statement of Additional Information dated October 22, 1997, which has been
filed with the Securities and Exchange Commission and is incorporated by
reference.
2. The following section is hereby added after the Table of Contents.
FINANCIAL HIGHLIGHTS
The financial highlights set forth below are unaudited and should be read
in conjunction with the financial statements and notes thereto, which are
contained in the Statement of Additional Information. The Statement of
Additional Information may be obtained without charge by writing to the
Trust's Secretary.
MML Equity Index Fund
FINANCIAL HIGHLIGHTS
Selected per share data for a series share outstanding throughout the
period.
<TABLE>
<CAPTION>
PERIOD
ENDED
AUGUST 31, 1997*
(UNAUDITED)
---------
<S> <C>
Net asset value:
Beginning of period...................................................... $ 10.000
--------
Income from investment operations:
Net investment income...................................................... .05
Net realized and unrealized gain on investments............................ 1.21
--------
Total from investment operations........................................... 1.26
--------
Net asset value:
End of period............................................................ $ 11.26
========
Total return***............................................................ 12.60%
Net assets (in millions): End of period.................................... $ 22.54
Ratio of operating expenses to average net assets.......................... 0.21%**
Ratio of net investment income to average net assets....................... 0.45%**
Portfolio turnover rate.................................................... 0%
</TABLE>
* The Fund commenced operations on May 1, 1997.
** Percentages represent results for the period and are not annualized.
*** Total return information shown in the Financial Highlights table does
not reflect expenses that apply at the separate account level or to related
insurance products. Inclusion of these charges would reduce the total
return figure for the period shown.
3. The outside back cover page of the Prospectus is amended by deleting the
reference to MML Bay State Variable Life Separate Account I.
October 22, 1997
<PAGE>
PROSPECTUS
Dated May 1, 1997
MML EQUITY INDEX FUND
1295 State Street
Springfield, Massachusetts
(413) 788-8411
MML Series Investment Fund ("MML Trust") is a no-load, open-end, management
investment company having five separate series of shares, each of which has
different investment objectives and is designed to meet different investment
needs. This Prospectus relates only to one of the series, MML Equity Index Fund
(the "Fund").
MML Equity Index Fund - The Fund is a non-diversified series of MML Trust. The
Fund's investment objective is to provide investment results that correspond to
the price and yield performance of publicly traded common stocks in the
aggregate, as represented by the Standard & Poor's 500 Composite Stock Price
Index (the "Index"). As such, the Fund will invest in common stocks that
comprise the Index. While the Fund intends to invest in every stock of the
Index, there may be circumstances when the fund is not invested in every such
stock. The Fund is also permitted to invest in Standard & Poor's Depositary
Receipts ("SPDRs"). See "Appendix - Investment Techniques". In anticipation of
taking a market position, the Fund is also permitted to purchase and sell stock
index futures. The Fund is neither sponsored by nor affiliated with Standard &
Poor's, a division of The McGraw-Hill Companies, Inc.
For further information about the Fund's investment objective and policies, see
"MML EQUITY INDEX FUND" on page 3. There is no assurance that the investment
objective of the Fund will be realized.
This Prospectus sets forth concisely the information about MML Trust and the
Fund that a prospective investor ought to know before investing. Certain
additional information about MML Trust and the Fund is contained in a Statement
of Additional Information dated May 1, 1997, which has been filed with the
Securities and Exchange Commission and is incorporated by reference. This
additional information is available upon request and without charge. To obtain
such information, please contact the Secretary, MML Series Investment Fund, 1295
State Street, Springfield, Massachusetts 01111.
This Prospectus may only be used to offer or sell shares of the Fund described
in this Prospectus. This Prospectus should be retained for future reference for
information about MML Trust and the Fund.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
<PAGE>
Table of Contents
Page
----
General Information................................................ 3
MML Equity Index Fund.............................................. 3
Investment Considerations and Risks................................ 4
Fundamental Investment Restrictions................................ 5
The Advisers....................................................... 5
Capital Shares..................................................... 6
Net Asset Value.................................................... 7
Sale and Redemption of Shares...................................... 7
Tax Status......................................................... 7
Dividends and Capital Gains Distributions.......................... 7
Investment Performance............................................. 7
Management of MML Trust............................................ 8
Appendix........................................................... A-1
2
<PAGE>
I. General Information
MML Equity Index Fund (the "Fund") is one of five separate series of shares of
MML Series Investment Fund ("MML Trust"), a no-load, open-end, management
investment company. The Fund is a non-diversified series of MML Trust. MML Trust
was organized as a business trust under the laws of The Commonwealth of
Massachusetts pursuant to an Agreement and Declaration of Trust dated December
19, 1984, as amended from time to time (the "Declaration of Trust"). MML Trust
was established by Massachusetts Mutual Life Insurance Company ("MassMutual")
for the purpose of providing a vehicle for the investment of assets of various
separate investment accounts established by MassMutual and its life insurance
company subsidiaries, including MML Bay State Life Insurance Company. Shares of
the Fund are offered solely to separate investment accounts established by
MassMutual and its life insurance company subsidiaries.
MassMutual is responsible for providing all investment advisory, management, and
administrative services needed by the Fund pursuant to an investment management
agreement with MML Trust, on behalf of the Fund. MassMutual has entered into an
investment sub-advisory agreement with Mellon Equity Associates ("Mellon
Equity"), which provides that Mellon Equity will serve as the Fund's investment
sub-adviser, providing day-to-day management of the Fund's investments. Both
MassMutual and Mellon Equity are registered with the Securities and Exchange
Commission as investment advisers under the Investment Advisers Act of 1940, as
amended. (MassMutual and Mellon Equity are referred to hereafter collectively as
the "Advisers".) For further information, see "The Advisers" on page 5.
II. MML Equity Index Fund
Investment Objective
The Fund's investment objective is to provide investment results that correspond
to the price and yield performance of publicly traded common stocks in the
aggregate, as represented by the Standard & Poor's 500 Composite Stock Price
Index/1/ (the "Index").
This investment objective of the Fund is a fundamental policy and may not be
changed without the vote of a majority of the Fund's outstanding voting shares
(as used in this Prospectus, a majority of the outstanding voting shares of the
Fund means the lesser of (1) 67% of the Fund's outstanding shares present at a
meeting of the shareholders if more than 50% of the outstanding shares are
present in person or by proxy, or (2) more than 50% of the Fund's outstanding
shares). As explained below, there is no assurance that the investment objective
of the Fund will be realized.
Management Policies
The Fund attempts to duplicate the investment results of the Index, which is
composed of 500 selected common stocks, most of which are listed on the New York
Stock Exchange. Standard & Poor's ("S&P") has an Index Committee which is
responsible for the overall management of the Index. The Index Committee looks
at a company's market value, industry group classification, capitalization,
trading activity, financial and operating condition before making a decision to
include it in the Index. New companies are added to the Index only when there is
a vacancy. Companies are removed from the Index for four major reasons: merger
with (or acquisition by) another company, financial operating failure, lack of
representation of leading American industries, or restructuring. The Fund
attempts to be fully invested at all times in the stocks that comprise the
Index, Standard and Poor's Depositary Receipts ("SPDRs") and stock index futures
as described below and, in any event, in the normal course of management, at
least 80% of the Fund's net assets will be so invested. Furthermore, while the
Fund does intend to invest in every stock included in the Index, there may be
circumstances, such as during the Fund's early stages when it may have
relatively small assets, when the Fund is not invested in every such stock.
Inclusion of a stock in the Index in no way implies an opinion by S&P as to its
attractiveness as an investment. The Fund uses the Index as the standard
performance comparison because it represents approximately 70% of the total
market value of all United States common stocks and is well known to investors.
An investment in the Fund involves risks similar to those of investing in common
stocks.
The weightings of stocks in the Index are based on each stock's relative total
market capitalization; that is, its market price per share times the number of
shares outstanding. Because of this weighting, as of November 30, 1996,
approximately 47.4% of the Index was composed of the 50 largest companies.
Mellon Equity generally selects stocks for the Fund's portfolio in the order of
their weightings in the Index beginning with the heaviest weighted stocks. With
respect to the Fund's assets invested in the stocks in the Index, the percentage
of such assets invested in each stock is approximately the same as the
percentage it represents in the Index.
No attempt is made to manage the portfolio in the traditional sense using
economic, financial and market analysis. The Fund is managed using a computer
program to determine which stocks are to be purchased or sold to replicate the
Index to the extent feasible. From time to time, administrative adjustments may
be made in the Fund's portfolio because of changes in the composition of the
Index, but such changes should be infrequent.
The Fund believes that the indexing approach described above is an effective
method of substantially duplicating Index performance. It is a reasonable
expectation that there will be a close correlation between the Fund's
performance and that of the Index in both rising and falling markets. The Fund
will
- -----------------------
/1/ "Standard & Poor's", "S&P", "Standard & Poor's 500", "S&P 500" and "500" are
trademarks of The McGraw-Hill Companies and have been licensed for use by the
Fund. The Fund is not sponsored, endorsed, sold or promoted by Standard &
Poor's, a division of the McGraw-Hill Companies ("S&P"), or The McGraw-Hill
Companies, Inc. S&P makes no representation regarding the advisability of
investing in the Fund.
3
<PAGE>
attempt to achieve a correlation between the performance of its portfolio and
that of the Index of at least 0.95, without taking into account expenses. A
correlation of 1.00 would indicate perfect correlation, which would be achieved
when the Fund's net asset value, including the value of its dividends and
capital gains distributions, increases or decreases in exact proportion to
changes in the Index. The Fund's ability to correlate its performance with the
Index, however, may be affected by, among other things, changes in securities
markets, the manner in which the Index is calculated by S&P and the timing of
purchases and redemptions of Fund shares. In the future, MML Trust's Board,
subject to the approval of shareholders of the Fund, may select another index if
such a standard of comparison is deemed to be more representative of the
performance of common stocks.
The Fund's ability to duplicate the performance of the Index also depends to
some extent on the size of the Fund's portfolio and the size of cash flows into
and out of the Fund. Investment changes to accommodate these cash flows are made
to maintain the similarity of the Fund's portfolio to the Index to the maximum
practicable extent.
From time to time to increase its income, the Fund may lend securities from its
portfolio. See "Appendix - Investment Techniques". When the Fund has cash
reserves, the Fund may invest in money market instruments consisting of U.S.
Government securities, time deposits, certificates of deposit, bankers'
acceptances, high-grade commercial paper, and repurchase agreements. See the
Statement of Additional Information for a description of these instruments.
The Fund may invest in SPDRs, an investment intended to provide investment
results that generally correspond to the price and yield performance of the
Index, when, in the opinion of Mellon Equity, available cash balances would not
otherwise allow the Fund to invest such cash balances in a manner which
adequately corresponds to the Index. SPDRs represent an interest in the
portfolio of S&P 500 stocks held by a unit investment trust, and SPDR holders
are entitled to receive dividends which accrue to stocks held by the unit
investment trust, less trust expenses. The Fund also may purchase stock index
futures in anticipation of taking a market position when, in the opinion of
Mellon Equity, available cash balances do not permit an economically efficient
trade in the cash market. The Fund also may sell stock index futures to
terminate existing positions it may have as a result of its purchases of stock
index futures. Investments in stock index futures typically require greater
available cash balances than do investments in SPDRs. See also "Investment
Considerations and Risks" and "Appendix - Investment Techniques" below, and
"Investment Objective and Management Policies" in the Statement of Additional
Information.
The Fund is not sponsored, endorsed, sold or promoted by S&P. S&P makes no
representation or warranty, express or implied, to the shareholders of the Fund
or any member of the public regarding the advisability of investing in
securities generally or in the Fund particularly or the ability of the Index to
track general stock market performance. S&P's only relationship to the Fund is
the licensing of certain trademarks and trade names of S&P and of the Index,
which is determined, composed and calculated by S&P without regard to the Fund.
S&P has no obligation to take the needs of the Fund or the shareholders of the
Fund into consideration in determining, composing or calculating the Index. S&P
is not responsible for and has not participated in the determination of the
prices and amount of the Fund or the timing of the issuance or sale of the Fund
or in the determination or calculation of the equation by which the Fund is to
be converted into cash. S&P has no obligation or liability in connection with
the administration, marketing or trading of the Fund.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500 INDEX
OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS,
OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY THE FUND, SHAREHOLDERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN.
S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY
OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL,
PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
III. Investment Considerations and Risks
General - The Fund's net asset value per share should be expected to fluctuate.
Investors should consider the Fund as a part of an overall investment program
and should invest only if they are willing to undertake the risks involved. See
"Investment Objective and Management Policies -- Management Policies" in the
Statement of Additional Information for a further discussion of certain risks.
Equity Securities - Equity securities fluctuate in value, often based on factors
unrelated to the value of the issuer of the securities, and such fluctuations
can be pronounced. Changes in the value of the Fund's investments will result in
changes in the value of its shares and thus the Fund's total return to
investors.
Foreign Securities - Since the stocks of some foreign issuers are included in
the Index, the Fund's portfolio may contain securities of such foreign issuers
which may subject the Fund to additional investment risks with respect to those
securities that are different in some respects from those incurred by a fund
which invests only in securities of domestic issuers. Such risks include
possible adverse political and economic developments, seizure or nationalization
of foreign deposits or adoption of governmental restrictions which might
adversely affect the value of the securities of a foreign issuer to investors
located outside the country of the issuer, whether from currency blockage or
otherwise.
Use of Derivatives - The Fund may invest, to a limited extent, in derivatives
("Derivatives"). These are financial instruments
4
<PAGE>
which derive their performance, at least in part, from the performance of an
underlying asset or index. The Derivatives the Fund may use include stock index
futures. While Derivatives can be used effectively in furtherance of the Fund's
investment objective, under certain market conditions, they can increase the
volatility of the Fund's net asset value, can decrease the liquidity of the
Fund's portfolio and make more difficult the accurate pricing of the Fund's
portfolio. See "Appendix -Investment Techniques - Use of Derivatives" and
"Investment Objective and Management Policies - Management Policies -
Derivatives" in the Statement of Additional Information.
Non-Diversified Status - The classification of the Fund as "non-diversified"
means that the proportion of the Fund's assets that may be invested in the
securities of a single issuer is not limited by the Investment Company Act of
1940, as amended (the "1940 Act"). A "diversified" investment company is
required by the 1940 Act generally, with respect to 75% of its total assets, to
invest not more than 5% of such assets in the securities of a single issuer.
Since a relatively high percentage of the Fund's assets may be invested in the
securities of a limited number of issuers, some of which may be within the same
economic sector, the Fund's portfolio may be more sensitive to the changes in
market value of a single issuer or industry. However, to meet Federal tax
requirements, at the close of each quarter the Fund may not have more than 25%
of its total assets invested in any one issuer and, with respect to 50% of total
assets, not more than 5% of its total assets invested in any one issuer.
These limitations do not apply to U.S. Government securities.
IV. Fundamental Investment Restrictions
For a description of fundamental investment restrictions that apply to the Fund,
which may not be changed without a vote of a majority of the outstanding shares
of the Fund, reference should be made to the Statement of Additional
Information.
V. The Advisers
MassMutual
MassMutual serves as investment manager of the Fund pursuant to an investment
management agreement executed by MassMutual and MML Trust, on behalf of the Fund
(the "Investment Management Agreement"). MassMutual is a registered investment
adviser and is a mutual life insurance company organized in 1851 under the laws
of The Commonwealth of Massachusetts. MassMutual is licensed to transact a life
insurance business in all states of the United States, the District of Columbia,
Puerto Rico and certain Provinces of Canada. At December 31, 1996, MassMutual,
together with its subsidiaries, had total assets of approximately $55.7 billion
and in excess of $130.8 billion in assets under management.
Under the Investment Management Agreement, MassMutual is authorized to engage in
portfolio transactions on behalf of the Fund, subject to such general or
specific instructions as may be given by the Board of Trustees of MML Trust. The
Investment Management Agreement provides that MassMutual will perform all
administrative functions relating to the Fund and will bear all expenses of the
Fund except: (1) taxes and corporate fees payable to government agencies; (2)
brokerage commissions and other capital items payable in connection with the
purchase or sale of Fund investments; (3) interest on account of any borrowings
by the Fund; (4) fees and expenses of Trustees of MML Trust who are not
interested persons, as defined in the 1940 Act, of the Advisers or MML Trust;
(5) fees and expenses of MML Trust's Advisory Board Members; (6) fees of the
Fund's independent certified public accountants; and (7) any required trademark
licensing fees.
For providing the services described above, MassMutual is paid a quarterly fee
at the annual rate of .40% of the first $100,000,000 of the average daily net
asset value of the Fund; .38% of the next $150,000,000 and .36% of any net
assets thereafter. MassMutual has agreed to bear expenses of the Fund (other
than the management fee, interest, taxes, any required trademark licensing fees,
custodial fees (which will be paid by Mellon Equity as described below),
brokerage commissions and extraordinary expenses) in excess of .11% of average
daily net asset value through April 30, 1998. The imposition of the Fund's
management fee, as well as other operating expenses, will have the effect of
reducing shareholders' return and will affect the ability of the Fund to track
the Index exactly.
The Investment Management Agreement between MassMutual and the Fund
automatically terminates: (1) unless its continuance is specifically approved at
least annually by the affirmative vote of a majority of the Board of Trustees of
MML Trust, which affirmative vote shall include a majority of the members of the
Board who are not interested persons (as defined in the 1940 Act) of the
Advisers or of MML Trust, or (2) upon its assignment. Under the terms of the
Investment Management Agreement, the Fund recognizes MassMutual's control of the
initials "MML" and the Fund agrees that its right to use these initials is
non-exclusive and can be terminated by MassMutual at any time. Under the
agreement, MassMutual's liability regarding its investment management
obligations and duties is limited to situations involving its willful
misfeasance, bad faith, gross negligence or reckless disregard of such
obligations and duties.
MassMutual also acts as the transfer agent and the dividend paying agent. First
Data Investors Services Group, Inc. provides fund accounting services for the
Fund.
Mellon Equity
Pursuant to an investment sub-advisory agreement (the "Sub-Advisory Agreement")
with MassMutual, Mellon Equity, located at 500 Grant Street, Pittsburgh,
Pennsylvania 15258, serves as the Fund's investment sub-adviser, providing
day-to-day management of the Fund's investments. Mellon Equity, a registered
investment adviser formed in 1987, became a Pennsylvania Business Trust as of
December 31, 1991 and is an indirect wholly-owned subsidiary of Mellon Bank
Corporation. As of December 31, 1996, Mellon Equity and its employees managed
approximately $11 billion and served as the investment adviser or sub-adviser of
9 other investment companies.
Mellon Bank Corporation is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under the Federal
Bank Holding Company Act
5
<PAGE>
of 1956, as amended. Mellon Bank Corporation provides a comprehensive range of
financial products and services in domestic and selected international markets.
Through its subsidiaries, Mellon Bank Corporation managed more than $226 billion
in assets as of September 30, 1996, including approximately $65 billion in
proprietary mutual fund assets.
The Sub-Advisory Agreement provides that MassMutual will pay Mellon Equity a
monthly fee equal at an annual rate of .09% of the first $100,000,000 of the
average daily net asset value of the Fund; .07% of the next $150,000,000; and
.05% on any assets thereafter. Pursuant to the Sub-Advisory Agreement, Mellon
Equity has agreed that so long as it is the sole investment sub-adviser to the
Fund, that Mellon Equity shall pay the fees for the custody services for the
Fund, which will be provided by Boston Safe Deposit and Trust Company (which is
an indirect subsidiary of Mellon Bank Corporation).
The Sub-Advisory Agreement between MassMutual and Mellon Equity automatically
terminates: (1) unless its continuance is specifically approved at least
annually by the affirmative vote of a majority of the Board of Trustees of MML
Trust, which affirmative vote shall include a majority of the members of the
Board who are not interested persons (as defined in the 1940 Act) of the
Advisers or of MML Trust; (2) upon its assignment; or (3) upon the termination
of the Investment Management Agreement. Under the terms of the Sub-Advisory
Agreement, Mellon Equity's liability regarding its investment management
obligations and duties is limited to situations involving its willful
misfeasance, bad faith, gross negligence or reckless disregard of such
obligations and duties.
The Sub-Advisory Agreement acknowledges that when purchase or sale of securities
of the same issuer is suitable for the Fund and one or more other investment
companies or accounts managed by Mellon Equity which attempt to track an equity
index, such purchases or sales may and normally will be combined, to the extent
practicable, and will be allocated as nearly as practicable on a pro rata basis
in proportion to the amounts to be purchased or sold for each. In determining
the amounts to be purchased or sold, the main factors to be considered will be
the investment objectives of the respective portfolios, the relative size of
portfolio holdings of the same or comparable security, availability of cash for
investment by the various portfolios and the size of their respective investment
commitments. Mellon Equity believes that the ability of the Fund to participate
in larger volume transactions will, in most cases, produce better execution for
the Fund. In some cases, however, this procedure could have a detrimental effect
on the price and amount of a security available to the Fund or the price at
which a security may be sold. It is the opinion of MML Trust's management that
such execution advantage and the desirability of retaining Mellon Equity as
index manager of the Fund outweigh the disadvantages, if any, which might result
from this procedure.
In allocating brokerage transactions for the Fund, Mellon Equity seeks to obtain
the best execution of orders at the most favorable net price. Subject to this
determination, Mellon Equity may consider, among other things, the sale of
shares of the Fund as a factor in the selection of broker-dealers to execute
portfolio transactions for the Fund. Mellon Equity will not consider the
provision of brokerage or research services (as such term is defined in Section
28(e) of the Securities Exchange Act of 1934, as amended) in allocating
brokerage transactions for the Fund. See "Portfolio Transactions" in the
Statement of Additional Information.
VI. Capital Shares
MML Trust is a "series" company which is authorized to issue an unlimited number
of shares in separate series of the same class. To date, shares of five separate
series have been authorized, one of which constitutes the interests in the Fund.
Under MML Trust's Declaration of Trust, however, the Board of Trustees is
authorized to create new series without the necessity of a vote of shareholders
of MML Trust. Each share of a particular series represents an equal
proportionate interest in that series with each other share of the same series,
none having priority or preference over another. Each series shall be preferred
over all other series in respect of the assets allocated to that series. Each
share of a particular series is entitled to a pro rata share of any
distributions declared by that series and, in the event of liquidation, a pro
rata share of the net assets of that series remaining after satisfaction of
outstanding liabilities. When issued, shares are fully paid and nonassessable
and have no preemptive, conversion or subscription rights.
MML Trust is not required to hold annual meetings of shareholders. Special
meetings may be called for purposes such as electing Trustees, voting on
management agreements, and with respect to such additional matters relating to
MML Trust as may be required by MML Trust's Declaration of Trust and the 1940
Act. Shareholders holding 10% of the shares of MML Trust may call a meeting to
be held to consider removal of Trustees. On any matter submitted to
shareholders, shares of each series entitle their holder to one vote per share
(with proportionate voting for fractional shares), irrespective of the relative
net asset values of the series' shares. On any matters submitted to a vote of
shareholders, all shares of MML Trust then entitled to vote shall be voted by
individual series, except that (i) when required by the 1940 Act, shares shall
be voted in the aggregate and not by individual series, and (ii) when the
Trustees have determined that any matter affects only the interests of one or
more series, then only shareholders of such series shall be entitled to vote
thereon. Shareholder inquiries should be made by contacting the Secretary, MML
Series Investment Fund, 1295 State Street, Springfield, Massachusetts 01111.
Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for the obligations of MML Trust. However, MML Trust's
Declaration of Trust disclaims liability of the shareholders, Trustees of MML
Trust, or officers of MML Trust for acts or obligations of MML Trust, which are
binding only on the assets and property of MML Trust, and requires that notice
of such disclaimer be given in each agreement, obligation, or instrument entered
into or executed by MML Trust or Trustees of MML Trust. MML Trust's Declaration
of Trust provides for indemnification out of MML Trust property for all loss and
expense of any shareholder held personally liable for the obligations of MML
Trust. Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is considered remote since it
6
<PAGE>
is limited to circumstances in which the disclaimer is inoperative and MML Trust
itself would be unable to meet its obligations.
VII. Net Asset Value
The net asset value of the Fund's shares is determined once daily as of the
normal close of trading on the New York Stock Exchange (presently 4:00 p.m.) on
each day on which the Exchange is open for trading.
Generally, the Fund values portfolio securities on the basis of market value.
For example, equity securities, including those traded on national securities
exchanges, the NASDAQ national market system, or over-the-counter securities not
so listed, are valued by one or more pricing services, as authorized by the
Board of Trustees of MML Trust. Normally, the values are based upon the last
reported sale price of the security. Debt obligations with less than one year
but more than sixty days to maturity are valued on the basis of their market
value. Debt obligations having a maturity of sixty days or less are generally
valued at amortized cost when the Board of Trustees of MML Trust believes that
amortized cost approximates market value. Futures contracts are valued based on
market prices unless such prices do not reflect the fair value of the contract,
in which case they will be valued by or under the direction of the Board of
Trustees of MML Trust. In all other cases, assets will be valued at fair value
as determined in good faith by the Board of Trustees, although the actual
calculations may be made by persons acting pursuant to the direction of the
Board.
VIII. Sale and Redemption of Shares
The shares of the Fund are sold at their net asset value as next computed after
receipt of the purchase order, without the addition of any selling commission or
"sales load."
The Fund redeems its shares at their net asset value as next computed after
receipt of the request for redemption. The redemption price for shares of the
Fund may be more or less than the shareholder's cost. No fee is charged on
redemption.
Redemption payments will be made within seven days after receipt of the written
request therefor by MML Trust, except that the right of redemption may be
suspended or payments postponed when permitted by applicable law and
regulations.
IX. Tax Status
It is the policy of the Fund to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies. As a result, the Fund
will not be subject to federal income tax on any net income or any capital gains
to the extent they are distributed or are deemed to have been distributed to
shareholders.
Regulations issued under Internal Revenue Code Section 817(h) require the Fund
to be adequately diversified in order for a variable life insurance contract
funded by the Fund to receive favorable tax treatment as a life insurance
contract. Among other requirements, the regulations limit the Fund's investment
in a single issuer to 55% of its assets; while this requirement applies to U.S.
Government securities, each government agency or instrumentality is treated for
this purpose as a separate issuer. The Fund intends to comply with these
diversification requirements. For further information, see the Statement of
Additional Information.
Tax consequences to investors in the separate investment accounts which are
invested in the Fund are described in the prospectuses for such accounts.
X. Dividends and Capital Gains Distributions
The Fund intends to declare capital gain and ordinary income dividends and to
distribute such dividends in a manner designed to avoid a 4% excise tax on
undistributed regulated investment company income imposed by the Tax Reform Act
of 1986. Distributions, if any, are declared and paid annually. Distributions
may be taken either in cash or in additional shares of the Fund at net asset
value on the day after the record date for the distribution, at the option of
the shareholder.
XI. Investment Performance
The Fund may from time to time advertise certain investment performance figures.
These figures are based on historical returns and are not intended to indicate
future performance.
The Fund may advertise its total return and its holding period return for
various periods of time. Total return is calculated by determining, over a
period of time which will be stated in the advertisement, the average annual
compounded rate of return that an investment in the Fund earned over that
period, assuming reinvestment of all distributions. Holding period return refers
to the percentage change in the value of an investment in the Fund over a period
of time (which period will be stated in the advertisement), assuming
reinvestment of all distributions. Total return differs from holding period
return principally in that total return is an average annual figure while
holding period return is an aggregate figure for the entire period. This
performance information for the Fund may also be compared to the Index.
These investment performance figures may be of limited use for comparative
purposes because they do not reflect charges imposed by the separate investment
accounts invested in the Fund which, if included, would decrease the performance
figures. For more information about calculation of the investment performance of
the Fund, see the Statement of Additional Information.
7
<PAGE>
XII. Management of MML Trust
The affairs of MML Trust are generally supervised by its Board of Trustees and
officers. As stated previously, MassMutual acts as investment manager of the
Fund and Mellon Equity is the sub-adviser to the Fund. In those capacities
MassMutual and Mellon Equity are part of the management of MML Trust. For more
information concerning the management of MML Trust, reference should be made to
the Statement of Additional Information.
The name MML Series Investment Fund is the designation of Trustees of MML Trust
under an Agreement and Declaration of Trust dated December 19, 1984, as amended
from time to time. The obligations of such Trust are not personally binding
upon, nor shall resort be had to the property of, any Trustees of MML Trust,
shareholders, officers, employees or agents of such Trust, but MML Trust's
property only shall be bound.
8
<PAGE>
Appendix
Investment Techniques
Borrowing Money - The Fund is permitted to borrow money only for temporary or
emergency purposes, in an amount up to 5% of the value of its total assets
(including the amount borrowed) valued at the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made.
Use of Derivatives - The Fund may invest in the types of Derivatives enumerated
under "Description of the Fund - Investment Considerations and Risks - Use of
Derivatives." These instruments and certain related risks are described more
specifically under "Investment Objective and Management Policies - Management
Policies - Derivatives" in the Statement of Additional Information.
Although the Fund will not be a commodity pool, Derivatives subject the Fund to
the rules of the Commodity Futures Trading Commission which limit the extent to
which the Fund can invest in certain derivatives. The Fund may invest in stock
index futures contracts for hedging purposes without limit. However, the Fund
may not invest in such contracts for other purposes if the sum of the amount of
initial margin deposits, other than for bona fide hedging purposes, exceeds 5%
of the liquidation value of the Fund's assets, after taking into account
unrealized gains and unrealized losses on such contracts.
Standard & Poor's Depositary Receipts ("SPDRs") - The Fund may invest in SPDRs
when, in the opinion of Mellon Equity, available cash balances would not
otherwise allow the Fund to invest such cash balances in a manner which
adequately corresponds to the Index. Investments in SPDRs typically require less
available cash balances than do investments in stock index futures.
SPDRs represent an interest in the portfolio of S&P 500 stocks held by a unit
investment trust. SPDRs trade on the American Stock Exchange and may be bought
and sold like common stock at any time during the trading day. An investment in
SPDRs is intended to provide investment results that generally correspond to the
price and yield performance of the Index.
Lending Portfolio Securities - The Fund may lend securities from its portfolio
to brokers, dealers and other financial institutions desiring to borrow
securities to complete certain transactions. The Fund continues to be entitled
to payments in amounts equal to the interest, dividends or other distributions
payable on the loaned securities which affords the Fund an opportunity to earn
interest on the amount of the loan and income on the loaned securities'
collateral. Loans of portfolio securities may not exceed 10% of the value of the
Fund's total assets, and the Fund will receive collateral consisting of cash,
U.S. Government securities or irrevocable letters of credit which will be
maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities. Such loans are terminable by the Fund at
any time upon specified notice. The Fund might experience risk of loss if the
institution with which it has engaged in a portfolio loan transaction breaches
its agreement with the Fund.
A-1
<PAGE>
MML EQUITY INDEX FUND
1295 State Street
Springfield, Massachusetts 01111
-----------------------------
INVESTMENT MANAGER
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
1295 State Street
Springfield, Massachusetts 01111
INVESTMENT SUB-ADVISER
MELLON EQUITY ASSOCIATES
500 Grant Street
Suite 3700
Pittsburgh, Pennsylvania 15258
INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND LLP
2300 BayBank Tower
Springfield, Massachusetts 01101
CUSTODIAN
BOSTON SAFE DEPOSIT AND
TRUST COMPANY
One Boston Place
Boston, Massachusetts 02108
-----------------------------
For Use With:
. MML Bay State Variable Life Separate Account I
. MassMutual Variable Life Separate Account I
This Prospectus does not constitute an offering in any jurisdiction in which
such offering may not lawfully be made. No person is authorized to make any
representations in connection with this offering other than those contained in
this Prospectus.
<PAGE>
Rule 485(b)
Registration No. 2-39334
File No. 811-2224
MML EQUITY INDEX FUND
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. IT SHOULD BE READ
IN CONJUNCTION WITH THE PROSPECTUS OF MML EQUITY INDEX FUND DATED MAY 1, 1997,
AS AMENDED FROM TIME TO TIME (THE "PROSPECTUS"). MML EQUITY INDEX FUND IS
A NON-DIVERSIFIED SERIES OF MML SERIES INVESTMENT FUND. THE PROSPECTUS MAY BE
OBTAINED WITHOUT CHARGE FROM THE SECRETARY, MML SERIES INVESTMENT FUND, 1295
STATE STREET, SPRINGFIELD, MASSACHUSETTS 01111.
DATED OCTOBER 22, 1997
<PAGE>
TABLE OF CONTENTS
GENERAL INFORMATION............................................................3
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES...................................3
INVESTMENT RESTRICTIONS........................................................7
MANAGEMENT OF MML TRUST........................................................8
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES...........................16
INVESTMENT MANAGEMENT AND OTHER SERVICES......................................16
PORTFOLIO TRANSACTIONS........................................................17
CAPITAL SHARES................................................................19
PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED..................19
TAX STATUS....................................................................20
CERTAIN TAX AND ACCOUNTING INFORMATION........................................22
INVESTMENT PERFORMANCE........................................................22
INDEPENDENT AUDITORS..........................................................23
COUNSEL .....................................................................23
FINANCIAL STATEMENTS OF THE FUND (UNAUDITED).................................F-1
APPENDIX ..............................................................A-1 - A-2
<PAGE>
I. GENERAL INFORMATION
MML Equity Index Fund (the "Fund") is one of five separate series of shares of
MML Series Investment Fund ("MML Trust"). MML Trust is a no-load, open-end,
management investment company that was established by Massachusetts Mutual Life
Insurance Company ("MassMutual") for the purpose of providing a vehicle for the
investment of assets of various separate investment accounts established by
MassMutual and life insurance company subsidiaries of MassMutual.
Shares of MML Trust are not offered to the general public but solely to separate
investment accounts established by MassMutual and its life insurance company
subsidiaries, including MML Bay State Life Insurance Company ("MML Bay State").
MML Trust was formed as a voluntary association of the type known as a "business
trust" organized under the laws of The Commonwealth of Massachusetts pursuant to
an Agreement and Declaration of Trust dated December 19, 1984, as amended from
time to time (the "Declaration of Trust").
MassMutual is responsible for providing all investment advisory, management, and
administrative services needed by the Fund pursuant to an investment management
agreement. MassMutual has entered into an investment sub-advisory agreement with
Mellon Equity Associates ("Mellon Equity"), which provides that Mellon Equity
will serve as the Fund's investment sub-adviser, providing day-to-day management
of the Fund's investments. Both MassMutual and Mellon Equity are registered with
the Securities and Exchange Commission (the "SEC") as investment advisers under
the Investment Advisers Act of 1940, as amended (MassMutual and Mellon Equity
are referred to hereinafter collectively as the "Advisers").
II. INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction with the
discussion of the Fund's investment objective, techniques and policies described
in the Prospectus. The fundamental investment objective and investment
restrictions of the Fund (as described in the Prospectus and below) may not be
changed without a vote of a majority of the Fund's outstanding shares. A
"majority of the outstanding shares" of the Fund means the lesser of (1) 67% of
the Fund's outstanding shares present at a meeting of the shareholders if more
than 50% of the outstanding shares are present in person or by proxy or (2) more
than 50% of the Fund's outstanding shares. All other investment policies and
techniques of the Fund may be changed by the Board of Trustees of MML Trust
without a vote of shareholders. For example, such other policies and techniques
include investment in new types of hedging programs which may be devised in the
future, or which are presently in disuse but may become more prominent in the
future, and minor changes in investment policies which may be made in response
to changes in regulatory requirements which are reflected in the present
policies of the Fund. The Fund's investment objective is to provide investment
results that correspond to the price and yield performance of publicly traded
common stocks in the aggregate, as represented by the Standard & Poor's 500
Composite Stock Price Index (the "Index"). There is no assurance that the
investment objective of the Fund will be realized.
-3-
<PAGE>
In managing its portfolios of investments, the Fund may purchase various
securities, investment related instruments and make use of various investment
techniques, including those described below.
Other Portfolio Securities
Money Market Instruments. The Fund may invest, in the circumstances described
- -------------------------
under "MML Equity Index Fund-Management Policies" in the Fund's Prospectus, in
the following types of money market instruments.
U.S. Government Securities -- Securities issued or guaranteed by the
--------------------------
U.S. Government or its agencies or instrumentalities include U.S. Treasury
securities that differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies and
instrumentalities are supported by the full faith and credit of the U.S.
Treasury; others by the right of the issuer to borrow from the Treasury; others
by discretionary authority of the U.S. Government to purchase certain
obligations from the agency or instrumentality; and others only by the credit of
the agency or instrumentality. These securities bear fixed, floating or variable
rates of interest. While the U.S. Government provides financial support for such
U.S. Government-sponsored agencies and instrumentalities, no assurance can be
given that it will always do so since it is not so obligated by law.
Repurchase Agreements -- In a repurchase agreement, the Fund buys, and
---------------------
the seller agrees to repurchase, a security at a mutually agreed upon time and
price (usually within seven days). The repurchase agreement thereby determines
the yield during the purchaser's holding period, while the seller's obligation
to repurchase is secured by the value of the underlying security. The Fund's
custodian or sub-custodian will have custody of, and will hold in a segregated
account, securities acquired by the Fund under a repurchase agreement.
Repurchase agreements are considered by the staff of the SEC to be loans by the
Fund. In an attempt to reduce the risk of incurring a loss on a repurchase
agreement, the Fund will enter into repurchase agreements only with domestic
banks with total assets in excess of one billion dollars or primary government
securities dealers reporting to the Federal Reserve Bank of New York, with
respect to securities of the type in which the Fund may invest, and will require
that additional securities be deposited with it if the value of the securities
purchased should decrease below resale price. However, if the seller defaults,
the Fund may realize a loss on the sale of the underlying security. In addition,
if the seller should be involved in bankruptcy or insolvency proceedings, the
Fund may incur delay and costs in selling the underlying security or may suffer
a loss of principal and interest if the Fund is treated as an unsecured creditor
and required to return the underlying securities to the seller's estate.
Bank Obligations -- The Fund may purchase certificates of deposit, time
----------------
deposits, bankers' acceptances and other short-term obligations issued by
domestic banks, foreign subsidiaries or foreign branches of domestic banks,
domestic and foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions. With respect to such securities
issued by foreign subsidiaries or foreign branches of domestic banks and
-4-
<PAGE>
domestic and foreign branches of foreign banks, the Fund may be subject to
additional investment risks that are different in some respects from those
incurred by a fund which invests only in debt obligations of U.S. domestic
issuers.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period of
time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven days)
at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and the drawer to pay the face amount of the
instruments upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
Commercial Paper -- Commercial paper consists of short-term, unsecured
----------------
promissory notes issued to finance short-term credit needs. The commercial paper
purchased by the Fund will consist only of direct obligations which, at the time
of their purchase, are; (1) rated at least Prime-1 by Moody's Investors Service,
Inc. ("Moody's") or A-1 by Standard & Poor's Ratings Group ("S&P"), a division
of The McGraw-Hill Companies, Inc.; (2) issued by companies having an
outstanding unsecured debt issue currently rated at least Aa by Moody's or at
least AA- by S&P; or (3) if unrated, determined by Mellon Equity to be of
comparable quality to those rated obligations which may be purchased by the
Fund.
Management Policies
Lending Portfolio Securities. In connection with its securities lending
- -----------------------------
transactions, the Fund may return to the borrower or a third party which is
unaffiliated with the Fund, and which is acting as a "placing broker," a part of
the interest earned from the investment of cash collateral received for
securities loaned.
The SEC currently requires that the following conditions must be met
whenever portfolio securities are loaned: (1) the Fund must receive at least
100% cash collateral from the borrower; (2) the borrower must increase such
collateral whenever the market value of the securities rises above the level of
such collateral; (3) the Fund must be able to terminate the loan at any time;
(4) the Fund must receive reasonable interest on the loan, as well as any
dividends, interest or other distributions payable on the loaned securities, and
any increase in market value; (5) the Fund may pay only reasonable custodian
fees in connection with the loan; and (6) while voting rights on the loaned
securities may pass to the borrower, the Fund's Board must terminate the loan
and regain the right to vote the securities if a material event adversely
affecting the investment occurs.
Derivatives. The Fund may invest in Derivatives (as defined in the Prospectus)
- ------------
in anticipation of taking a market position when, in the opinion of Mellon
Equity, available cash
-5-
<PAGE>
balances do not permit an economically efficient trade in the cash market.
Derivatives may provide a cheaper, quicker or more specifically focused way for
the Fund to invest than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and the
portfolio as a whole. Derivatives permit the Fund to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed.
Derivatives may entail investment exposures that are greater than their
cost would suggest, meaning that a small investment in Derivatives could have a
large potential impact on the Fund's performance.
Investments in Derivatives may lower the Fund's return or result in a
loss. The Fund also could experience losses if its Derivatives were poorly
correlated with its other investments, or if the Fund were unable to liquidate
its position because of an illiquid secondary market. The market for many
Derivatives is, or suddenly can become, illiquid. Changes in liquidity may
result in significant, rapid and unpredictable changes in the prices for
Derivatives.
Stock Index Futures. A stock index future obligates the Fund to pay or receive
- --------------------
an amount of cash equal to a fixed dollar amount specified in the futures
contract multiplied by the difference between the settlement price of the
contract on the contract's last trading day and the value of the index based on
the stock prices of the securities that comprise it at the opening of trading in
such securities on the next business day. The Fund purchases and sells futures
contracts on the stock index for which it can obtain the best price with
consideration also given to liquidity.
Using futures in anticipation of market transactions involves certain
risks. Although the Fund intends to purchase or sell futures contracts only if
there is an active market for such contracts, no assurance can be given that a
liquid market will exist for any particular contract at any particular time. In
addition, the price of stock index futures may not correlate perfectly with the
movement in the stock index due to certain market distortions. First, all
participants in the futures market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit requirements,
investors may close futures contracts through offsetting transactions which
would distort the normal relationship between the index and futures markets.
Secondly, from the point of view of speculators, the deposit requirements in the
futures market are less onerous than margin requirements in the securities
market. Therefore, increased participation by speculators in the futures market
also may cause temporary price distortions. Because of the possibility of price
distortions in the futures market and the imperfect correlation between
movements in the stock index and movements in the price of stock index futures,
the use of stock index futures may not result in a successful hedging
transaction.
-6-
<PAGE>
In connection with its futures transactions, the Fund may be required
to establish and maintain at its custodian bank or a registered futures
commission merchant a segregated account consisting of cash or high quality
money market instruments in an amount equal to the market value of the
underlying commodity less any amount deposited as margin.
Standard & Poor's Depositary Receipts ("SPDRs"). The Fund may invest in SPDRs
- ------------------------------------------------
when, in the opinion of Mellon Equity, available cash balances would not
otherwise allow the Fund to invest such cash balances in a manner which
adequately corresponds to the Index. Investments in SPDRs typically require less
available cash balances than do investments in stock index futures.
SPDRs represent an interest in the portfolio of S&P 500 stocks held by
a unit investment trust. SPDRs trade on the American Stock Exchange and may be
bought and sold like common stock at any time during the trading day. An
investment in SPDRs is intended to provide investment results that generally
correspond to the price and yield performance of the Index.
III. INVESTMENT RESTRICTIONS
The following is a description of certain restrictions on investments of the
Fund which may not be changed without a vote of a majority of the outstanding
shares of the Fund.
The Fund will not:
1. Purchase securities on margin, except for such short-term credits as
are necessary for the clearance of transactions, and except that the
Fund may deposit and maintain funds with its custodian or brokers as
margin in connection with its use of financial futures contracts;
2. Purchase commodities or commodity contracts, except to the extent
that the Fund may enter into futures contracts, as described in the
Prospectus and this Statement of Additional Information;
3. Borrow money or pledge, mortgage or hypothecate its assets, except
as described in the Fund's Prospectus and the Statement of Additional
Information and in connection with entering into futures contracts.
Collateral arrangements with respect to initial or variation margin for
futures contracts will not be deemed to be pledges of the Fund's
assets.
4. Act as an underwriter of securities of other issuers or purchase
securities subject to restrictions on disposition under the Securities
Act of 1933, as amended (so-called "restricted securities"). The Fund
may not enter into repurchase agreements providing for settlement in
more than seven days or purchase securities which are not readily
marketable, if, in the aggregate more than 10% of the value of the
Fund's net assets would be so invested. The Fund will not enter into
time deposits maturing in more
-7-
<PAGE>
than seven days and time deposits maturing from two business through
seven calendar days will not exceed 10% of the Fund's total assets.
5. Write, purchase or sell puts, calls or combinations thereof;
6. Make loans to any officer, Trustee or employee of the Trust or to
any officer, director or employee of MassMutual, or to MassMutual;
7. Purchase or sell real estate or interests in real estate, although
the Fund may purchase and sell marketable securities secured by, or of
companies investing or dealing in, real estate;
8. Purchase securities of investment companies except as permitted
under the Investment Company Act of 1940, as amended (the "1940 Act").
9. Invest more than 25% of its assets in investments in any particular
industry or industries (including banking), except to the extent the
Index also is so concentrated.
10. Make loans, except through the acquisition of bonds, debentures,
notes, commercial paper, bankers= acceptances or other evidences of
indebtedness in which the Fund is authorized to invest. However, the
Fund may lend portfolio securities with respect to not more than 10% of
the total assets of the Fund taken at current value.
11. Issue senior securities, except to evidence borrowings permitted by
investment restriction (3) described above.
In addition to the investment restrictions adopted as fundamental
policies set forth above, the Fund operates with certain non-fundamental
policies which may be changed by vote of a majority of the Board members at any
time. The Fund may not sell securities short, but reserves the right to sell
securities short against the box. If a percentage restriction is adhered to at
the time of investment, a later change in percentage resulting from a change in
values or assets will not constitute a violation of such restriction.
IV. MANAGEMENT OF MML TRUST
MML Trust has a Board of Trustees, a majority of whom are not "Interested
Persons" as defined in the 1940 Act. The Board of Trustees has established an
Advisory Board that has advisory functions only as to investments made by MML
Trust. Trustees of MML Trust, members of the Advisory Board, and principal
officers of MML Trust are listed below together with information on their age,
address, positions with MML Trust, principal occupations during the past five
years and other principal business affiliations.
-8-
<PAGE>
Gary E. Wendlandt* Chariman and Trustee of MML Trust
1295 State Street
Springfield, MA 01111
Age: 47
Chief Investment Officer (since 1993) and Executive Vice President,
MassMutual; Chairman and Chief Executive Officer, MassMutual
Institutional Funds; Chairman (since 1995), President (1983-1995) and
Trustee, MassMutual Corporate Investors; Chairman (since 1995),
President (1988-1995) and Trustee, MassMutual Participation Investors;
Chairman (since 1996), Antares Leveraged Capital Corp. (finance
company); Chairman, HYP Management, Inc. (managing member of MassMutual
High Yield Partners LLC) and MMHC Investment, Inc. (investor in
MassMutual High Yield Partners LLC); Advisory Board Member (since
1996), MassMutual High Yield Partners LLC (high yield bond fund);
President and Director (since 1995), DLB Acquisition Corporation
(holding company for investment advisers); President and Chief
Executive Officer (1994-1996), Director (1992-1996), Concert Capital
Management, Inc. (former indirect investment advisory subsidiary of
MassMutual Holding Company); Director, Oppenheimer Acquisition
Corporation (investment advisory holding company); Supervisory
Director, MassMutual/Carlson CBO N.V. Inc. (collateralized bond fund);
Director (since 1994), MassMutual Corporate Value Partners Limited
(investor in debt and equity securities) and MassMutual Corporate Value
Limited (parent of MassMutual Corporate Value Partners Limited);
Chairman (since 1994) and Director (since 1993), MML Realty Management
Corporation; Chairman (since 1994), Chief Executive Officer (1994-
1996), Cornerstone Real Estate Advisers, Inc. (wholly-owned real estate
investment adviser subsidiary of MassMutual Holding Trust); Director,
Merrill Lynch Derivative Products, Inc.; Chairman (1994-1995) and
Director (1993-1995), MML Real Estate Corporation.
Ronald J. Abdow Trustee of MML Trust
1400 Elm Street
West Springfield, MA 01089
Age: 66
President, Abdow Corporation (operator of restaurants); General
Partner, Grove Investment Group (apartment building syndicator);
Trustee, Abdow G&R Trust and Abdow G&R Co. (owners and operators of
restaurant properties); Partner, Abdow Partnership, Abdow Auburn
Associates, and Abdow Hazard Associates (owners and operators of
restaurant properties); Trustee (since 1994), MassMutual Institutional
Funds (open-end investment company).
- -----------------------
* Trustee who is an "interested person" of MML Trust within the definition set
forth in Section 2(a)(19) of the 1940 Act.
-9-
<PAGE>
Mary E. Boland Trustee of MML Trust
67 Market Street
Springfield, MA 01102
Age: 58
Attorney at Law, Egan, Flanagan and Cohen, P.C. (law firm),
Springfield, MA; Director (since 1995), Trustee (until 1995), SIS Bank
(formerly, Springfield Institution for Savings); Trustee (since 1994),
MassMutual Institutional Funds (open-end investment company).
Richard G. Dooley* Vice Chairman and Trustee of MML Trust
1295 State Street
Springfield, MA 01111
Age: 68
Consultant (since 1993), Executive Vice President and Chief Investment
Officer (1978- 1993), MassMutual; Director (since 1996), Investment
Technology Group, Inc.; Director, The Advest Group, Inc. (financial
services holding company), Hartford Steam Boiler Inspection and
Insurance Co., New England Education Loan Marketing Corporation;
Director, Kimco Realty Corp. (shopping center ownership and
management); Director (since 1993), Jefferies Group, Inc. (financial
services holding company); Director and Vice President, Oppenheimer
Acquisition Corporation (investment advisory holding company); Vice
Chairman (since 1995), Chairman (1982-1995), MassMutual Corporate
Investors, and Vice Chairman (since 1995), Chairman (1988-1995),
MassMutual Participation Investors (closed-end investment companies);
Director (1992-1995), Chairman (1982-1992) Concert Capital Management,
Inc. (former indirect investment advisory subsidiary of MassMutual);
Director (1993-1995), Luxonen S.A. (Swedish investment fund);
Supervisory Director (1991-1995), MassMutual/Carlson CBO N.V. Inc.
(collateralized bond fund); Director (1984-1993), MML Real Estate
Corporation (real estate management subsidiary of MassMutual Holding
Company) and MML Realty Management Corporation (subsidiary of
MassMutual Holding Company to manage real estate projects); Trustee
(since 1996), MassMutual Institutional Funds (open-end investment
company).
- --------------------------
* Trustee who is an "interested person" of MML Trust within the definition set
forth in Section 2(a)(19) of the 1940 Act.
-10-
<PAGE>
F. William Marshall, Jr. Trustee of MML Trust
1441 Main Street
Springfield, MA 01102
Age: 55
President, Chief Executive Officer and Director (since 1993), SIS Bank
(formerly, Springfield Institution for Savings); Chairman and Chief
Executive Officer (1990-1993), Bank of Ireland First Holdings, Inc. and
First New Hampshire Banks; Trustee (since 1996), MassMutual
Institutional Funds (open-end investment company).
Charles J. McCarthy Trustee of MML Trust
181 Eton Road
Longmeadow, MA 01106
Age: 74
Proprietor, Synectics Financial Company (venture capital activities,
business consulting and investments); Trustee (since 1994), MassMutual
Institutional Funds (open-end investment company).
John H. Southworth Trustee of MML Trust
195 Eton Road
Longmeadow, MA 01106
Age: 70
Chairman (since 1993) and President (1984-1992), Southworth Company
(manufacturer of paper and calendars); Director (since 1995), Trustee
(until 1995), SIS Bank (formerly, Springfield Institution for Savings);
Trustee (since 1994), MassMutual Institutional Funds (open-end
investment company).
Richard H. Ayers Advisory Board Member
1000 Stanley Drive
New Britain, CT 06053
Age: 55
Adviser to Chairman (since 1997), Chairman and Chief Executive Officer
(1989-1996) and Director (since 1985), The Stanley Works (manufacturer
of tools, hardware and specialty hardware and specialty hardware
products); Director (since 1986), Southern New England
Telecommunications Corp.; Director, (since 1988) Perkin-Elmer Corp.;
Trustee (since 1996), MassMutual Institutional Funds (open-end
investment company).
-11-
<PAGE>
David E. A. Carson Advisory Board Member
850 Main Street
Bridgeport, CT 06604
Age: 63
President and Chief Executive Office, People=s Bank; Director, United
Illuminating Co.; Trustee, American Skandia Trust (open-end investment
company); Trustee (since 1996), MassMutual Institutional Funds
(open-end investment company).
Richard W. Greene Advisory Board Member
University Of Rochester
Rochester, NY 14627
Age: 62
Executive Vice President and Treasurer (since 1986), University of
Rochester (private university); Trustee (since 1996), MassMutual
Institutional Funds (open-end investment company).
Beverly C. L. Hamilton Advisory Board Member
515 South Flower Street
Los Angeles, CA 90071
Age: 51
President, ARCO Investment Management Co.; Vice President, Atlantic
Richfield Company; Director (since 1992), Connecticut Natural Gas;
Director, Emerging Markets Growth Fund (closed-end investment company);
Trustee (since 1996), MassMutual Institutional Funds (open-end
investment company).
Stuart H. Reese President of MML Trust
1295 State Street
Springfield, MA 01111
Age: 42
Chief Executive Director (since 1997), Senior Vice President (1993-
1997), MassMutual; President (since 1995), Executive Vice President
(1993-1995), MassMutual Corporate Investors and MassMutual
Participation Investors (closed-end investment companies); Director
(since 1996), Antares Leveraged Capital Corp. (finance company) and
Charter Oak Capital Management, Inc. (investment adviser); President
and Director (since 1996), HYP Management Inc. (managing member of
MassMutual High Yield Partners LLC), and MMHC Investment Inc. (investor
in MassMutual High Yield Partners LLC);
President (since 1995), MassMutual Institutional Funds (open-end
investment company); Director (since 1994), MassMutual Corporate Value
Partners Limited (investor in debt and equity securities) and
MassMutual Corporate Value Limited (parent of MassMutual Corporate
Value Partners Limited); Supervisory Director (since 1994),
MassMutual/Carlson CBO N.V. Inc. (collateralized bond fund);
-12-
<PAGE>
Director (1994-1996), Pace Industries (aluminum die caster); Vice
President and Managing Director (1990- 1992), Capital Markets Group of
Aetna Life & Casualty Company; Chairman and President (1990-1993),
Aetna Financial Services, Inc.
Mary E. Wilson Senior Vice President of MML Trust
1295 State Street
Springfield, MA 01111
Age: 43
Senior Managing Director (since 1996), Vice President and Managing
Director (1991-1996), MassMutual; Senior Vice President (since 1996),
HYP Management, Inc. (managing member of MassMutual High Yield Partners
LLC) and MMHC Investment, Inc. (investor in MassMutual High Yield
Partners LLC); Vice President, MassMutual Participation Investors; Vice
President (since 1992), MassMutual Corporate Investors; Vice President
(1991-1995) Oppenheimer Investment Grade Bond Fund.
Hamline C. Wilson Vice President and Chief Financial
1295 State Street Officer of MML Trust
Springfield, MA 01111
Age: 60
Senior Managing Director (since 1996), Vice President and Managing
Director (1989- 1996), MassMutual; Vice President and Chief Financial
Officer (since 1994), MassMutual Institutional Funds (open-end
investment company); Vice President and Chief Financial Officer (since
1988), MassMutual Corporate Investors and MassMutual Participation
Investors (closed-end investment companies); Investment Officer (since
1992), Vice President (1983-1992), Concert Capital Management, Inc.
Stephen L. Kuhn Vice President and Secretary
1295 State Street of MML Trust
Springfield, MA 01111
Age: 50
Vice President and Associate General Counsel (since 1992), MassMutual;
Vice President and Secretary, MassMutual Institutional Funds,
MassMutual Participation Investors and MassMutual Corporate Investors;
President, MassMutual/Carlson CBO N.V. Inc. (collateralized bond fund);
Assistant Secretary (since 1996), Antares Leveraged Capital Corp.;
Chief Legal Officer and Assistant Secretary (since 1995), DLB
Acquisition Corporation (holding company for investment advisers);
Assistant Clerk (1994-1996), Chief Legal Officer (1993-1996), and Clerk
(1992-1994), Concert Capital Management, Inc.
-13-
<PAGE>
Judith A. Martini Vice President of MML Trust
1295 State Street
Springfield, MA 01111
Age: 49
Second Vice President, MassMutual.
Charles C. McCobb, Jr. Vice President of MML Trust
1295 State Street
Springfield, MA 01111
Age: 53
Managing Director (since 1997), Mass Mutual; Managing Director/Vice
President (1994-1997) Citicorp; Managing Director/Vice President (1973-
1994) Aetna Life & Casualty Company.
Raymond B. Woolson Treasurer of MML Trust
1295 State Street
Springfield, MA 01111
Age: 38
Senior Managing Director (since 1996), Second Vice President
(1992-1996), Director/Fund Account Administration (1989-1992),
MassMutual; Treasurer, MassMutual Corporate Investors, MassMutual
Participation Investors and MassMutual Institutional Funds; Vice
President and Chief Financial Officer (since 1996), HYP Management,
Inc. (managing member of MassMutual High Yield Partners LLC) and MMHC
Investment Inc. (investor in Mass Mutual High Yield Partners LLC).
Mark Ackerman Comptroller of MML Trust
1295 State Street
Springfield, Ma 01111
Age: 32
Investment Director (since 1996), Associate Director (1990-1994),
MassMutual; Controller (since 1997) Associate Treasurer (1995-1997),
MassMutual Participation Investors and MassMutual Corporate Investors;
Controller (since 1997) Associate Treasurer (1995-1997), MassMutual
Institutional Funds (open-end investment company).
The Trustees and officers of MML Trust named above, as a group, own less than
one percent of the shares of both the Trust and the Fund.
MML Trust's Declaration of Trust provides that MML Trust will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with MML
Trust, except if it is determined in the manner specified in the Declaration of
Trust that they have not acted in good faith in the reasonable belief that their
actions were in the best interests of MML Trust or that such indemnification
would relieve any Trustee or officer of any liability to MML Trust or its
shareholders by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of his or her duties.
The following table discloses actual compensation paid to non-interested
Trustees of MML Trust and members of its Advisory Board during the 1996 fiscal
year. MML Trust paid no compensation to any of its officers. MML Trust has no
pension or retirement plan, but does have a deferred compensation plan. One
Trustee elected in 1994 to receive these benefits over a three year period,
beginning in 1994 when he became 67 years old. All of the non-
-14-
<PAGE>
interested Trustees and the members of the Advisory Board also serve as
Trustees of one other investment company managed by MassMutual.
Compensation Table
For the Fiscal Year Completed December 31, 1996
<TABLE>
<CAPTION>
===============================================================================================================================
Total
Deferred Compen-
Compensation Estimated sation
Aggregate Plan Benefits Annual from
Compen- Accrued as Benefits MML
sation from Part of MML Upon Trust and
Name/Position MML Trust Trust Retire- Fund
Expenses ment Complex
===============================================================================================================================
<S> <C> <C> <C> <C>
Ronald J. Abdow, Trustee $16,000 N/A N/A $32,000
- -------------------------------------------------------------------------------------------------------------------------------
Mary E. Boland, Trustee $16,000* N/A N/A $32,000*
- -------------------------------------------------------------------------------------------------------------------------------
William F. Marshall, Trustee $11,333 N/A N/A $23,333
- -------------------------------------------------------------------------------------------------------------------------------
Charles J. McCarthy,
Trustee $17,000 N/A N/A $34,000
- -------------------------------------------------------------------------------------------------------------------------------
John H. Southworth, Trustee $17,000 $2,310 $39,345 $73,246
- -------------------------------------------------------------------------------------------------------------------------------
Richard H. Ayers, $4,000 N/A N/A $6,000
Advisory Board Member
- -------------------------------------------------------------------------------------------------------------------------------
David E.A. Carson, $4,000 N/A N/A $6,000
Advisory Board Member
- -------------------------------------------------------------------------------------------------------------------------------
Richard W. Greene, $4,000 N/A N/A $6,000
Advisory Board Member
- -------------------------------------------------------------------------------------------------------------------------------
Beverly C. L. Hamilton, $4,000 N/A N/A $6,000
Advisory Board Member
===============================================================================================================================
</TABLE>
- ----------------
*$8,000 of this amount was paid by MassMutual.
-15-
<PAGE>
V. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
MassMutual and MML Bay State are the owners of record of all of the outstanding
shares of the Fund and could be deemed to control the Fund. However, certain
owners of variable life insurance contracts that depend upon the investment
performance of the Fund will have the right to instruct MassMutual and MML Bay
State as to how shares of the Fund deemed attributable to their contracts shall
be voted. MassMutual and MML Bay State are required to vote shares attributable
to such contracts but for which no instructions were received, in proportion to
those votes for which instructions were received. MassMutual's address is 1295
State Street, Springfield, Massachusetts 01111. MML Bay State's address is 1295
State Street, Springfield, Massachusetts 01111.
VI. INVESTMENT MANAGEMENT AND OTHER SERVICES
MassMutual serves as investment manager of the Fund pursuant to an investment
management agreement between MassMutual and MML Trust on behalf of the Fund (the
"Investment Management Agreement"). Under the Investment Management Agreement,
MassMutual is authorized to engage in portfolio transactions on behalf of the
Fund, subject to such general or specific instructions as may be given by the
Board of Trustees of MML Trust. The Investment Management Agreement also
provides that MassMutual will perform all administrative functions relating to
the Fund and will bear all expenses of the Fund except: (1) taxes and corporate
fees payable to government agencies; (2) brokerage commissions and other capital
items payable in connection with the purchase or sale of the Fund's investments;
(3) interest on account of any borrowings by the Fund; (4) fees and expenses of
Trustees of MML Trust who are not interested persons, as defined in the
Investment Company Act of 1940, as amended (the A1940 Act@), of the Advisers or
MML Trust; (5) fees and expenses of the MML Trust's Advisory Board Members; (6)
fees of the Fund's independent certified public accountants; and (7) any
required trademark licensing fees. Under the Investment Management Agreement,
the Fund pays MassMutual a quarterly fee based on the average daily net assets
of the Fund at the annual rate of .40% of the first $100,000,000 of average
daily net asset value of the Fund; .38% of the next $150,000,000 and .36% of any
net assets thereafter.
The Investment Management Agreement with the Fund may be terminated by the Board
of Trustees of MML Trust, or by vote of a majority of the outstanding shares of
the Fund, or by MassMutual. Such termination requires 60 days' written notice to
be given and may be effected without the payment of any penalty. In addition,
such agreement automatically terminates: (1) unless its continuance is
specifically approved at least annually by the affirmative vote of a majority of
the Board of Trustees of MML Trust, which affirmative vote shall include a
majority of the members of the Board who are not interested persons (as defined
in the 1940 Act) of the Advisers or of MML Trust: or (2) upon its assignment.
-16-
<PAGE>
The Investment Management Agreement also provides that its continuance will be
submitted to the shareholders of the Fund in the event the use of the initials
"MML" is withdrawn from the Fund by MassMutual.
As permitted by the Investment Management Agreement, MassMutual has entered into
an investment sub-advisory agreement with Mellon Equity (the "Sub-Advisory
Agreement") whereby Mellon Equity agrees to serve as the Fund's investment
sub-adviser, providing day-to-day management of the Fund's investments.
MassMutual is ultimately responsible for providing investment advice to the Fund
and will continue to provide administrative and non-investment advisory services
to the Fund. For the investment advisory services Mellon Equity provides with
respect to the Fund, MassMutual pays Mellon Equity a monthly fee equal to an
annual rate of .09% of the first $100,000,000 of the average daily net asset
value of the Fund; .07% of the next $150,000,000 and .05% on net any assets
thereafter. The Sub-Advisory Agreement will terminate automatically upon its
assignment or upon the termination of the Investment Management Agreement by
Mellon Equity upon 90 days' written notice or by the Fund or MassMutual upon 60
days' written notice or by liquidation of the Fund.
As of December 31, 1991 Mellon Equity Associates became a Pennsylvania Business
Trust. Mellon Bank N.A. holds a 99% beneficial interest in Mellon Equity and
provides accounting services, record keeping and marketing services to Mellon
Equity. MMIP, Inc. holds a 1% beneficial interest in Mellon Equity. Mellon
Equity is also an indirect wholly-owned subsidiary of Mellon Bank Corporation.
Boston Safe Deposit and Trust Company, an indirect subsidiary of Mellon Bank
Corporation, acts as Custodian to the Fund. Boston Safe Deposit and Trust
Company is located at One Boston Place, Boston, Massachusetts 02108. Under its
Custody Agreement with the Fund, Boston Safe Deposit and Trust Company holds the
Fund's portfolio securities and keeps all necessary accounts and records.
Pursuant to the Sub-Advisory Agreement, the Custodian=s fees for its services to
the Fund will be paid by Mellon Equity. In order to secure payment by the
Custodian of overdrafts, the Fund has granted the Custodian a continuing
security interest in and a right of set off against assets in the Fund's account
with the Custodian.
First Data Investor Services Group, Inc., located at 4400 Computer Drive,
Westborough, Massachusetts 01581 provides fund accounting services for the Fund.
VII. PORTFOLIO TRANSACTIONS
The Fund has no obligation to deal with any dealer or group of dealers in the
execution of transactions in portfolio securities. The Fund's Investment
Management Agreement with MassMutual provides that MassMutual will follow such
practices in placing portfolio transactions for the Fund as may from time to
time be set forth in its Prospectus or specified by the Board of Trustees of MML
Trust. Consistent with this agreement, the present policy
-17-
<PAGE>
of the Fund and the Advisers is that the Advisers, in placing brokerage
transactions for the Fund, are to seek best execution by responsible brokerage
firms at reasonably competitive commission rates. Mellon Equity will not
consider the provision of brokerage research services (as such term is defined
in Section 28(e) of the Securities Exchange Act of 1934, as amended) in
allocating brokerage transactions for the Fund.
By virtue of the Sub-Advisory Agreement, Mellon Equity is subject to the same
rights, obligations and procedures that apply to MassMutual pursuant to its
Investment Management Agreement with the Fund. Mellon Equity assumes general
supervision over placing orders on behalf of the Fund for the purchase or sale
of portfolio securities. Allocation of brokerage transactions, including their
frequency, is made in the best judgment of Mellon Equity. The primary
consideration is to obtain executions at the most favorable and reasonable
commission rates in relation to the benefits received. Mellon Equity attempts to
achieve these results by choosing brokers to execute transactions based on (1)
their professional capabilities (including use of capital, clearance, and
settlement procedures, and participation in underwritings and corporate finance
issues), (2) the value and quality of their services, and (3) the comparative
brokerage commission rates which they offer.
Portfolio turnover will result from changes in the composition of the Index and
from purchases and redemptions of Fund shares and the reinvestment of Fund
dividends. Portfolio turnover may vary from year to year, as well as within a
year. High turnover rates are likely to result in comparatively greater
brokerage expenses. The overall reasonableness of brokerage commissions paid is
evaluated by Mellon Equity based upon its knowledge of available information as
to the general level of commissions paid by other institutional investors for
comparable services. The allocation of orders among brokers and the commission
rates paid are reviewed periodically by the Board of Trustees of MML Trust.
Purchases and sales of equity securities on a securities exchange are effected
through brokers who charge a negotiated commission for their services. Orders
may be directed to any broker, to the extent and in the manner permitted by
applicable law. In the over-the-counter market, securities are generally traded
on a "net" basis with dealers acting as principal for their own accounts without
a stated commission, although the price of the security usually includes a
profit to the dealer. In underwritten offerings, securities are purchased at a
fixed price that includes an amount of compensation to the underwriter,
generally referred to as the underwriter's concession or discount.
Except in the case of equity securities purchased by the Fund, purchases and
sales of securities usually will be principal transactions. Portfolio securities
normally will be purchased from or sold to dealers serving as market makers for
the securities at a net price. The Fund may purchase securities directly from
the issuer. Generally, money market securities are traded on a net basis and do
not involve brokerage commissions. The cost of the Fund's investment portfolio
securities transactions will consist primarily of dealer spreads and
underwriting commissions.
-18-
<PAGE>
Purchase and sale orders of the securities held by the Fund may be combined with
those of other investment companies and accounts which attempt to track an
equity index that Mellon Equity manages, and for which it has brokerage
placement authority, in the interest of seeking the best overall terms. When
Mellon Equity determines that a particular security should be bought or sold for
the Fund and other accounts managed by Mellon Equity, Mellon Equity undertakes
to allocate those transactions among the participants equitably.
Under the 1940 Act, persons affiliated with the Fund such as MassMutual, Mellon
Equity and, in some cases, their affiliates are prohibited from dealing with the
Fund as a principal in the purchase and sale of securities unless an exemptive
order allowing such transactions is obtained from the SEC or an exemption is
otherwise available.
IX. CAPITAL SHARES
Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for obligations of MML Trust. However, MML Trust's
Declaration of Trust disclaims liability of the shareholders, Trustees, or
officers of MML Trust for acts or obligations of MML Trust, which are binding
only on the assets and property of MML Trust, and requires that notice of such
disclaimer be given in each agreement, obligation, or instrument entered into or
executed by MML Trust or the Trustees of MML Trust. The Declaration of Trust
provides for indemnification out of MML Trust property for all loss and expense
of any shareholder held personally liable for the obligations of MML Trust.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which MML Trust itself
would be unable to meet its obligations. Management believes that in view of the
above the risk of personal liability to shareholders is remote.
X. PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
MML Trust is a no-load mutual fund. Fund shares are sold at their net asset
value as next computed after receipt of the purchase order, without the addition
of any selling commission or "sales load." The Fund redeems its shares at their
net asset value as next computed after receipt of the request for redemption.
The redemption price may be paid in cash or wholly or partly in kind if MML
Trust's Board of Trustees determine that such payment is advisable in the
interest of the remaining shareholders. In making such payment wholly or partly
in kind, the Fund will, as far as may be practicable, deliver securities or
property which approximate the diversification of its entire assets at the time.
No fee is charged on redemption. The redemption price may be more or less than
the shareholder's cost. Redemption payments will be paid within seven days after
receipt of the written request therefor by the Fund, except that the right of
redemption may be suspended or payments postponed when permitted by applicable
law and regulations.
-19-
<PAGE>
The net asset value of the Fund's shares is determined once daily as of the
close of the New York Stock Exchange on each day on which the Exchange is open
for trading (currently 4:00 p.m. for normal trading). The New York Stock
Exchange currently is not open for trading on New Year's Day, Martin Luther
King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day and on occasion is closed early or
entirely due to weather or other conditions. The net asset value of the Fund
share is the total net asset value of the Fund divided by the number of its
shares outstanding. The total net asset value of the Fund is determined by
computing the value of the total assets of the Fund and deducting total
liabilities, including accrued liabilities.
The manner of determining the value of the total assets of the Fund is briefly
discussed below. Equity securities are valued on the basis of valuations
furnished by a pricing service, authorized by the Board of Trustees, which
provides the last reported sale price for securities which are listed on a
national securities exchange, on the NASDAQ national market system, or which are
unlisted. If there is no reported sale price, the bid price of the prior trade
date will be used. Debt obligations with less than one year but more than sixty
days to maturity are valued on the basis of their market value, and debt
obligations having a maturity of sixty days or less are generally valued at
amortized cost when the Board of Trustees of MML Trust believes that amortized
cost approximates market value. In all other cases, assets (including restricted
securities) are valued at their fair value as determined in good faith by the
Board of Trustees of MML Trust, although the actual calculations may be made by
persons acting pursuant to the direction of the Board.
Futures contracts are valued based on the market price for the futures contract,
unless such price does not reflect the fair value of the contract, in which case
it will be valued by or under the direction of the Board of Trustees of MML
Trust.
XI. TAX STATUS
It is the policy of the Fund to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies. As a result, the Fund
will not be subject to federal income tax on any distributed net income or
capital gains. To meet these requirements, the Fund must, among other things,
(a) derive at least 90% of its gross income from dividends, interest, payments
with respect to certain securities loans, gains from the sale or other
disposition of stock, securities or foreign currencies, or other income
(including but not limited to gains from options, futures or forward contracts)
derived with respect to its business of investing in such stock, securities or
currencies; (b) derive less than 30% of its gross income from the sale or the
other disposition of securities and certain other assets held less than three
months (This provision was repealed effective for tax years beginning after
August 5, 1997.); (c) diversify its holdings so that, at the close of each
quarter of its taxable year, (i) at least 50% of the value of its total assets
consists of cash, cash items, U.S. government securities, securities of other
regulated investment companies, and other securities limited generally with
respect to any one issuer to a value not greater than 5% of the total assets of
the Fund and to not more than 10% of the outstanding voting securities of
-20-
<PAGE>
such issuer, and (ii) not more than 25% of the value of its assets is invested
in the securities of any issuer (other than U.S. government securities or
securities of other regulated investment companies); and (d) distribute in or
with respect to each taxable year at least 90% of its dividend, interest and
certain other income (including, in general, net short-term capital gains) for
such year.
The Treasury Department has issued Regulations under Internal Revenue Code
Section 817(h) that pertain to diversification requirements for variable life
insurance contracts. A variable contract based upon a separate account will not
receive favorable tax treatment as a life insurance contract unless the separate
account and underlying regulated investment company investments are adequately
diversified. In determining whether a separate account is adequately
diversified, in certain circumstances the separate account can look through to
the assets of the regulated investment company in which it has invested.
The Regulations require the Fund's assets to be diversified so that no single
investment represents more than 55% of the value of the Fund's total assets, no
two investments represent more than 70% of the Fund's total assets, no three
investments represent more than 80% of the Fund's total assets and no four
investments represent more than 90% of the Fund's total assets. A "safe harbor"
is available to a separate account if it meets the diversification tests
applicable to registered investment companies and not more than 55% of its
assets constitute cash, cash items, government securities and securities of
other registered investment companies.
The applicable Regulations treat all securities of the same issuer as a single
investment. In the case of "government securities", each government agency or
instrumentality shall be treated as a separate issuer for the purpose of the
diversification test (although not for the purpose of the "safe harbor" test
described above). MML Trust intends to comply with these diversification
requirements.
The Fund intends to declare capital gain and ordinary income dividends by the
end of each calendar year and to distribute such dividends no later than January
31 of the following year to the extent necessary to avoid the 4% excise tax on
undistributed regulated investment company income enacted by the Tax Reform Act
of 1986. The 4% excise applies to the excess of the required distribution for
the calendar year over the amount treated as distributed for that year. The
required distribution equals 98% of the Fund's ordinary income for the calendar
year plus 98% of its capital gain net income for the one year period ending
October 31 (or December 31, if the Fund so elects) and any shortfall of income
or gains from the prior year not previously so distributed.
-21-
<PAGE>
XII. CERTAIN TAX AND ACCOUNTING INFORMATION
As previously indicated, it is the policy of the Fund to meet the requirements
of the Internal Revenue Code to qualify as a regulated investment company under
the federal tax law. One of these requirements is that less than 30% of its
gross income can be derived from gains from the sale or other disposition of
certain assets (including securities) held for or considered under Internal
Revenue Code rules to have been held for less than three months. Accordingly,
the Fund will be restricted in selling newly acquired positions, engaging in
certain option writing activities and certain hedging activities. This 30%
requirement was repealed effective for tax years beginning after August 5, 1997.
Special rules (including mark-to-market, straddle and wash sale rules) exist for
determining the timing of recognition of income or loss, the character of such
income or loss, and the holding periods of certain of the Fund's assets in the
case of certain transactions involving futures contracts, forward contracts and
options. MML Trust will endeavor to make any available elections pertaining to
such transactions in a manner believed to be in the best interest of MML Trust.
XIII. INVESTMENT PERFORMANCE
The Fund may advertise its total return and its holding period return. Total
return quotations will be based upon a stated period and will be computed by
finding the average annual compounded rate of return over the stated period that
would equate an initial amount invested to the ending redeemable value of the
investment (assuming reinvestment of all distributions), according to the
following formula:
P(1 + T)/n/ = ERV Where: P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value at the end of the
stated period of a hypothetical $1,000 payment
made at the beginning of the stated period.
Holding period return will be based upon a stated period and will be computed by
dividing the ending redeemable value of a hypothetical initial payment by the
value of the initial investment (assuming reinvestment of all distributions).
Each investment performance figure will be carried to the nearest hundredth of
one percent. These investment performance figures do not reflect charges imposed
by the separate investment accounts invested in the Fund which, if included,
would decrease the performance figures.
-22-
<PAGE>
XIV. INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P. is the Fund's independent accountant, providing audit
and tax return preparation services and assistance and consultation in
connection with review of various SEC filings.
XV. COUNSEL
Ropes & Gray, One International Place, Boston, Massachusetts 02110, as counsel
for the Trust, has rendered its opinion as to certain legal matters regarding
the due authorization and valid issuance of the shares being sold pursuant to
the Fund's Prospectus.
The name MML Series Investment Fund is the designation of Trustees under an
Agreement and Declaration of Trust dated December 19, 1984, as amended from time
to time. The obligations of such Trust are not personally binding upon, nor
shall resort be had to the property of, any of the Trustees, shareholders,
officers, employees or agents of such Trust, but only the property of the
relevant series of MML Trust shall be bound.
-23-
<PAGE>
MASSMUTUAL EQUITY INDEX FUND
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1997
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments at value (See Schedule of Investments)
(Notes 2A, 2B, and 4)
Equities (Identified cost: $20,113,101).......................... $22,539,055
Short-term investments (Identified cost: $4,937)................. 4,937
-----------
TOTAL INVESTMENTS.............................................. 22,543,992
Interest and dividends receivable................................ 39,664
-----------
TOTAL ASSETS................................................... 22,583,656
-----------
LIABILITIES
Investment management fee payable (Note 3)....................... 29,505
Accrued liabilities.............................................. 12,034
-----------
TOTAL LIABILITIES.............................................. 41,539
-----------
NET ASSETS....................................................... $22,542,117
===========
NET ASSETS CONSIST OF:
Series shares (par value $.01 per share;
an unlimited number authorized)(Note 5)........................ $ 2,001
Additional paid-in capital....................................... 20,009,405
Undistributed net investment income (Notes 2C and 2D)............ 100,493
Undistributed net realized loss on investments................... (673)
Net unrealized appreciation on investments (Note 2A)............. 2,430,891
-----------
NET ASSETS....................................................... $22,542,117
===========
Outstanding series shares........................................ 2,001,143
===========
NET ASSET VALUE PER SHARE........................................ $11.26
===========
</TABLE>
See Notes to Financial Statements.
F-1
<PAGE>
MASSMUTUAL EQUITY INDEX FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED AUGUST 31, 1997*
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME (Note 2B)
Dividends......................................................... $ 137,327
Interest.......................................................... 11,040
----------
TOTAL INCOME.................................................... 148,367
----------
EXPENSES
Investment management fee (Note 3)................................ 29,505
Audit fees........................................................ 9,877
Trustees' fees.................................................... 8,432
Other............................................................. 60
----------
TOTAL EXPENSES.................................................. 47,874
----------
NET INVESTMENT INCOME (Notes 2C and 2D)........................... 100,493
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(Notes 2A, 2B, 2C and 2D)
Net realized loss on investments (Notes 2B, 2C and 2D)............ (673)
----------
Net unrealized appreciation on investments (Note 2A).............. 2,430,891
----------
NET GAIN.......................................................... 2,430,218
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. $2,530,711
==========
</TABLE>
*The Fund commenced operations on May 1, 1997.
See Notes to Financial Statements.
F-2
<PAGE>
MASSMUTUAL EQUITY INDEX FUND
STATEMENT OF CHANGES IN NET ASSETS
For The Period Ended August 31, 1997*
(Unaudited)
<TABLE>
<S> <C>
Increase (decrease) in net assets
Operations:
Net investment income.......................................... $ 100,493
Net realized loss on investments............................... (673)
Net unrealized appreciation on investments..................... 2,430,891
-----------
Net increase in net assets resulting........................... 2,530,711
from operations
Net increase in capital share transactions (Note 5)............ 20,011,406
-----------
Total increase............................................... 22,542,117
NET ASSETS, at beginning of the period......................... 0
-----------
NET ASSETS, at end of the period............................... $22,542,117
===========
Undistributed net investment income included in net
assets at end of the period.................................. $ 100,493
===========
</TABLE>
*The Fund commenced operations on May 1, 1997.
See Notes to financial Statements.
F-3
<PAGE>
MASSMUTUAL EQUITY INDEX FUND
FINANCIAL HIGHLIGHTS
Selected per share data for a series share outstanding throughout the period.
<TABLE>
<CAPTION>
Period
Ended
August 31, 1997*
(Unaudited)
---------------
<S> <C>
Net asset value:
Beginning of period..................................................... $ 10.000
--------
Income From Investment Operations:
Net investment income..................................................... .05
Net realized and unrealized gain on investments........................... 1.21
--------
Total from investment operations.......................................... 1.26
--------
Net asset value:
End of period........................................................... $ 11.26
========
Total return***........................................................... 12.60%
Net assets (in millions):
End of period........................................................... $ 22.54
Ratio of operating expenses to average net assets......................... 0.21%**
Ratio of net investment income to average net assets...................... 0.45%**
Portfolio turnover rate................................................... 0%
</TABLE>
* The Fund commenced operations on May 1, 1997.
** Percentages represent results for the period and are not annualized.
*** Total return information shown in the Financial Highlights table does not
reflect expenses that apply at the separate account level or to related
insurance products. Inclusion of these charges would reduce the total return
figure for the period shown.
See Notes to Financial Statements.
F-4
<PAGE>
MML Equity Index Fund
SCHEDULE OF INVESTMENTS
August 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
------ ---------
<S> <C> <C>
EQUITIES - 99.99%
Advertising - 0.10%
Interpublic Group of Companies, Inc. ....... 450 $ 21,938
----------- -----------
Aerospace - 2.02%
AlliedSignal Inc. .......................... 900 74,306
Boeing Company ............................. 3,310 180,188
General Dynamics Corporation ............... 200 15,925
Lockheed Martin Corporation ................ 600 62,213
Northrop Grumman Corporation ............... 200 23,413
Textron, Inc. .............................. 600 37,388
United Technologies Corporation ............ 800 62,450
----------- -----------
6,610 455,883
----------- -----------
Airlines - 0.30%
AMR Corporation ............................ 300 30,225
Delta Air Lines, Inc. ...................... 200 17,300
Southwest Airlines Company ................. 500 14,000
USAirways Group, Inc. ...................... 200 6,825
----------- -----------
1,200 68,350
----------- -----------
Apparel, Textiles, Shoes - 0.38%
Fruit of the Loom Inc. ..................... 300 8,025
Liz Claiborne Inc. ......................... 200 8,913
NIKE, Inc., Class B ........................ 900 48,038
Reebok International, Inc. ................. 100 4,394
VF Corporation ............................. 200 17,675
----------- -----------
1,700 87,045
----------- -----------
Automobiles - 1.77%
Chrysler Corporation ....................... 2,200 77,275
Ford Motor Company ......................... 3,800 163,400
General Motors Corporation ................. 2,400 150,600
Navistar International Corporation* ........ 300 7,444
----------- -----------
8,700 398,719
----------- -----------
Automobile Parts & Equipment - 0.44%
AutoZone, Inc. ............................. 400 11,300
Cummins Engine, Inc. ....................... 100 7,694
Dana Corporation ........................... 300 13,819
Echlin Inc. ................................ 200 7,413
Genuine Parts Company ...................... 600 18,525
Johnson Controls Inc. ...................... 300 14,306
Pep Boys-Manny, Moe & Jack ................. 200 5,300
TRW Inc. ................................... 400 20,850
----------- -----------
2,500 99,207
----------- -----------
Banks - 8.48%
Banc One Corporation ....................... 1,300 69,713
Bank of New York Inc. ...................... 1,300 58,013
BankAmerica Corporation .................... 2,200 144,787
BankBoston Corporation ..................... 500 41,563
Bankers Trust, New York Corporation ........ 200 20,750
Barnett Banks Inc. ......................... 600 40,875
Chase Manhattan Corporation ................ 1,400 155,662
Citicorp ................................... 1,500 191,437
Comerica Inc. .............................. 300 21,244
CoreStates Financial Corporation ........... 800 49,200
Fifth Third Bancorporation ................. 450 26,325
First Chicago Corporation .................. 1,000 71,750
First Union Corporation .................... 1,800 86,513
Fleet Financial Group Inc. ................. 800 51,550
KeyCorp (New) .............................. 700 42,438
MBNA Corporation ........................... 1,100 42,281
Mellon Bank Corporation .................... 1,000 48,125
Morgan Stanley, Dean Witter, Discover &
Company ................................... 1,825 87,828
Morgan (J.P.) & Company, Inc. .............. 600 64,350
National City Corporation .................. 700 39,550
NationsBank Corporation .................... 2,500 148,437
Norwest Corporation ........................ 1,100 63,181
PNC Bank Corporation ....................... 1,500 64,875
Republic New York Corporation .............. 200 21,413
State Street Corporation ................... 500 24,938
SunTrust Banks Inc. ........................ 800 50,000
U.S. Bancorp ............................... 877 76,792
Wachovia Corporation ....................... 500 31,125
Wells Fargo & Company ...................... 300 76,275
----------- -----------
28,352 1,910,990
----------- -----------
Broadcasting - 0.03%
Meredith Corporation ....................... 200 6,000
----------- -----------
Building Materials - 0.70%
Centex Corporation ......................... 100 5,438
Crane Company .............................. 200 8,825
Fleetwood Enterprises ...................... 100 3,113
Home Depot Inc. ............................ 2,250 106,172
Kaufman & Broad Home Corporation ........... 100 2,000
Masco Corporation .......................... 500 22,219
Pall Corporation ........................... 400 9,475
----------- -----------
3,650 157,242
----------- -----------
Business Equipment and Supplies - 2.05%
Avery Dennison Corporation ................. 400 16,425
Ikon Office Solutions ...................... 400 10,400
International Business Machines
Corporation ............................... 3,200 322,800
Pitney Bowes Inc. .......................... 500 38,188
Xerox Corporation .......................... 1,000 75,500
----------- -----------
5,500 463,313
----------- -----------
Business Services - 0.32%
CUC International Inc. ..................... 1,300 30,550
Deluxe Corporation ......................... 200 6,588
Federal Express Corporation ................ 400 26,575
Harland (John H.) Company .................. 100 1,981
Moore Corporation Ltd. ..................... 300 5,944
----------- -----------
2,300 71,638
----------- -----------
Chemicals and Plastics - 3.51%
Air Products & Chemicals Inc. .............. 400 32,625
Dow Chemical Company ....................... 800 70,800
duPont (E.I.) deNemours & Company .......... 3,600 224,324
Eastman Chemical Company ................... 200 11,963
Ecolab Inc. ................................ 200 9,013
Engelhard Corporation ...................... 500 10,438
FMC Corporation ............................ 100 8,306
Grace (W.R.) & Company ..................... 200 13,763
Great Lakes Chemical Corporation ........... 200 9,300
Hercules, Inc. ............................. 300 15,506
Kerr-McGee Corporation ..................... 200 12,425
Mallinckrodt Group Inc. .................... 300 10,913
</TABLE>
F-5
<PAGE>
SCHEDULE OF INVESTMENTS (Continued)
August 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
------ ---------
<S> <C> <C>
EQUITIES (Continued)
Chemicals and Plastics (Continued)
Minnesota Mining & Manufacturing Company ..... 1,300 $ 116,837
Monsanto Company ............................. 1,900 83,481
Morton International Inc. .................... 400 13,300
Nalco Chemical Company ....................... 200 8,000
Praxair Inc. ................................. 500 26,719
Raychem Corporation .......................... 100 9,306
Rockwell International Corporation ........... 700 42,000
Rohm & Haas Company .......................... 200 19,163
Sigma-Aldrich Corporation .................... 300 9,788
Union Camp Corporation ....................... 200 11,863
Union Carbide Corporation .................... 400 20,525
----------- -----------
13,200 790,358
----------- -----------
Coal - 0.27%
CSX Corporation .............................. 700 40,031
Eastern Enterprises .......................... 100 3,569
Fluor Corporation ............................ 300 16,838
----------- -----------
1,100 60,438
----------- -----------
Communication Equipment - 1.69%
Cabletron Systems, Inc. ...................... 500 15,125
GTE Corporation .............................. 3,000 133,687
Harris Corporation ........................... 100 8,713
Motorola, Inc. ............................... 1,900 139,412
National Semiconductor Corporation ........... 400 13,700
Scientific-Atlanta Inc. ...................... 200 4,350
Tellabs, Inc. ................................ 1,100 65,656
----------- -----------
7,200 380,643
----------- -----------
Computer Hardware, Software or Services - 8.59%
Advanced Micro Devices Inc. .................. 400 14,975
Amdahl Corporation ........................... 300 3,694
AMP Inc. ..................................... 700 35,000
Apple Computer Inc. .......................... 400 8,700
Autodesk, Inc. ............................... 200 8,750
Automatic Data Processing Inc. ............... 900 41,006
Bay Networks, Inc. ........................... 600 21,225
Ceridian Corporation ......................... 200 6,913
CISCO Systems Inc. ........................... 2,100 158,288
Compaq Computer Corporation .................. 2,000 131,000
Computer Associates International Inc. ....... 1,100 73,563
Computer Sciences Corporation ................ 200 14,875
Data General Corporation ..................... 100 3,594
Dell Computer Corporation .................... 1,200 98,475
Digital Equipment Corporation ................ 500 21,500
Honeywell, Inc. .............................. 400 27,650
Intel Corporation ............................ 5,200 479,049
Microsoft Corporation ........................ 3,900 515,530
Nextlevel Systems ............................ 500 10,031
Novell Inc. .................................. 1,100 10,313
Oracle Systems Corporation ................... 3,300 125,812
Parametric Technology Corporation ............ 400 18,575
Seagate Technologies Inc. .................... 800 30,550
Sun Microsystems Inc. ........................ 1,200 57,600
Tandem Computers Inc. ........................ 400 13,600
Unisys Corporation ........................... 500 5,656
----------- -----------
26,600 1,935,924
----------- -----------
Computer - Semiconductors - 0.43%
Applied Materials ............................ 600 $ 56,625
EMC Corporation .............................. 800 41,050
----------- -----------
1,400 97,675
----------- -----------
Consumer Non-Durables - 3.47%
Corning Inc. ................................. 1,000 52,875
General Electric Corporation ................. 10,600 662,500
Grainger (W.W.), Inc. ........................ 200 17,763
Lowe's Companies Inc. ........................ 600 20,738
Newell Company ............................... 500 19,688
Whitman Corporation .......................... 400 9,800
----------- -----------
13,300 783,364
----------- -----------
Consumer Services - 0.19%
Block (H & R) Inc. ........................... 300 11,775
Manor Care Inc. .............................. 200 6,175
Service Corporation International ............ 800 25,600
----------- -----------
1,300 43,550
----------- -----------
Consumer Staples - 0.08%
Pioneer Hi-Bred International Inc. ........... 200 17,138
----------- -----------
Containers - 0.10%
Ball Corporation ............................. 100 3,288
Crown Cork & Seal Company Inc. ............... 400 20,350
----------- -----------
500 23,638
----------- -----------
Cosmetics - Toiletry - 0.17%
Alberto-Culver Company, Class B .............. 200 5,838
Avon Products Inc. ........................... 500 32,031
----------- -----------
700 37,869
----------- -----------
Diversified - 1.12%
Aeroquip-Vickers, Inc. ....................... 100 5,588
Cognizant Corporation ........................ 500 21,000
Fortune Brands, Inc. ......................... 500 17,188
Loews Corporation ............................ 300 30,581
Raytheon Company ............................. 700 38,500
Tyco International Ltd. ...................... 500 39,219
Unilever N.V ................................. 500 100,625
----------- -----------
3,100 252,701
----------- -----------
Electrical Equipment - 1.38%
Cooper Industries Inc. ....................... 300 15,994
Foster Wheeler Corporation ................... 100 4,569
General Signal Corporation ................... 100 4,338
Hewlett-Packard Company ...................... 3,300 202,330
Tektronix Inc. ............................... 100 5,556
Texas Instruments Inc. ....................... 600 68,175
Thomas & Betts Corporation ................... 200 11,200
----------- -----------
4,700 312,162
----------- -----------
Electronics - 0.73%
Eaton Corporation ............................ 200 18,013
EG&G Inc. .................................... 200 4,250
Emerson Electric Company ..................... 1,400 76,563
Tandy Corporation ............................ 200 13,275
Westinghouse Electric Corporation ............ 2,000 51,500
----------- -----------
4,000 163,601
----------- -----------
</TABLE>
F-6
<PAGE>
SCHEDULE OF INVESTMENTS (Continued)
August 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
------ ---------
<S> <C> <C>
EQUITIES (Continued)
Energy and Resources - 0.20%
Burlington Resources, Inc............................ 400 $ 20,250
Dresser Industries Inc............................... 600 25,050
----------- -----------
1,000 45,300
----------- -----------
Entertainment - 1.56%
Brunswick Corporation................................ 300 9,150
Disney (Walt) Company................................ 2,100 161,306
Harcourt General Corporation......................... 300 14,288
Hasbro Inc........................................... 400 10,750
ITT Corporation (New)*............................... 400 25,125
King World Productions, Inc.......................... 100 3,975
Mattel, Inc.......................................... 900 30,094
Time Warner Inc...................................... 1,900 97,850
----------- -----------
6,400 352,538
----------- -----------
Environmental Control - 0.02%
Safety-Kleen Corporation............................. 200 4,038
----------- -----------
Financial Services - 3.68%
American Express Company............................. 1,500 116,625
American General Corporation......................... 710 34,213
Beneficial Corporation............................... 200 14,313
Countrywide Credit Industries........................ 400 13,475
Dow Jones & Company Inc.............................. 300 12,844
Equifax, Inc......................................... 400 11,775
Federal Home Loan Mortgage Corporation............... 2,300 74,894
Federal National Mortgage Association................ 3,500 154,000
First Data Corporation............................... 1,500 61,594
Green Tree Financial Corporation..................... 500 21,969
Household International, Inc......................... 300 33,281
Merrill Lynch & Company Inc.......................... 1,000 61,500
Pulte Corporation.................................... 100 3,663
Salomon Inc.......................................... 400 23,950
Schwab (Charles) Corporation......................... 700 29,706
SunAmerica Inc....................................... 400 21,550
Temple-Inland Inc.................................... 200 12,900
Travelers Group Inc.................................. 2,000 127,000
----------- -----------
16,410 829,252
----------- -----------
Food and Beverages - 7.06%
Albertson's, Inc..................................... 800 27,500
Anheuser-Busch Companies Inc......................... 1,600 68,200
Campbell Soup Company................................ 1,500 69,563
Coca-Cola Company.................................... 7,900 452,768
ConAgra Inc.......................................... 700 45,019
Coors (Adolph) Company, Class B...................... 100 3,688
CPC International Inc................................ 500 44,563
Fleming Companies Inc................................ 100 1,888
Heinz (H.J.) Company................................. 1,200 49,950
Hershey Foods Corporation............................ 500 26,688
Kellogg Company...................................... 1,400 62,650
PepsiCo Inc.......................................... 4,900 176,400
Philip Morris Companies Inc.......................... 7,800 340,274
Quaker Oats Company.................................. 700 32,900
Ralston-Purina Group................................. 300 27,000
Sara Lee Corporation................................. 2,000 80,500
Seagram Company Ltd.................................. 1,200 41,925
UST Inc.............................................. 600 17,325
Wrigley (Wm) Jr. Company............................. 300 21,750
----------- -----------
34,100 1,590,551
----------- -----------
Food Distribution - 0.77%
Archer-Daniels-Midland Company....................... 1,890 40,871
Costco Companies Inc................................. 700 25,244
General Mills Inc.................................... 500 32,063
Giant Food, Inc., Class A............................ 200 6,500
Great Atlantic & Pacific Tea Company Inc............. 100 2,506
Kroger Company....................................... 800 24,100
Supervalu Inc........................................ 200 7,850
Sysco Corporation.................................... 500 17,750
Winn Dixie Stores Inc................................ 500 16,844
----------- -----------
5,390 173,728
----------- -----------
Freight and Shipping - 0.04%
Caliber Systems Inc.................................. 200 8,350
----------- -----------
Glass Products - 0.20%
Owens Corning Fiberglass Corporation................. 200 8,113
PPG Industries Inc................................... 600 37,800
----------- -----------
800 45,913
----------- -----------
Health Care Facilities - 0.49%
Beverly Enterprises.................................. 300 4,894
Columbia/HCA Healthcare Corporation.................. 2,100 66,281
Humana Inc........................................... 500 11,781
Tenet Healthcare Corporation......................... 1,000 27,250
----------- -----------
3,900 110,206
----------- -----------
Health Care Products - 3.41%
Abbott Laboratories.................................. 2,400 143,850
Allergan, Inc........................................ 200 6,475
Bausch & Lomb Inc.................................... 200 8,213
Becton, Dickinson & Company.......................... 400 19,175
Merck & Company Inc.................................. 3,900 358,068
Pfizer, Inc.......................................... 4,200 232,574
----------- -----------
11,300 768,355
----------- -----------
Holding Companies - 0.14%
Providian, LLC....................................... 300 11,175
Public Service Enterprise............................ 800 19,850
----------- -----------
1,100 31,025
----------- -----------
Home Appliances - 0.40%
Black & Decker Corporation........................... 300 11,493
Illinois Tool Works Inc.............................. 800 38,700
Maytag Corporation................................... 300 8,231
Snap-On, Inc......................................... 200 8,400
Stanley Works........................................ 300 12,769
Whirlpool Corporation................................ 200 11,450
----------- -----------
2,100 91,043
----------- -----------
Home Furnishings and Housewares - 0.80%
American Home Products Corporation................... 2,000 144,000
Armstrong World...................................... 100 6,844
Rubbermaid, Inc...................................... 500 12,500
Springs Industries, Inc.............................. 200 9,400
Tupperware Corporation............................... 200 6,713
----------- -----------
3,000 179,457
----------- -----------
</TABLE>
F-7
<PAGE>
SCHEDULE OF INVESTMENTS (Continued)
August 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
------ ---------
<S> <C> <C>
EQUITIES (Continued)
Hotels and Restaurants - 0.90%
Darden Restaurants Inc............................... 500 $ 5,031
Harrah's Entertainment Corporation................... 300 6,731
HFS, Inc.*........................................... 400 22,274
Hilton Hotels Corporation............................ 800 24,550
Marriott International Inc........................... 400 26,625
McDonald's Corporation............................... 2,300 108,819
Wendy's International Inc............................ 400 9,625
----------- -----------
5,100 203,655
----------- -----------
Insurance - 3.91%
Aetna Life & Casualty Company........................ 500 47,718
Allstate Corporation................................. 1,500 109,592
American International Group, Inc.................... 2,250 212,342
AON Corporation...................................... 600 30,562
Chubb Corporation.................................... 600 40,124
CIGNA Corporation.................................... 300 54,919
Conseco, Inc......................................... 500 21,500
General Re Corporation............................... 200 38,774
Hartford Financial Services Group, Inc............... 400 31,900
Jefferson-Pilot Corporation.......................... 200 13,913
Lincoln National Corporation......................... 400 26,774
Marsh & McLennan Companies, Inc...................... 600 40,950
MBIA Inc............................................. 200 22,650
MGIC Investment Corporation.......................... 400 20,125
SAFECO Corporation................................... 400 19,650
St. Paul Companies Inc............................... 200 14,675
Torchmark Corporation................................ 400 15,075
Transamerica Corporation............................. 200 19,713
United Healthcare Corporation........................ 600 29,175
UNUM Corporation..................................... 400 16,500
USF & G Corporation.................................. 400 8,775
Washington Mutual Inc................................ 760 45,505
----------- -----------
12,010 880,911
----------- -----------
Machinery and Heavy Equipment - 0.81%
Caterpillar Inc...................................... 1,200 69,674
Cincinnati Milacron Inc.............................. 100 2,575
Deere & Company...................................... 800 44,800
Dover Corporation.................................... 400 27,625
Ingersoll-Rand Company............................... 400 24,050
Parker-Hannifin Corporation.......................... 200 12,863
----------- -----------
3,100 181,587
----------- -----------
Manufacturing - 1.45%
Alcan Aluminum Ltd................................... 700 24,456
Aluminum Company of America.......................... 600 49,350
Boston Scientific Corporation*....................... 700 49,350
Briggs & Stratton Corporation........................ 100 4,831
Brown-Forman Corporation, Class B.................... 200 9,650
Case Corporation..................................... 300 20,118
LSI Logic Corporation*............................... 500 16,094
Micron Technology Inc................................ 700 31,193
PACCAR Inc........................................... 200 9,475
Reynolds Metals Company.............................. 200 14,138
Sherwin-Williams Company............................. 600 16,463
Silicon Graphics Inc.*............................... 600 16,463
Thermo Electron Corporation.......................... 400 16,100
3COM Corporation*.................................... 1,000 49,937
----------- -----------
6,800 327,618
----------- -----------
Medical Instruments, Services and Supplies - 0.99%
Bard (C.R.), Inc..................................... 200 6,900
Baxter International Inc............................. 900 47,868
Biomet, Inc.*........................................ 300 6,225
Cardinal Health, Inc................................. 300 19,875
Guidant Corporation.................................. 300 26,344
HEALTHSOUTH Corporation.............................. 1,100 27,431
Medtronic, Inc....................................... 700 63,262
Shared Medical Systems Corporation................... 100 4,900
St. Jude Medical, Inc.*.............................. 300 11,419
United States Surgical Corporation................... 300 9,881
----------- -----------
4,500 224,105
----------- -----------
Metals and Mining - 0.69%
Allegheny Teledyne, Inc.............................. 600 18,525
ASARCO Inc........................................... 100 3,075
Barrick Gold Corporation............................. 1,100 25,025
Battle Mountain Gold Company......................... 700 3,981
Cyprus Amax Minerals Company......................... 300 7,575
Echo Bay Mines Ltd................................... 400 2,025
Freeport McMoRan Copper & Gold, Class B.............. 600 16,800
Homestake Mining Company............................. 500 7,000
Inco Ltd............................................. 600 16,238
Newmont Mining Corporation........................... 472 19,972
Phelps Dodge Corporation............................. 300 24,131
Placer Dome, Inc..................................... 700 11,638
----------- -----------
6,372 155,985
----------- -----------
Miscellaneous - 0.48%
S & P Depositary Receipt............................. 1,200 108,450
----------- -----------
Natural Gas - 0.47%
Columbia Gas System, Inc............................. 200 13,200
Consolidated Natural Gas Company..................... 300 17,719
Enron Corporation.................................... 1,100 42,419
NICOR Inc............................................ 100 3,631
ONEOK Inc............................................ 100 3,238
Pacific Enterprises Inc.............................. 300 9,881
Sonat, Inc........................................... 300 14,944
----------- -----------
2,400 105,032
----------- -----------
News and Publishing - 0.88%
Gannett Company Inc.................................. 500 48,718
Kimberly-Clark Corporation........................... 1,800 85,387
Knight-Ridder Inc.................................... 300 15,188
New York Times Company, Class A...................... 300 14,175
Times Mirror Company (New), Class A.................. 300 15,206
Tribune Company...................................... 400 19,775
----------- -----------
3,600 198,449
----------- -----------
Oil - 8.41%
Amerada Hess Corporation............................. 300 17,438
Amoco Corporation.................................... 1,600 151,300
Anardko Pete Company................................. 200 14,688
Apache Corporation................................... 300 11,906
Ashland, Inc......................................... 200 10,025
Atlantic Richfield Company........................... 1,000 75,000
Baker Hughes Inc..................................... 500 21,188
Chevron Corporation.................................. 2,000 154,873
Coastal Corporation.................................. 300 17,325
</TABLE>
F-8
<PAGE>
SCHEDULE OF INVESTMENTS (Continued)
August 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
------ ---------
<S> <C> <C>
EQUITIES (Continued)
Oil (Continued)
Exxon Corporation.................................... 7,900 $ 483,380
Halliburton Company.................................. 800 38,200
Louisiana Land & Exploration Company................. 100 7,656
McDermott International, Inc......................... 200 6,450
Mobil Corporation.................................... 2,600 189,150
Occidental Petroleum Corporation..................... 1,100 25,781
Oryx Energy Company*................................. 400 10,575
Pennzoil Company..................................... 100 7,719
Phillips Petroleum Company........................... 900 42,805
Royal Dutch Petroleum Company........................ 6,800 345,100
Tenneco Inc.......................................... 500 24,281
Texaco Inc........................................... 800 92,200
Union Pacific Corporation............................ 800 51,950
Union Pacific Resources Group........................ 800 20,000
Unocal Corporation................................... 1,200 46,874
USX-Marathon Group Common (New)...................... 900 29,306
----------- -----------
32,300 1,895,170
----------- -----------
Oil Equipment and Services - 0.67%
Helmerich & Payne, Inc............................... 200 14,125
Schlumberger Ltd..................................... 1,600 121,900
Western Atlas, Inc. *................................ 200 15,850
----------- -----------
2,000 151,875
----------- -----------
Paper and Forest Products - 0.92%
Bemis Company Inc.................................... 200 8,788
Boise Cascade Corporation............................ 200 7,913
Champion International Corporation................... 300 17,756
Fort James Corporation............................... 300 12,600
Georgia-Pacific Corporation.......................... 300 27,375
Harnischfeger Industries Inc......................... 100 4,013
International Paper Company.......................... 1,000 52,750
Louisiana Pacific Corporation........................ 300 6,638
Mead Corporation..................................... 100 7,094
Potlatch Corporation................................. 100 4,669
Stone Container Corporation.......................... 400 6,900
Weyerhaeuser Company................................. 600 34,650
Willamette Industries Inc............................ 200 15,950
----------- -----------
4,100 207,096
----------- -----------
Personal Items - 2.78%
Colgate-Palmolive Company............................ 800 50,200
Gillette Company..................................... 1,800 149,063
International Flavors & Fragrances, Inc.............. 300 15,338
Jostens Inc.......................................... 200 4,825
Proctor & Gamble Company............................. 2,200 292,737
Warner-Lambert Company............................... 900 114,355
----------- -----------
6,200 626,518
----------- -----------
Petroleum Refining - 0.19%
Rowan Companies...................................... 300 8,962
Sun Company.......................................... 300 11,662
Williams Companies Inc............................... 500 23,281
----------- -----------
1,100 43,905
----------- -----------
Pharmaceuticals - 3.86%
ALZA Corporation*.................................... 300 8,700
Bristol-Myers Squibb Company......................... 3,500 266,000
Johnson & Johnson.................................... 4,300 243,755
Lilly (Eli) & Company................................ 1,700 177,862
Pharmacia & Upjohn Inc.*............................. 1,700 57,906
Schering-Plough Corporation.......................... 2,400 115,200
----------- -----------
13,900 869,423
----------- -----------
Photographic Equipment and Supplies - 0.37%
Eastman Kodak Company................................ 1,100 71,912
Polaroid Corporation................................. 200 10,562
----------- -----------
1,300 82,474
----------- -----------
Printing and Publishing - 0.31%
American Greetings Corporation, Class A.............. 200 6,950
Donnelly (RR) & Sons Company......................... 500 19,469
Dun & Bradstreet Corporation......................... 500 14,000
McGraw-Hill Inc...................................... 300 18,394
Westvaco Corporation................................. 300 10,163
----------- -----------
1,800 68,976
----------- -----------
Railroads - 0.17%
Norfolk Southern Corporation......................... 400 39,200
----------- -----------
Research and Development - 0.18%
Amgen Inc.*.......................................... 800 39,650
----------- -----------
Retail - Store - 3.52%
American Stores Company.............................. 800 18,950
Charming Shoppes Inc................................. 400 2,413
Circuit City Stores Inc. - Circuit City.............. 400 14,250
CVS Corporation...................................... 300 16,913
Dayton Hudson Corporation............................ 700 39,900
Dillard's Inc., Class A.............................. 400 16,000
Federated Department Store*.......................... 600 25,200
Gap Inc.............................................. 900 39,994
K Mart Corporation................................... 1,500 20,813
Limited Inc.......................................... 900 20,475
Longs Drug Stores Company............................ 100 2,531
May Department Stores Company........................ 800 43,050
Mercantile Stores Company............................ 200 12,488
Nordstrom, Inc....................................... 200 11,700
Penney (J.C.) Company Inc............................ 800 48,000
Rite Aid Corporation................................. 400 20,025
Russell Corporation.................................. 100 2,850
Sears, Roebuck & Company............................. 1,300 73,774
Stride Rite Corporation.............................. 200 2,375
TJX Companies, Inc................................... 400 11,000
Toys R Us Inc.*...................................... 1,000 34,562
Walgreen Company..................................... 1,600 43,100
Wal-Mart Stores, Inc................................. 7,400 262,700
Woolworth Corporation................................ 500 11,188
----------- -----------
21,900 794,251
----------- -----------
Savings and Loan Associations - 0.13%
Ahmanson (H.F.) Company.............................. 400 20,300
Golden West Financial Corporation.................... 100 8,231
----------- -----------
500 28,531
----------- -----------
</TABLE>
F-9
<PAGE>
SCHEDULE OF INVESTMENTS (Continued)
August 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
------ ---------
<S> <C> <C>
EQUITIES (Continued)
Soaps and Detergents - 0.12%
Clorox Company....................................... 200 $ 26,250
----------- -----------
Steel - 0.21%
Armco Inc.*.......................................... 400 2,375
Bethlehem Steel Corporation*......................... 400 4,800
Inland Steel Corporation*............................ 200 4,213
Nucor Corporation.................................... 300 17,006
Timken Company....................................... 200 7,488
USX-U.S. Steel Group Inc............................. 200 7,025
Worthington Industries, Inc.......................... 300 5,569
----------- -----------
2,000 48,476
----------- -----------
Technology - 0.63%
Ameritech Corporation................................ 1,800 112,837
ITT Industries*...................................... 400 12,600
Millipore Corporation................................ 200 9,900
Perkin-Elmer Corporation............................. 100 7,400
----------- -----------
2,500 142,737
----------- -----------
Telecommunications - 6.43%
AirTouch Communications, Inc.*....................... 1,600 54,100
ALLTEL Corporation................................... 600 18,975
Andrew Corporation*.................................. 300 7,463
AT&T Corporation..................................... 5,600 218,400
Bell Atlantic Corporation............................ 2,475 179,141
BellSouth Corporation................................ 3,200 140,800
Comcast Corporation, Special Class A
(non-voting)........................................ 1,000 23,438
DSC Communications Corporation*...................... 300 8,738
Frontier Corporation................................. 600 13,238
Lucent Technologies, Inc............................. 2,100 163,536
MCI Communications Corporation....................... 2,200 62,700
Northern Telecommunications Ltd...................... 800 79,300
SBC Communications................................... 3,000 163,124
Sprint Corporation................................... 1,400 65,800
Tele-Communications Inc., Class A*................... 2,100 36,750
US West, Inc......................................... 1,500 53,718
US West Media, Inc.*................................. 2,000 40,000
Viacom Inc., Class B* (non-voting)................... 1,200 35,550
WorldCom, Inc........................................ 2,800 83,825
----------- -----------
34,775 1,448,596
----------- -----------
Tire and Rubber - 0.21%
Cooper Tire & Rubber Company......................... 300 7,538
Goodrich (B.F.) Company.............................. 200 8,425
Goodyear Tire & Rubber Company....................... 500 30,813
----------- -----------
1,000 46,776
----------- -----------
Transportation - 0.25%
Burlington Northern Santa Fe......................... 500 45,844
Ryder System, Inc.................................... 300 10,706
----------- -----------
800 56,550
----------- -----------
Utilities - 2.32%
American Electric Power Company, Inc................. 600 26,213
Baltimore Gas & Electric Company..................... 400 10,800
Carolina Power & Light Company....................... 500 16,875
Central & Southwest Corporation...................... 600 12,413
Cinergy Corporation.................................. 500 16,531
Consolidated Edison Company.......................... 700 21,438
Dominion Resources, Inc.............................. 600 21,600
DTE Energy Company................................... 500 14,813
Duke Energy Company.................................. 1,122 54,346
Edison International................................. 1,400 33,774
Entergy Corporation.................................. 700 17,369
FPL Group, Inc....................................... 500 23,250
GPU, Inc............................................. 400 13,450
Houston Industries, Inc.............................. 1,499 30,355
National Service Industries, Inc..................... 100 4,425
Niagara Mohawk Power Corporation..................... 500 4,469
Northern States Power Company........................ 200 9,625
Ohio Edison Company.................................. 500 11,000
PacifiCorp........................................... 900 18,675
PECO Energy Company.................................. 700 16,669
Peoples Energy Corporation........................... 100 3,769
PG & E Corporation................................... 1,300 30,144
PP & L Resources Inc................................. 500 10,969
Southern Company..................................... 2,200 46,338
Texas Utilities Company.............................. 745 25,982
Unicom Corporation................................... 700 16,538
Union Electric Company............................... 300 11,156
----------- -----------
18,766 522,986
----------- -----------
Waste Management - 0.64%
Browning-Ferris Industries, Inc...................... 700 24,456
Laidlaw Inc., Class B (non-voting)................... 1,000 14,625
Waste Management, Inc................................ 3,300 105,600
----------- -----------
5,000 144,681
----------- -----------
Total Equities - 99.99%
(Cost $20,108,164)................................... 22,539,055
-----------
SHORT-TERM INVESTMENTS - 0.02%
(Cost $4,937)
Dreyfus Cash Management Fund, Class A................ 4,937 4,937
----------- -----------
Total Investments
(Cost $20,113,101) (a) 100.01% $ 22,543,992
======= ===========
(a) Federal Income Tax Information: At August 31, 1997
the net unrealized appreciation on investments
based on cost of $20,113,101 for federal
income tax purposes is as follows:
Aggregate gross unrealized appreciation for all
investments in which there is an excess of
market value over tax cost ..................................... $ 2,678,140
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax
cost over market value ......................................... (247,249)
-----------
Net unrealized appreciation .................................... $ 2,430,891
===========
</TABLE>
* Non-income producing security.
See Notes To Financial Statements.
F-10
<PAGE>
Notes To Financial Statements
(Unaudited)
1. HISTORY
MML Equity Index Fund ("the Fund") is a non-diversified series of MML Series
Investment Fund ("MML Trust"), a no load, open-end, management investment
company registered as such under the Investment Company Act of 1940. MML Trust,
which has five separate series of shares, was organized as a business trust
under the laws of the Commonwealth of Massachusetts pursuant to an Agreement and
Declaration of the Trust.
MML Trust was established by Massachusetts Mutual Life Insurance Company
("MassMutual") for the purposes of providing vehicles for the investment of
assets of various separate investment accounts established by MassMutual and by
the life insurance companies which are subsidiaries of MassMutual. Shares of MML
Trust are not offered to the general public.
Information presented in these financial statements pertains only to the Fund.
Information for the other series of MML Trust are presented under a separate
cover.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in preparation of its financial statements in conformity
with generally accepted accounting principles.
A. Investment Valuation
Generally, the Fund values its Portfolio's securities at market value or,
in the absence of market value with respect to any portfolio security, at
fair value as determined by, or under the direction of, the Board of
Trustees of MML Trust ("the Board"). Portfolio securities are valued on the
basis of valuations furnished by a pricing service, authorized by the
Board, which provides the last reported sale price for securities listed on
a national securities exchange, or on the NASDAQ national market system. If
securities are unlisted or there is no reported sales price, the bid price
of the prior trade date will be used. Short-term debt obligations with less
than one year, but more than sixty days to maturity from the date of
purchase are valued on the basis of their market value. Debt obligations
with sixty days or less to maturity from the date of purchase are generally
valued at amortized cost when the Board believes amortized cost
approximates market value. Futures contracts are valued based on market
prices unless such prices do not reflect fair value of the contract, in
which case they will be valued by or under the direction of the Board.
B. Accounting For Investments
Investment transactions are accounted for on trade date. Dividend income is
recorded on ex-dividend date. Interest income is recorded on the accrual
basis.
Realized gains and losses on investment transactions and unrealized
appreciation and depreciation of investments are reported for financial
statement and federal income tax purposes on the identified cost method.
C. Dividends and Distributions
Dividends of net investment income and distributions of capital gains are
declared and paid annually or as approved by the Board to avoid the
application of a 4% non-deductible excise tax on certain undistributed
amounts of ordinary income and capital gains. Income distributions and
capital gains distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income,
gains and losses and differing characterizations of distributions made by
the Fund. As a result, net investment income (loss) and net realized gain
(loss) on investment transactions for a reporting period may differ
significantly from distributions during such period. Accordingly, the Fund
may periodically make reclassifications among certain of their capital
accounts without impacting the net asset value of the Fund.
D. Federal Income Tax
The MML Trust has established a policy for the Fund to comply with the
provisions of the Internal Revenue Code of 1986, as amended, applicable to
regulated investment companies. As a result, the Fund will not be subject
to federal income tax on any net investment income and any capital gains to
the extent they are distributed or are deemed to have been distributed to
shareholders.
F-11
<PAGE>
Notes To Financial Statements (Continued)
E. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. INVESTMENT MANAGEMENT FEE
MassMutual serves as investment adviser to the Fund pursuant to an investment
management agreement (the "Investment Management Agreement"). For acting as
such, MassMutual receives a quarterly fee at the annual rate of .40% of the
first $100,000,000 of the average daily net asset value of the Fund, .38% of the
next $150,000,000 and .36% of any excess over $250,000,000. MassMutual has
agreed to bear expenses of the Fund (other than the management fee, interest,
taxes any required trademark licensing fees, custodial fees, brokerage
commissions and extraordinary expenses) in excess of .11% of average daily net
asset value of the Fund through April 30, 1998. MassMutual also acts as transfer
agent and dividend paying agent.
4. PURCHASE AND SALES OF INVESTMENTS
<TABLE>
<CAPTION>
Proceeds
For the Period Ended Acquisition from Sales
August 31, 1997* Cost and Maturities
---------------- ----------- --------------
<S> <C> <C>
Equities.................................................. $20,180,503 $ 73,098
Short-term Investments.................................... 20,419,567 20,423,466
</TABLE>
* The Fund commenced operations on May 1, 1997.
5. NET INCREASE FROM CAPITAL SHARE TRANSACTIONS
The Trust is authorized to issue an unlimited number of shares of beneficial
interest to the Fund at $0.01 par value. Changes in shares of beneficial
interest are as follows:
<TABLE>
<CAPTION>
For the Period Ended
August 31, 1997*
----------------
<S> <C>
Shares
Sales of shares.......................................... 2,001,143
-----------
Net Increase............................................. 2,001,143
===========
Amount
Sales of shares.......................................... $20,011,406
-----------
Net Increase............................................. $20,011,406
===========
</TABLE>
* The Fund commenced operations on May 1, 1997.
6. INVESTMENT RISK AND CONSIDERATION
Since the fund is non-diversified and a relatively high percentage of the Fund's
assets may be invested in the securities of a limited number of issuers, some of
which may be in the same economic sector, the Fund's portfolio may be more
sensitive to changes in market value of a single issuer or industry.
F-12
<PAGE>
APPENDIX
SECURITIES RATINGS
This is a description of Standard & Poor's Ratings Group ("S&P") and Moody's
Investors Service, Inc. ("Moody's") commercial paper and bond ratings:
I. Commercial Paper Ratings:
S&P Commercial Paper Ratings--are graded into four categories, ranging from 'A'
for the highest quality obligations to 'D' for the lowest. 'A' Issues assigned
the highest rating are regarded as having the greatest capacity for timely
payment. Issues in this category are delineated with the numbers 1, 2, and 3 to
indicate the relative degree of safety. The A-1 category is described as
follows:
"A-1": This designation indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus (+)
sign designation.
Moody's Commercial Paper Ratings--employs three designations, all judged to be
investment grade, to indicate the relative repayment ability of rated issuers.
The highest designation is as follows:
Prime-1: Issuers rated Prime-1 (or related supporting institutions)
have a superior ability for repayment of senior short-term debt
obligations. Prime-1 repayment ability will often be evidenced by
many of the following characteristics:
. Leading market positions in well-established industries.
. High rates of return on funds employed.
. Conservative capitalization structure with moderate reliance
on debt and ample asset protection.
. Broad margins in earnings coverage of fixed financial charges
and high internal cash generation.
. Well established access to a range of financial markets and
assured sources of alternate liquidity.
II. Bond Ratings
S&P describes its two highest ratings for corporate debt as follows:
A: AAA--Debt rated AAA has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely
strong.
A-1
<PAGE>
AA--Debt rated AA has a very strong capacity to pay interest
and repay principal and differs from the higher rated issues
only in small degree.
The ratings from AA to CCC may be modified by the addition of a plus or minus
sign to show relative standing within the major rating categories.
Moody's describes its two highest corporate bond ratings as follows:
Aaa--Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can
be visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities
or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long term risks
appear somewhat larger than the Aaa securities.
Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
A-2
<PAGE>
PART C: OTHER INFORMATION
ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS:
(1) Financial Statements included in the Prospectus constituting Part A of
this Registration Statement
Financial Highlights for the four-month period ended August 31, 1997
(unaudited)
(2) Financial Statements included in the Statement of Additional
Information constituting Part B of this Registration Statement
Statements of Assets and liabilities at August 31, 1997 (unaudited)
Statement of Operations for the period ended August 31, 1997
(unaudited)
Statement of Changes in Net Assets for the period ended August 31, 1997
(unaudited)
Financial Highlights for the four-month period ended August 31, 1997
(unaudited)
Portfolio of Investments at August 31, 1997 (unaudited)
Notes to Financial Statements
(B) EXHIBITS:
Exhibit 1: Registrant's Agreement and Declaration of Trust, as restated May
14, 1993, incorporated by reference to Exhibit 1 of Post-Effective
Amendment No. 32 to Registrant's Registration Statement on Form N-
1A.
Exhibit 2: Registrant's By-Laws, as amended and restated August 6, 1993,
incorporated by reference to Exhibit 2 of Post-Effective Amendment
No. 32 to Registrant's Registration Statement on Form N-1A.
Exhibit 3: Not Applicable.
Exhibit 4: Not Applicable.
Exhibit5(a) Investment Management Agreement between MML Series Investment Fund
(the "Trust"), on behalf of the MML Equity Index Fund (the "Fund"),
and Massachusetts Mutual Life Insurance Company ("MassMutual").
Exhibit 5(b) Investment Sub-Advisory Agreement between MassMutual and Mellon
Equity Associates.
Exhibit 6: Not Applicable.
Exhibit 7: Not Applicable.
Exhibit 8: Form of Custodian Agreement between the Trust, on behalf of the
Fund and Boston Safe Deposit and Trust Company, incorporated by
reference to Exhibit 8 of Post-Effective Amendment No. 35 to
Registrant's Registration Statement or Form N-1A
Exhibit 9: Accounting Services Agreement dated as of April 28, 1997 between
the Trust, on behalf of the Fund, and First Data Investor Services
Group, Inc.
Exhibit 10: Opinion of counsel as to the legality of shares being registered,
incorporated by reference to Exhibit 10 to Post-Effective Amendment
No. 35 to the Registrant's Registration STatement on Form N-1A
Exhibit 11: Not Applicable
Exhibit 12: Not Applicable.
Exhibit 13: Not Applicable.
Exhibit 14: Not Applicable.
C-1
<PAGE>
Exhibit 15: Not Applicable.
Exhibit 16: Not Applicable.
Exhibit 17: Not Applicable.
Exhibit 18: Not Applicable.
Exhibit 27: Financial Data Schedule
ITEM 25: PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
------------------------------------------------------------
At the date of this Post-Effective Amendment, Registrant did not, directly
or indirectly, control any person. Registrant was organized by MassMutual
primarily for the purpose of providing a vehicle for the investment of assets of
various separate investment accounts established by MassMutual and life
insurance company subsidiaries of MassMutual. The assets in such separate
accounts are, under state law, assets of the life insurance companies which have
established such accounts. Thus, at any time MassMutual and its life insurance
company subsidiaries will own such outstanding shares of Registrant's series as
are purchased with separate account assets; however, where required to do so,
MassMutual and its subsidiaries will vote such shares only in accordance with
instructions received from owners of the contracts pursuant to which sums are
placed in such separate accounts.
The following entities are, or may be deemed to be, controlled by MassMutual
through the direct or indirect ownership of such entities' stock.
1. CM Assurance Company, a Connecticut life, accident, disability and health
insurer, all the stock of which is owned by MassMutual.
2. CM Benefit Insurance Company, a Connecticut life, accident, disability and
health insurer, all the stock of which is owned by MassMutual.
3. C.M. Life Insurance Company, a Connecticut life, accident, disability and
health insurer, all the stock of which is owned by MassMutual.
4. MML Bay State Life Insurance Company, a Connecticut life and health
insurer, all the stock of which is owned by MassMutual.
5. MML Distributors, LLC, formerly known as Connecticut Mutual Financial
Services, LLC, a registered broker-dealer incorporated as a limited
liability company in Connecticut. MassMutual has a 99% ownership interest
and G.R. Phelps & Co. has a 1% ownership interest.
6. MassMutual Holding Company, a Delaware holding company, all the stock of
which is owned by MassMutual.
7. MassMutual of Ireland, Limited, incorporated in the Republic of Ireland, to
operate a group life and health claim office for MassMutual, all of the
stock of which is owned by MassMutual.
8. MML Series Investment Fund, a registered open-end investment company
organized as a Massachusetts business trust, all of the shares of which are
owned by separate accounts of MassMutual and companies controlled by
MassMutual.
9. MassMutual Institutional Funds, a registered open-end investment company
organized as a Massachusetts business trust, all of the shares of which are
owned by MassMutual.
10. G.R. Phelps & Co., Inc., a Connecticut corporation which formerly operated
as a securities broker-dealer, all the stock of which is owned by
MassMutual Holding Company.
11. MML Investors Services, Inc., registered broker-dealer incorporated in
Massachusetts, all the stock of which is owned by MassMutual Holding
Company.
C-2
<PAGE>
12. MassMutual Holding MSC, Inc., a Massachusetts corporation, which acts as a
holding company for MassMutual positions in investment entities organized
outside the United States. MassMutual Holding Company owns all the
outstanding shares of MassMutual Holding MSC, Inc.
13. MassMutual Holding Trust I, a Massachusetts business trust, which acts as a
holding company for certain MassMutual investment subsidiaries. MassMutual
Holding Company owns all the outstanding shares of MassMutual Holding
Trust I.
14. MassMutual Holding Trust II, a Massachusetts business trust, which acts as
a holding company for certain MassMutual investment subsidiaries.
MassMutual Holding Company owns all the outstanding shares of MassMutual
Holding Trust II.
15. MassMutual International, Inc., a Delaware corporation that acts as a
holding company of and provides services to international insurance
companies, all of the stock of which is owned by MassMutual Holding
Company.
16. MML Insurance Agency, Inc., a licensed insurance broker incorporated in
Massachusetts, all of the stock of which is owned by MML Investors
Services, Inc.
17. MML Securities Corporation, a "Massachusetts Securities Corporation", all
of the stock of which is owned by MML Investors Services, Inc.
18. Diversified Insurance Services Agency of America, Inc., a licensed
insurance broker incorporated in Alabama. MML Insurance Agency, Inc. owns
all the shares of outstanding stock.
19. Diversified Insurance Services Agency of America, Inc., a licensed
insurance broker incorporated in Hawaii. MML Insurance Agency, Inc. owns
all the shares of outstanding stock.
20. MML Insurance Agency of Mississippi, P.C., a Mississippi professional
corporation that operates as an insurance broker, all of the stock of which
is owned by MML Insurance Agency, Inc.
21. MML Insurance Agency of Nevada, Inc., a Nevada corporation that operates as
an insurance broker, all of the stock of which is owned by MML Insurance
Agency, Inc.
22. MML Insurance Agency of Ohio, Inc., a subsidiary of MML Insurance Agency,
Inc., is incorporated in the state of Ohio that operates as an insurance
broker. The outstanding capital stock is controlled by MML Insurance
Agency, Inc. through a voting trust agreement.
23. MML Insurance Agency of Texas, Inc., a subsidiary of MML Insurance Agency,
Inc., is incorporated in the state of Texas that operates as an insurance
broker. The
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outstanding capital stock is controlled by MML Insurance Agency, Inc.
through an irrevocable proxy arrangement.
24. MassMutual/Carlson CBO N.V., a Netherlands Antilles corporation which
operates a collateralized bond obligation fund. MassMutual Holding MSC,
Inc. and Carlson Investment Management Co. each own 50% of the outstanding
shares.
25. MassMutual Corporate Value Limited, a Cayman Islands corporation that owns
approximately 93% of MassMutual Corporate Value Partners Limited.
MassMutual Holding MSC, Inc. owns 46.19% of the outstanding capital stock
of MassMutual Corporate Value Limited.
26 MassMutual Corporate Value Partners Limited, a Cayman Islands corporation
that operates as a high yield bond fund. MassMutual Corporate Value Limited
holds an approximately 93% ownership interest in this company.
27. 9048-5434 Quebec, Inc., a Quebec corporation, which operates as the owner
of hotel property in Montreal, Quebec, Canada. MassMutual Holding MSC, Inc.
owns all the shares of 9048-5434 Quebec, Inc.
28. Antares Leveraged Capital Corp., a Delaware corporation that operates as a
finance company. MassMutual Holding Trust I owns approximately 98.7% of the
capital stock of Antares.
29. Charter Oak Capital Management, Inc., a Delaware corporation that operates
as an investment manager. MassMutual Holding Trust I owns 80% of the
capital stock of Charter Oak.
30. Cornerstone Real Estate Advisers, Inc., a Massachusetts equity real estate
advisory corporation, all the stock of which is owned by MassMutual Holding
Trust I.
31. DLB Acquisition Corporation ("DLB") is a Delaware corporation, which serves
as a holding company for David L. Babson and Company, Incorporated.
MassMutual Holding Trust I owns 83.7% of the outstanding capital stock of
DLB.
32. Oppenheimer Acquisition Corporation ("OAC") is a Delaware corporation,
which serves as a holding company for OppenheimerFunds, Inc. MassMutual
Holding Trust I owns 86% of the capital stock of OAC
33. David L. Babson and Company, Incorporated, a registered investment adviser
incorporated in Massachusetts, all of the stock of which is owned by DLB.
34. Babson Securities Corporation, a registered broker-dealer incorporated in
Massachusetts, all of the stock of which is owned by David L. Babson and
Company, Incorporated.
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35. Babson-Stewart-Ivory International, a Massachusetts general partnership,
which operates as a registered investment adviser. David L. Babson and
Company Incorporated holds a 50% ownership interest in the partnership.
36. Potomac Babson Incorporated, a Massachusetts corporation, is a registered
investment adviser. David L. Babson and Company Incorporated owns 60% of
the outstanding shares of Potomac Babson Incorporated.
37. OppenheimerFunds, Inc., a registered investment adviser incorporated in
Colorado, all of the stock of which is owned by Oppenheimer Acquisition
Corporation.
38. Centennial Asset Management Corporation, a Delaware corporation that serves
as the investment adviser and general distributor of the Centennial Funds.
OppenheimerFunds, Inc. owns all the stock of Centennial Asset Management
Corporation.
39. HarbourView Asset Management Corporation, a registered investment adviser
incorporated in New York, all the stock of which is owned by
OppenheimerFunds, Inc.
40. MultiSource Service, Inc., a Colorado corporation that operates as a
clearing broker, all of the stock of which is owned by OppenheimerFunds,
Inc.
41. OppenheimerFunds Distributor, Inc., a registered broker-dealer incorporated
in New York, all the stock of which is owned by OppenheimerFunds, Inc.
42. Oppenheimer Partnership Holdings, Inc., a Delaware holding company, all the
stock of which is owned by OppenheimerFunds, Inc.
43. Oppenheimer Real Asset Management, Inc., a commodity pool operator
incorporated in Delaware, all the stock of which is owned by
OppenheimerFunds, Inc.
44. Shareholder Financial Services, Inc., a transfer agent incorporated in
Colorado, all the stock of which is owned by OppenheimerFunds, Inc.
45. Shareholder Services, Inc., a transfer agent incorporated in Colorado, all
the stock of which is owned by OppenheimerFunds, Inc.
46. Centennial Capital Corporation, a Delaware corporation that formerly
sponsored a unit investment trust. Centennial Asset Management Corporation
owns all the outstanding shares of Centennial Capital Corporation.
47 Cornerstone Office Management, LLC, a Delaware limited liability company
that is 50% owned by Cornerstone Real Estate Advisers, Inc. and 50% owned
by MML Realty Management Corporation.
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48. Cornerstone Suburban Office Investors, LP, a Delaware limited partnership,
which operates as a real estate operating company. Cornerstone Office
Management, LLC holds a 1% general partnership interest in this fund and
MassMutual holds a 99% limited partnership interest.
49. CM Advantage, Inc., a Connecticut corporation that acts as a general
partner in real estate limited partnerships. MassMutual Holding Trust II
owns all of the outstanding stock.
50. CM International, Inc., a Delaware corporation that holds a mortgage pool
and issues collateralized mortgage obligations. MassMutual Holding Trust II
owns all the outstanding stock of CM International, Inc.
51. CM Property Management, Inc., a Connecticut real estate holding company,
all the stock of which is owned by MassMutual Holding Trust II.
52. HYP Management, Inc., a Delaware corporation which is the LLC Manager for
MassMutual High Yield Partners LLC and owns 1.28% of the LLC units of such
entity. MassMutual Holding Trust II owns all the outstanding stock of HYP
Management, Inc.
53. MMHC Investment, Inc., a Delaware corporation which is a passive investor
in MassMutual High Yield Partners LLC. MassMutual Holding Trust II owns all
the outstanding stock of MMHC Investment, Inc.
54. MassMutual High Yield Partners LLC, a Delaware limited liability company,
that operates as a high yield bond fund. MassMutual holds 5.28%, MMHC
Investment Inc. holds 35.99%, and HYP Management, Inc. hold 1.28% for a
total of 42.55% of the ownership interest in this company.
55. MML Realty Management Corporation, a former property manager incorporated
in Massachusetts, all the stock of which is owned by MassMutual Holding
Trust II.
56. 505 Waterford Park Limited Partnership, a Delaware limited partnership,
which holds title to an office building in Minneapolis, Minnesota. MML
Realty Management Corporation holds a 1% general partnership interest in
this partnership and MassMutual holds a 99% limited partnership interest.
57. Urban Properties, Inc., a Delaware real estate holding and development
company, all the stock of which is owned by MassMutual Holding Trust II.
58. Westheimer 335 Suites, Inc., was incorporated in Delaware to serve as a
general partner of the Westheimer 335 Suites Limited Partnership.
MassMutual Holding Trust II owns all the stock of Westheimer 335 Suites,
Inc.
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59. Westheimer 335 Suites Limited Partnership, a Texas limited partnership of
which Westheimer 335 Suites, Inc. is the general partner.
60. MassMutual Internacional (Argentina) S.A., an Argentine corporation, which
operates as a holding company. MassMutual International Inc. owns 99.9% of
the outstanding shares and MassMutual Holding Company owns the remaining
0.1% of the shares.
61. MassMutual Internacional (Chile) S.A., a Chilean corporation, which
operates as a holding company. MassMutual International Inc. owns 99.9% of
the outstanding shares and MassMutual Holding Company owns the remaining
0.1% of the shares.
62. MassMutual International (Bermuda) Ltd., a Bermuda life insurance company,
all of the stock of which is owned by MassMutual International Inc.
63. MassMutual International (Luxembourg) S.A., a Luxembourg corporation, which
operates as an insurance company. MassMutual International Inc. owns 99% of
the outstanding shares and MassMutual Holding Company owns the remaining 1%
of the shares.
64. Mass Seguros de Vida S.A., a life insurance company incorporated in Chile.
MassMutual Holding Company owns 33.5% of the outstanding capital stock of
Mass Seguros de Vida S.A.
65. MassLife Seguros de Vida S.A., a life insurance company incorporated in
Argentina. MassMutual International Inc. owns 45% of the outstanding
capital stock of MassLife Seguros de Vida S.A.
66 MassMutual Services, S.A., an Argentine corporation, which operates as a
service company. MassMutual Internacional (Argentina) S.A. owns 99% of the
outstanding shares and MassMutual International, Inc. owns 1% of the
shares.
67. Origen Inversiones S.A., a Chilean corporation which operates as a holding
company. MassMutual Internacional (Chile) S.A. holds a 33.5% ownership
interest in this corporation.
68. Compensa Compania Seguros De Vida, a Chilean insurance company. Origen
Inversiones S.A. owns 99% of the outstanding shares of this company.
69. Oppenheimer Series Fund Inc., a Maryland corporation and a registered
open-end investment company of which MassMutual and its affiliates own a
majority of the outstanding shares issued by the fund.
70. Oppenheimer Value Stock Fund ("OVSF) is a series of Oppenheimer Integrity
Funds, a Massachusetts business trust. OVSF is a registered open-end
investment company of
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which MassMutual owns approximately 29% of the outstanding shares of
beneficial interest.
71. Panorama Series Fund, Inc., a registered open-end investment company
organized as a Maryland corporation. Shares of the fund are sold only to
MassMutual and its affiliates.
72. The DLB Fund Group, an open-end management investment company advised by
David L. Babson and Company Incorporated. MassMutual owns at least 25% of
each series.
MassMutual acts as the investment adviser of the following investment companies,
and as such may be deemed to control them.
1. MML Series Investment Fund, a registered open-end Massachusetts business
trust, all of the shares are owned by separate accounts of MassMutual and
companies controlled by MassMutual.
2. MassMutual Corporate Investors, a registered closed-end Massachusetts
business trust.
3. MassMutual Corporate Value Partners Limited, a Cayman Islands corporation
that operates as a high-yield bond fund. MassMutual Corporate Value Limited
holds an approximately 93% ownership interest in this company.
4. MassMutual High Yield Partners LLC, a Delaware limited liability company,
that operates as a high yield bond fund. MassMutual holds 5.28%, MMHC
Investment Inc. holds 35.99%, and HYP Management, Inc. hold 1.28% for a
total of 42.55% of the ownership interest in this company.
5. MassMutual Institutional Funds, a registered open-end Massachusetts
business trust, all of the shares of which are owned by MassMutual.
6. MassMutual Participation Investors, a registered closed-end Massachusetts
business trust.
7. MassMutual/Carlson CBO N.V., a Netherlands Antilles corporation which
operates a collateralized bond obligation fund. MassMutual Holding MSC,
Inc. and Carlson Investment Management Co. each own 50% of the outstanding
shares.
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ITEM 26: NUMBER OF HOLDERS OF SECURITIES
- -------- -------------------------------
As of September 30, 1997, the number of holders of record of each class of
securities of the Fund was as follows:
Title of Class Number of Record Holders
-------------- ------------------------
Shares of
Beneficial 1
Interest
ITEM 27: INDEMNIFICATION
- -------- ---------------
Article VIII of Registrant's Agreement and Declaration of Trust provides for the
indemnification of Registrant's Trustees and officers. Registrant undertakes to
apply the indemnification provisions of its Agreement and Declaration of Trust
in a manner consistent with Securities and Exchange Commission Release No. IC-
11330 so long as the interpretation of Section 17(h) and 17(i) of the Investment
Company Act of 1940 set forth in such Release shall remain in effect and be
consistently applied.
Trustees and officers of Registrant are also indemnified by MassMutual pursuant
to its by-laws which apply to subsidiaries, including Registrant. No
indemnification is provided with respect to any liability to any entity which is
registered as an investment company under the Investment Company Act of 1940 or
to the security holders thereof, where the basis for such liability is willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of office.
MassMutual's directors' and officers' liability insurance program, which covers
Registrant's Trustees and officers, consists of two distinct coverages. The
first coverage reimburses MassMutual, subject to specified limitations, for
amounts which MassMutual is legally obligated to pay out under its
indemnification by-law, discussed above. The second coverage directly protects a
Trustee or officer of Registrant against liability shareholder derivative and
similar lawsuits which are indemnifiable under the law. There are, however,
specific acts giving rise to liability which are excluded from this coverage.
For example, no Trustee or officer is insured against personal liability for
libel or slander, acts of deliberate dishonesty, fines or penalties, illegal
personal profit or advantage at the expense of Registrant or its shareholders,
violation of employee benefit plans, regulatory statutes, and similar acts which
would traditionally run contrary to public policy and hence reimbursement by
insurance.
MassMutual's present insurance coverage has an overall limit of $60 million
annually ($15 million of which is underwritten by National Union Fire Insurance
Company, $15 million of which is underwritten by
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Executive Risk Indemnity, Inc., $10 million of which is underwritten by
Continental Casualty Co., $5 million of which is underwritten by Federal
Insurance Co. and $15 million of which is underwritten by Sargasso Mutual
Insurance Company). There is a deductible of $200,000 per claim under the
corporate coverage. There is no deductible for individual trustees or officers.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a trustee, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person in connection with the
securities being registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
Item 28: Business and Other Connections of the Investment Adviser
- -----------------------------------------------------------------
a. The Investment Adviser
MassMutual is the investment adviser for the Registrant. MassMutual is a mutual
life insurance company organized as a Massachusetts corporation which was
originally chartered in 1851. As a mutual life insurance company, MassMutual has
no shareholders. MassMutual's primary business is ordinary life insurance. It
also provides, directly or through its subsidiaries, a wide range of annuity and
disability products, and pension and pension-related products and services, as
well as investment services to individuals, and corporations and other
institutions, in all 50 states of the United States and the District of
Columbia. MassMutual is also licensed to transact business in Puerto Rico, and
six provinces of Canada, but has no export sales. Effective February 29, 1996,
Connecticut Mutual Life Insurance Company merged into MassMutual.
MassMutual's principal lines of business are (i) the Individual Line, which
provides life insurance including variable and universal life insurance,
annuities and disability income insurance to individuals and small businesses;
(ii) Pension Management, which provides group pension investment products and
administrative services, primarily to sponsors of tax qualified retirement
plans; (iii) Life and Health Benefits Management, which previously provided
group life and health insurance products and related services to corporations
and other institutions; this line was transferred to a subsidiary in December
1994, and the subsidiary was subsequently sold in March of 1996; and (iv)
MassMutual Investment Management Group, which provides advisory services for
MassMutual's general investment account and separate investment
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accounts, as well as for various closed-end and open-end investment companies
and external institutional clients, through its own staff and those of
Oppenheimer Funds Inc. and David L. Babson and Company, Inc., in which
MassMutual indirectly owns a controlling interest.
The directors and executive vice presidents of MassMutual, their positions and
their other business affiliations and business experience for the past two years
are listed below.
Directors
ROGER G. ACKERMAN, Director and Member, Auditing and Human Resources Committees
Chairman and Chief Executive Officer (since 1996), President and Chief
Operating Officer (1990-1996), Corning Incorporated (manufacturer of
specialty materials, communication equipment and consumer products), One
Riverfront Plaza, Corning, New York; Director (since 1993), Dow Corning
Corporation (producer of silicone products), 2200 West Salzburg Road,
Midland, Michigan; Director, The Pittson Company (mining and marketing of
coal for electric utility and steel industries), One Pickwick Plaza,
Greenwich, Connecticut.
JAMES R. BIRLE, Director, Chairman, Dividend Policy Committee and Member,
Investment Committee
Chairman (since 1997), President (1994-1997) and Founder (since 1994),
Resolute Partners, LLC (private merchant bank), 2 Greenwich Plaza, Suite
100, Greenwich, Connecticut; Director (since 1996), IKON Office Solutions
(diversified office products and technology solutions), 825 Duportail Road,
Valley Forge, Pennsylvania; Director: Drexel Industries, Inc., Connecticut
Health and Education Facilities Authority, and Transparency International;
Trustee, Villanova University and The Sea Research Foundation; Director
(1991-1996), Connecticut Mutual Life Insurance Company, 140 Garden Street,
Hartford, Connecticut.
FRANK C. CARLUCCI, III, Director and Member, Board Affairs and Dividend Policy
Committees
Chairman (since 1993), Vice Chairman (1989-1993), The Carlyle Group
(merchant banking corporation), 1001 Pennsylvania Avenue, N.W., Washington,
D.C.; Director: Ashland Oil Inc. (producer of petroleum products), 1000
Ashland Drive, Russell, Kentucky; BDM International, Inc. (professional and
technical services to public and private sector), 7915 Jones Branch Drive,
McLean, Virginia; General Dynamics Corporation (manufacturer of military
equipment), 3190 Fairview Park Drive, Falls Church, Virginia; Kaman
Corporation (diversified manufacturer), 1332 Blue Hills Avenue, Bloomfield,
Connecticut; Northern Telecom Ltd. (digital telecommunications systems),
2920 Matheson Boulevard East, Mississauga, Ontario, Canada; The Quaker Oats
Company (manufacturer of food products), 321 North Clark Street, Chicago,
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Illinois; Sun Resorts Ltd., N.V.; Westinghouse Electric Corporation
(electronic systems, electric power generating equipment and broadcasting),
11 Stanwix Street, Pittsburgh, Pennsylvania; Chairman, Neurogen Corporation
and Texas Biotechnology Corporation; Trustee, The Rand Corporation;
Director (until 1997), CB Commercial Real Estate Group, Inc. (real estate
broker subsidiary of Carlyle Holding Corporation), 533 Fremont Avenue, Los
Angeles, California; Bell Atlantic Corporation (telecommunications), 1717
Arch Street, Philadelphia, Pennsylvania; Chairman; Director (1989-1996),
Connecticut Mutual Life Insurance Company, 140 Garden Street, Hartford,
Connecticut.
GENE CHAO, Director and Member, Auditing and Dividend Policy Committees
Chairman, President and Chief Executive Officer, Computer Projections, Inc.
(computer graphics), 733 S.W. Vista Avenue, Portland, Oregon; Director
(1990-1996), Connecticut Mutual Life Insurance Company, 140 Garden Street,
Hartford, Connecticut.
PATRICIA DIAZ DENNIS, Director and Member, Auditing and Human Resources
Committees
Senior Vice President and Assistant General Counsel (since 1995), SBC
Communications Inc. (telecommunications), 175 East Houston, San Antonio,
Texas; Special Counsel-Communication Law Matters (1993-1995), Sullivan &
Cromwell (law firm), 1701 Pennsylvania Avenue, N.W., Washington, D.C.;
Trustee (since 1995), Federal Communications Bar Association Foundation;
Trustee, Tomas Rivera Policy Institute, and Radio and Television News
Directors Foundation; Director: National Public Radio, Reading Is
Fundamental, and Foundation for Women's Resources; Director (1995-1996),
Connecticut Mutual Life Insurance Company, 140 Garden Street, Hartford,
Connecticut.
ANTHONY DOWNS, Director and Member, Auditing and Investment Committees
Senior Fellow, The Brookings Institution (non-profit policy research
center), 1775 Massachusetts Avenue, N.W., Washington, D.C.; Director: The
Pittway Corporation (publications and security equipment), 200 South Wacker
Drive, Suite 700, Chicago, Illinois; National Housing Partnerships
Foundation (non-profit organization to own and manage rental housing), 1225
Eye Street, N.W., Washington, D.C.; Bedford Property Investors, Inc. (real
estate investment trust), 3658 Mt. Diablo Boulevard, Lafayette, California;
General Growth Properties, Inc. (real estate investment trust), 215 Keo
Way, Des Moines, Iowa; NAACP Legal and Educational Defense Fund, Inc.
(civil rights organization), 99 Hudson Street, New York, New York; Trustee:
Urban Institute (public policy research organization), 2100 M Street, N.W.,
Washington, D.C. and Urban Land Institute (educational and research
organization), 625 Indiana Avenue, N.W., Washington, D.C.
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JAMES L. DUNLAP, Director and Member, Human Resources and Board Affairs
Committees
President and Chief Operating Officer (since 1996), United Meridian
Corporation (oil exploration), 1201 Louisiana, Houston, Texas; Senior Vice
President (1987-1996), Texaco, Inc. (producer of petroleum products), 2000
Westchester Avenue, White Plains, New York.
WILLIAM B. ELLIS, Director and Member, Auditing and Investment Committees
Senior Fellow (since 1995), Yale University School of Forestry and
Environmental Studies, New Haven, Connecticut; Chairman (1983-1995) and
Chief Executive Officer (1983-1993), Northeast Utilities (electric
utility), 107 Selden Street, Berlin, Connecticut; Director, The Hartford
Steam Boiler Inspection and Insurance Company (property and casualty
insurer), One State Street, Hartford, Connecticut; Director (since 1996),
Advest Group, Inc. (financial services holding company), 280 Trumbull
Street, Hartford, Connecticut; Director (since 1995), Catalytica Combustion
Systems, Inc.; Director, The National Museum of National History of the
Smithsonian Institution, Washington, D.C.; Director (1985-1996),
Connecticut Mutual Life Insurance Company, 140 Garden Street, Hartford,
Connecticut.
ROBERT M. FUREK, Director and Member, Dividend Policy and Investment Committees
President (1994-1996), International Distillers and Vintners, Inc.;
President and Chief Executive Officer (1987-1996), Heublein, Inc. (beverage
distributor), 450 Columbus Boulevard, Hartford, Connecticut; Director, The
Dexter Corporation (producer of specialty chemicals and papers), One Elm
Street, Windsor Locks, Connecticut; Corporator, The Bushnel Memorial,
Hartford, Connecticut; Trustee, Colby College, Mayflower Hill Drive,
Waterville, Maine; Director (1990-1996), Connecticut Mutual Life Insurance
Company, 140 Garden Street, Hartford, Connecticut.
CHARLES K. GIFFORD, Director and Member, Investment and Auditing Committees
Chairman and Chief Executive Officer (since 1995), and President
(1989-1996), The First National Bank of Boston, and Chief Executive Officer
(since 1995), President (1989-1996) and Chairman (1995-1996) of Bank of
Boston Corporation (bank holding company), 100 Federal Street, Boston,
Massachusetts; Director, Member of Audit and Compensation Committees,
Boston Edison Co. (public utility electric company), 800 Boylston Street,
Boston, Massachusetts.
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WILLIAM N. GRIGGS, Director, Chairman, Auditing Committee and Member, Investment
Committee
Managing Director, Griggs & Santow Inc. (financial consultants), 75 Wall
Street, New York, New York; Director, T/SF Communications, Inc.
(diversified publishing and communications company), Tulsa, Oklahoma.
GEORGE B. HARVEY, Director, Chairman, Human Resources Committee and Member,
Board Affairs Committee
Retired; Chairman, President and Chief Executive Officer (1983-1996),
Pitney Bowes, Inc. (office machines manufacturer), One Elmcroft Road,
Stamford, Connecticut; Director: Merrill Lynch & Co., Inc. (financial
services holding company), 250 Vesey Street, World Financial Center, North
Tower, New York, New York; The McGraw-Hill Companies, Inc. (multimedia
publishing and information services), 1221 Avenue of the Americas, New
York, New York; Stamford Hospital, Stamford, Connecticut; Pfizer, Inc.
(pharmaceutical and health-care products), 235 East 42nd Street, New York,
New York; The Catalyst (until 1997); Member, Board of Overseers, Wharton
School of Finance, University of Pennsylvania; Director (1989-1996),
Connecticut Mutual Life Insurance Company, 140 Garden Street, Hartford,
Connecticut.
BARBARA B. HAUPTFUHRER, Director and Member, Board Affairs and Investment
Committees
Director and Member, Compensation, Nominating and Audit Committees, The
Vanguard Group of Investment Companies including among others the following
funds: Vanguard/Windsor Fund, Vanguard/Wellington Fund, Vanguard/Morgan
Growth Fund, Vanguard/Wellesley Income Fund, Vanguard/Gemini Fund,
Vanguard/Explorer Fund, Vanguard Municipal Bond Fund, Vanguard Fixed Income
Securities Fund, Vanguard Index Trust, Vanguard World Fund, Vanguard/Star
Fund, Vanguard Ginnie Mae Fund, Vanguard/Primecap Fund, Vanguard
Convertible Securities Fund, Vanguard Quantitative Fund, Vanguard/Trustees
Commingled Equity Fund, Vanguard/Trustees Commingled Fund-International,
Vanguard Money Market Trust, Vanguard/Windsor II, Vanguard Asset Allocation
Fund and Vanguard Equity Income Fund (principal offices, Drummers Lane,
Valley Forge, Pennsylvania); Director, Chairman of Retirement Benefits
Committee and Pension Fund Investment Review - USA and Canada and Member,
Audit, Finance and Executive Committees, The Great Atlantic & Pacific Tea
Company, Inc. (operator of retail food stores), 2 Paragon Drive, Montvale,
New Jersey; Director, Chairman of Nominating Committee and Member,
Compensation Committee, Knight-Ridder, Inc. (publisher of daily newspapers
and operator of cable television and business information systems), One
Herald Plaza, Miami, Florida; Director and Member, Compensation Committee,
Raytheon Company (electronics manufacturer), 141 Spring Street, Lexington,
Massachusetts; Director and Member, Executive Committee and Chairman, Human
Resources and Independent Directors Committees, IKON Office
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Solutions (diversified office products and technology solutions), 825
Duportail Road, Valley Forge, Pennsylvania.
SHELDON B. LUBAR, Director, Chairman, Board Affairs Committee and Member,
Investment Committee
Chairman, Lubar & Co. Incorporated (investment management and advisory
company), 777 East Wisconsin Avenue, Milwaukee, Wisconsin; Chairman and
Director, The Christiana Companies, Inc. (real estate development);
Director: Firstar Bank, Firstar Corporation (bank holding company), SLX
Energy, Inc. (oil and gas exploration); Member, Advisory Committee, Venture
Capital Fund, L.P. (principal offices, 777 East Wisconsin Avenue,
Milwaukee, Wisconsin); Director: Grey Wolf Drilling Co. (contract oil and
gas drilling), 2000 Post Oak Boulevard, Houston, Texas; Marshall Erdman and
Associates, Inc. (design, engineering, and construction firm), 5117
University Avenue, Madison, Wisconsin; MGIC Investment Corporation
(investment company), MGIC Plaza, 111 E. Kilbourn Avenue, Milwaukee,
Wisconsin; Ameritech, Inc. (regional holding company for telephone
companies), 30 South Wacker Drive, Chicago, Illinois, Director (since
1995), Energy Ventures, Inc., 5 Post Oak Park, Houston, Texas; Director
(1989-1995), Prideco, Inc. (drill collar manufacturer), 6039 Thomas Road,
Houston, Texas.
WILLIAM B. MARX, JR., Director and Member, Dividend Policy and Board Affairs
Committees
Consultant (1996-1997); Senior Executive Vice President (1996), Lucent
Technologies, Inc. (public telecommunications systems and software), 600
Mountain Road, Murray Hill, New Jersey; Executive Vice President and Chief
Executive Officer, Multimedia Products Group (1994-1995), AT&T (global
communications and network computing company), 295 North Maple Avenue,
Basking Ridge, New Jersey; Director (since 1996), California Microwave,
Inc., Redwood City, California; Member, National Board of Directors, Junior
Achievement, Colorado Springs, Colorado; Member (since 1996), Advisory
Council, Graduate School of Business, Stanford University, Stanford,
California; Chairman, Executive Committee (since 1996), National Minority
Supplier Development Council, Inc., 15 West 39th Street, New York, New
York.
JOHN F. MAYPOLE, Director and Member, Board Affairs and Human Resources
Committees
Managing Partner, Peach State Real Estate Holding Company (real estate
investment company), P.O. Box 1223, Toccoa, Georgia; Consultant to
institutional investors; Co-owner of family businesses (including Maypole
Chevrolet-Geo, Inc. and South Georgia Car Rentals, Inc.); Director (since
1996), Coating Technologies International; Director, Chairman, Finance
Committee and Member, Executive Committee and Human Resources Committee on
Directors, Bell Atlantic Corporation (telecommunications), 1717 Arch
Street, Philadelphia, Pennsylvania; Director and Chairman, Compensation
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Committee, Briggs Industries, Inc. (plumbing fixtures), 4350 W. Cypress
Street, Tampa, Florida; Director, Chairman, Audit Committee and Member,
Compensation Committee, Blodgett Corporation; Director, Chairman, Products
Committee and Member, Compensation and Audit Committee (until 1996), Igloo
Corporation (portable coolers), 1001 W. Sam Houston Parkway North, Houston,
Texas; Director and Member, Senior Management Committee, Dan River, Inc.
(textile manufacturer), 2291 Memorial Drive, Danville, Virginia; Director,
Davies, Turner & Company; Director (1989-1996), Connecticut Mutual Life
Insurance Company, 140 Garden Street, Hartford, Connecticut.
DONALD F. MCCULLOUGH, Director and Member, Dividend Policy and Auditing
Committees
Retired (since 1988); former Chairman and Chief Executive Officer, Collins
& Aikman Corp. (manufacturer of textile products), 210 Madison Avenue, New
York, New York; Director (1971-1996); Bankers Trust New York Corp. (bank
holding company) and Bankers Trust Company (principal offices, 280 Park
Avenue, New York, New York); Director (1975-1996), Melville Corporation
(specialty retailer), One Theall Road, Rye, New York.
JOHN J. PAJAK, President and Chief Operating Officer, Director and Member,
Dividend Policy and Investment Committees
President, Director and Chief Operating Officer (since 1996), Vice Chairman
and Chief Administrative Officer (1996), Executive Vice President
(1987-1996) of MassMutual; Director (since 1994), MassMutual Holding
Company (wholly-owned holding company subsidiary of MassMutual); Trustee
(since 1996), MassMutual Holding Trust I (wholly-owned holding company
subsidiary of MassMutual Holding Company); Director (since 1996),
MassMutual International Inc. (wholly-owned subsidiary of MassMutual
Holding Company to act as service provider for international insurance
companies); Director (1994-1996), MassMutual Holding Company Two, Inc.
(former wholly-owned holding company subsidiary of MassMutual); MassMutual
Holding Company Two MSC, Inc. (former wholly-owned holding company
subsidiary of MassMutual Holding Company Two, Inc.); and Mirus Insurance
Company (formerly MML Pension Insurance Company, a wholly-owned insurance
subsidiary of MassMutual Holding Company Two MSC, Inc.) (principal offices,
1295 State Street, Springfield, Massachusetts); Director (1995-1996),
National Capital Health Plan, Inc. (health maintenance organization),
Washington, D.C.
THOMAS B. WHEELER, Chairman and Chief Executive Officer, Chairman, Investment
Committee and Member, Dividend Policy and Board Affairs Committees
Chairman (since 1996), Chief Executive Officer (since 1988), and President
(1987-1996) of MassMutual; Chairman (since 1996), MassMutual Holding Trust
I (wholly-owned holding company subsidiary of MassMutual Holding Company);
Director (since 1996), MassMutual International Inc. (wholly-owned
subsidiary of MassMutual Holding Company to act as service provider for
international insurance companies); Chairman and
C-16
<PAGE>
Chief Executive Officer (since 1995), DLB Acquisition Corporation (holding
company for investment advisers); Chairman of the Board of Directors (1994-
1996), Mirus Insurance Company (formerly MML Pension Insurance Company, a
wholly-owned insurance subsidiary of MassMutual Holding Company Two MSC,
Inc.) (principal offices, 1295 State Street, Springfield, Massachusetts);
Director, The First National Bank of Boston and Bank of Boston Corporation
(bank holding company), 100 Federal Street, Boston, Massachusetts and
Massachusetts Capital Resources Company, 545 Boylston Street, Boston,
Massachusetts; Chairman and Director, Oppenheimer Acquisition Corp. (parent
of OppenheimerFunds, Inc., an investment management company), Two World
Trade Center, New York, New York; Director (since 1993), Textron, Inc.
(diversified manufacturing company), 40 Westminster Street, Providence,
Rhode Island; Chairman of the Board of Directors (1992-1995), Concert
Capital Management, Inc. (former wholly-owned investment advisory
subsidiary of DLB Acquisition Corporation), One Memorial Drive, Cambridge,
Massachusetts.
ALFRED M. ZEIEN, Director and Member, Board Affairs and Human Resources
Committees
Chairman and Chief Executive Officer, The Gillette Company (manufacturer of
personal care products), Prudential Tower Building, Boston, Massachusetts;
Director: Polaroid Corporation (manufacturer of photographic products), 549
Technology Square, Cambridge, Massachusetts; Repligen Corporation
(biotechnology), One Kendall Square, Cambridge, Massachusetts; Bank of
Boston Corporation (bank holding company), 100 Federal Street, Boston,
Massachusetts; and Raytheon Corporation (electronics manufacturer), 141
Spring Street, Lexington, Massachusetts; Trustee, University Hospital of
Boston, Massachusetts; Trustee, Marine Biology Laboratory and Woods Hole
Oceanographic Institute, Woods Hole, Massachusetts.
Executive Vice Presidents
LAWRENCE V. BURKETT, JR., Executive Vice President and General Counsel
Executive Vice President and General Counsel (since 1993) of MassMutual;
President, Chief Executive Officer and Director (since 1996), CM Assurance
Company, CM Benefit Insurance Company, C.M. Life Insurance Company and MML
Bay State Life Insurance Company (wholly-owned insurance company
subsidiaries of MassMutual); Director (since 1996), MassMutual Holding MSC,
Inc. and Trustee (since 1996), MassMutual Holding Trust I and MassMutual
Holding Trust II (wholly-owned holding company subsidiaries of MassMutual
Holding Company); Director (since 1997), MML Securities Corporation (a
wholly-owned subsidiary of MML Investors Services, Inc. that is a
"Massachusetts Securities Corporation"); Director (since 1996): MassMutual
International Inc. (wholly-owned subsidiary of MassMutual Holding Company
to act as service provider for international insurance companies); G.R.
Phelps, Inc. (wholly-owned broker-dealer subsidiary of MassMutual Holding
Company); CM Advantage Inc.(wholly-owned subsidiary of MassMutual Holding
Trust II to act as general partner in real estate
C-17
<PAGE>
limited partnerships); Director, MassMutual Holding Company (wholly-owned
holding company subsidiary of MassMutual); Director (1994-1996), MassMutual
Holding Company Two, Inc. (former wholly-owned holding company subsidiary
of MassMutual), MassMutual Holding Company Two MSC, Inc. (former wholly-
owned holding company subsidiary of MassMutual Holding Company Two, Inc.)
and Mirus Insurance Company (formerly MML Pension Insurance Company, a
wholly-owned insurance subsidiary of MassMutual Holding Company Two MSC,
Inc.) (principal offices, 1295 State Street, Springfield, Massachusetts);
Chairman and Director (since 1996), MML Investors Services, Inc. (wholly-
owned broker-dealer subsidiary of MassMutual Holding Company), 1414 Main
Street, Springfield, Massachusetts; Director, Cornerstone Real Estate
Advisers, Inc. (wholly-owned real estate investment adviser subsidiary of
MassMutual Holding Company), One Financial Plaza, Suite 1700, Hartford,
Connecticut; Vice President (since 1996) and Director, Sargasso Mutual
Insurance Co., Ltd., Victoria Hall, Victoria Street, Hamilton, Bermuda;
Director, MassMutual of Ireland, Ltd. (wholly-owned subsidiary of
MassMutual that formerly provided group insurance claim services), One
Earlsfort Centre, Hatch Street, Dublin, Ireland; Chairman (1994-1996),
Director (1993-1996), MML Reinsurance (Bermuda) Ltd. (wholly-owned property
and casualty reinsurance subsidiary of MassMutual Holding Company) and
Director (since 1995), MassMutual International (Bermuda) Ltd. (wholly-
owned subsidiary of MassMutual Holding Company that distributes variable
insurance products in overseas markets) (principal offices, 41 Cedar
Avenue, Hamilton, Bermuda).
JOHN B. DAVIES, Executive Vice President
Executive Vice President (since 1994) of MassMutual; Director (since 1996),
CM Assurance Company, CM Benefit Insurance Company, C.M. Life Insurance
Company and MML Bay State Life Insurance Company (wholly-owned insurance
company subsidiaries of MassMutual); Director (since 1996), MassMutual
Holding MSC, Inc. and Trustee (since 1996), MassMutual Holding Trust II
(wholly-owned holding company subsidiaries of MassMutual Holding Company)
(principal offices, 1295 State Street, Springfield, Massachusetts);
Director, MML Investors Services, Inc. (wholly-owned broker-dealer
subsidiary of MassMutual Holding Company), MML Insurance Agency, Inc.
(wholly-owned subsidiary of MML Investors Services, Inc.), MML Insurance
Agency of Ohio, Inc. (subsidiary of MML Insurance Agency, Inc.); Director
(since 1995), MML Insurance Agency of Nevada, Inc. (subsidiary of MML
Insurance Agency, Inc.); Director (since 1996), MML Insurance Agency of
Mississippi, P.C., DISA Insurance Services of America, Inc. (Alabama), and
Diversified Insurance Services of America, Inc. (Hawaii) (subsidiaries of
MML Insurance Agency, Inc.) (principal offices, 1414 Main Street,
Springfield, Massachusetts); Director: Cornerstone Real Estate Advisers,
Inc. (wholly-owned real estate investment adviser subsidiary of MassMutual
Holding Company), One Financial Plaza, Suite 1700, Hartford, Connecticut;
and Life Underwriter Training Council, 7625 Wisconsin Avenue, Bethesda,
Maryland.
C-18
<PAGE>
JOHN V. MURPHY, Executive Vice President
Executive Vice President (since 1997) of MassMutual; Executive Vice
President, Director and Chief Operating Officer (1995-1997), David L.
Babson and Company Incorporated (wholly-owned investment advisory
subsidiary of DLB Acquisition Corporation), Chief Operating Officer
(1993-1996), Concert Capital Management, Inc. (wholly-owned investment
advisory subsidiary of DLB Acquisition Corporation), (principal offices,
One Memorial Drive, Cambridge, Massachusetts); Senior Vice President and
Director (since 1995), Potomac Babson Incorporated (investment advisory
subsidiary of David L. Babson and Company Incorporated), New York, New
York; Director and Senior Vice President (since 1995), DLB Acquisition
Corporation (holding company for investment advisers) and Trustee (since
1997), MassMutual Institutional Funds (open-end investment company)
(principal offices, 1295 State Street, Springfield, Massachusetts).
GARY E. WENDLANDT, Executive Vice President and Chief Investment Officer
Chief Investment Officer and Executive Vice President of MassMutual;
Chairman (since 1995), Trustee (since 1986) and President (1983-1995),
MassMutual Corporate Investors and Chairman (since 1995), Trustee (since
1988) and President (1988-1995), MassMutual Participation Investors
(closed-end investment companies); Chairman (since 1995), Vice Chairman
(1993-1995) and Trustee, MML Series Investment Fund (open-end investment
company); Chairman, Chief Executive Officer and Member, Investment Pricing
Committee, MassMutual Institutional Funds (open-end investment company);
Advisory Board Member (since 1996), MassMutual High Yield Partners LLC
(high yield bond fund); Chairman and President (since 1996), MassMutual
Holding MSC, Inc. and MassMutual Holding Trust II (wholly-owned holding
company subsidiaries of MassMutual Holding Company); Chairman (since 1996):
Antares Leveraged Capital Corp. (finance company); HYP Management, Inc.
(wholly-owned subsidiary of MassMutual Holding Trust II to act as managing
member of MassMutual High Yield Partners LLC); and MMHC Investment, Inc.
(wholly-owned subsidiary of MassMutual Holding Trust II); President and
Trustee (since 1996), MassMutual Holding Trust I (wholly-owned holding
company subsidiary of MassMutual Holding Company); Vice Chairman and
Director (since 1996), MassMutual International Inc. (wholly-owned
subsidiary of MassMutual Holding Company to act as service provider for
international insurance companies); Director (since 1996), CM Advantage
Inc. (wholly-owned subsidiary of MassMutual Holding Trust II to act as
general partner in real estate limited partnerships); President and
Director (since 1995), DLB Acquisition Corporation (holding company for
investment advisers); Chairman, Chief Executive Officer, President and
Director, MassMutual Holding Company (wholly-owned holding company
subsidiary of MassMutual); Chairman and Director, MML Realty Management
Corporation (wholly-owned real estate management subsidiary of MassMutual
Holding Company); Chairman (1994-1995) and Director (1993-1995), MML Real
Estate Corporation (wholly-owned real estate management subsidiary of
MassMutual Holding Company) Chairman, President and Chief Executive Officer
(1994-1996), MassMutual
C-19
<PAGE>
Holding Company Two, Inc. (former wholly-owned holding company subsidiary
of MassMutual); Chairman and President (1994-1996), Chief Executive Officer
(1995-1996), MassMutual Holding Company Two MSC, Inc. (former wholly-owned
holding company subsidiary of MassMutual Holding Company Two, Inc.);
(principal offices, 1295 State Street, Springfield, Massachusetts);
Chairman and Member, Executive and Compensation Committees (since 1994),
Member, Audit Committee (since 1995), and Chief Executive Officer (1994-
1996), Cornerstone Real Estate Advisers, Inc. (wholly-owned real estate
investment advisory subsidiary of MassMutual Holding Trust I), One
Financial Plaza, Suite 1700, Hartford, Connecticut; President and Chief
Executive Officer (1994-1996) and Director (1992-1996), Concert Capital
Management, Inc.(former investment advisory subsidiary of DLB Acquisition
Corporation) One Memorial Drive, Cambridge, Massachusetts; Director,
Oppenheimer Acquisition Corporation (parent of OppenheimerFunds, Inc., an
investment management company), Two World Trade Center, New York, New York;
Supervisory Director, MassMutual/Carlson CBO N.V. (collateralized bond
fund), 14 John Gorsiraweg, Willemstad, Curacao, Netherlands Antilles;
Director, Merrill Lynch Derivative Products, Inc., World Financial Center,
North Tower, New York, New York; MassMutual Corporate Value Partners
Limited (investor in debt and equity securities) and MassMutual Corporate
Value Limited (parent of MassMutual Corporate Value Partners Limited)
(principal offices, c/o BankAmerica Trust and Banking Corporation, Box
1092, George Town, Grand Cayman, Cayman Islands, British West Indies);
Director (since 1995), Mass Seguros de Vida, S.A., Huerfanos No. 770,
Santiago, Chile; President and Director (since 1995), MassMutual
International (Bermuda) Ltd. (wholly-owned subsidiary of MassMutual Holding
Company that distributes variable insurance products in overseas markets),
41 Cedar Avenue, Hamilton, Bermuda.
JOSEPH M. ZUBRETSKY, Executive Vice President And Chief Financial Officer
Executive Vice President and Chief Financial Officer (since 1997) of
MassMutual; Chief Financial Officer (1996-1997) Healthsource, Hooksett, New
Hampshire; Partner (1990-1996), Coopers & Lybrand LLC (certified public
accountants), Hartford, Connecticut; Director (since 1997): Antares
Leverage Capital Corp. (finance company), Chicago, Illinois; DLB
Acquisition Corporation (holding company for investment adviser);
MassMutual Holding Company (wholly-owned holding company subsidiary of
MassMutual); MassMutual International, Inc. (wholly-owned subsidiary of
MassMutual Holding Company to act as service provider for international
insurance companies) (principal offices, 1295 State Street, Springfield,
Massachusetts); Oppenheimer Acquisition Corporation (parent of
OppenheimerFunds, Inc., an investment management company), Two World Trade
Center, New York, New York.
C-20
<PAGE>
B. THE SUB-INVESTMENT ADVISER
--------------------------
Mellon Equity is the Sub-Investment Adviser for Registrant. Mellon Equity
provides investment advisory services, primarily to institutional and employee
benefit customers.
The trustees and executive officers of Mellon Equity their positions and their
other business affiliations and business experience for the past two years are
as follows:
WILLIAM KEITH SMITH, TRUSTEE
The Dreyfus Corporation, 200 Park Avenue, New York, New York 10166 (Mutual
Funds) Vice Chairman (January, 1995 - Present). Director (August 1994 -
Present). Access Capital Strategies Corp., Boston, Massachusetts (Investment
Advisers) Director (July 1994 - Present). Shearson Summit Euromanagement, Inc.,
Pittsburgh, Pennsylvania (Mellon Sub Trust) Director, Chairman, CEO, President
(September 1993 -Present). Shearson Summit Europartners, Inc., Pittsburgh,
Pennsylvania (Mellon Sub Trust) Director, Chairman, CEO, President (September
1993 - Present). Shearson Summit Management, Pittsburgh, Pennsylvania (Mellon
Sub Trust) Director, Chairman, CEO, President (September 1993 - Present).
Shearson Summit Partners, Inc., Pittsburgh, Pennsylvania (Mellon Sub Trust)
Director, Chairman, CEO, President (September 1993 - Present). Shearson Venture
Capital, Inc., Pittsburgh, Pennsylvania, (Mellon Sub Trust) Director, Chairman,
CEO, President (September 1993 - Present). The Boston Company, Inc., Boston,
Massachusetts (Financial Services) Director (May 1993 - Present). The Boston
Company Asset Management, Inc., One Boston Place, Boston, Massachusetts 02108
(Investment Adviser) Director (June 1993 - Present). The Boston Company
Overseas Banking Corp., New York, New York (Holding Company) President (June
1993 - December 1995). The Boston Company Advisors, Inc., Boston, Massachusetts
(Investment Adviser) Director (June 1993 - November 1995). TBC Securities Co.,
Inc., Boston, Massachusetts (Financial Services) Director and President (June
1993 - Present). Wellington-Medford II Properties, Inc., Boston, Massachusetts
(Real Estate Sub) Director and President (June 1993 - Present). First Boylston
Corporation, Boston, Massachusetts (Real Estate Sub) Director and President
(June 1993 -October 1995). Boston Safe Deposit & Trust Company, One Boston
Place, Boston, Massachusetts 02108 (Banking) Director, Chairman and CEO (May
1993 - Present). Boston Group Holdings, Inc., Boston, Massachusetts (Holding
Company) Director and Chairman (May 1993 - Present). The Boston Company, Inc.,
One Boston Place, Boston, Massachusetts 02108 (Financial Services) Chairman and
CEO (May 1993 - Present). Mellon Europe Limited, London England, (Banking)
Director (December 1992 - Present). Laurel Capital Advisors, Suite 3435, One
Mellon Bank Center, Pittsburgh, Pennsylvania 15258 (Investment Adviser) Trustee
(December 1991 - Present). Mellon Bond Associates, Pittsburgh, Pennsylvania
(Investment Adviser) Trustee (December 1991 - Present). Mellon Global Investing
Corp., One Mellon Bank Center, Pittsburgh, Pennsylvania 15258 (Mellon Sub Trust)
Director (October 1991 - Present). Mellon Financial Services Corp. #17, One
Executive Drive, Fort Lee, New Jersey 07024 (Mellon Sub Trust) Director and
Chairman (June 1991 - Present). Mellon Accounting Services, Inc., Suite 3102, 3
M Mellon Bank Center, Pittsburgh, Pennsylvania 15258 (Mellon Sub Trust) Director
(March 1991 - Present). MGIC-UK Ltd., London England EC2M 4LR (Investment
Adviser) Director (March 1991 - Present). Pareto Partners, London, England
(Investment Adviser) Partner Rep. (November 1990 - Present). Mellon Capital
Management Corp., 595 Market Street, San Francisco, California 94105 (Investment
Adviser) Director (December 1987 - Present). Franklin Portfolio Associates
Trust, One Post Office Square, Boston,
C-21
<PAGE>
Massachusetts 02109 (Investment Adviser) Trustee (December 1987 - Present).
Mellon Financial Company, One Mellon Bank Center, Pittsburgh, Pennsylvania 15258
(Mellon Sub Debt) Director and Chairman (August 1987 - Present). Mellon Bank
Corporation, One Mellon Bank Center, Pittsburgh, Pennsylvania 15258 (Banking)
Director and Vice Chairman (July 1987 -Present). Mellon Bank, N.A., One Mellon
Bank Center, Pittsburgh, Pennsylvania 15258 (Banking) Director and Vice Chairman
(July 1987 -Present).
CHRISTOPHER MARK CONDRON, TRUSTEE AND CHAIRMAN
Certus Asset Advisors Corporation, One Bush Street, San Francisco, California
94104 (Investment Adviser) Director (1995 - Present). Access Capital Strategies
Corporation, Boston, Massachusetts (Investment Adviser) Director (1995 -
Present). Mellon Capital Management Corporation, 545 Market Street, San
Francisco, California 94105 (Investment Adviser) Director (1995 - Present).
Mellon Bank, N.A., One Mellon Bank Center, Pittsburgh, Pennsylvania 15256
(Banking) Vice Chairman (1994 - Present). The Boston Company Asset Mgmt. Inc.,
One Boston Place, Boston, Massachusetts 02108 (Investment Adviser) Chairman
Director (1995 - Present). Franklin Portfolio Associates Trust, Suite 3360, One
Post Office Square, Boston, Massachusetts 02109 (Investment Adviser) Trustee
(1995 - Present). The Boston Company, Inc., One Boston Place, Boston,
Massachusetts 02108 (Financial Services) Director (1993 - Present). Boston Safe
Deposit & Trust Company, One Boston Place, Boston, Massachusetts 02108 (Banking)
President (1989 - Present). Laurel Capital Advisors, Pittsburgh, Pennsylvania
(Investment Adviser) Trustee (1993 - Present). Pareto Partners, London, England
(Investment Adviser) Partner Rep. (March 1991 - Present). Mellor Bond
Associates, Suite 4135, One Mellon Bank Center, Pittsburgh, Pennsylvania 15258
(investment adviser) Trustee (1995 - Present). Mellon Bank Corporation, One
Mellon Bank Center, Pittsburgh, Pennsylvania 15258 (banking) Vice Chairman
(1994 - Present).
RONALD PHILIP O'HANLEY, TRUSTEE AND CHAIRMAN
Certus Asset Advisers Corporation, One Bush Street, San Francisco, California
94104 (investment Adviser) Director (February 1997 - Present). Mellon Capital
Management Corporation, 545 Market Street, San Francisco, California 94195
(investment adviser) Director (February 1997 - Present). The Boston Company
Asset Management Inc., One Boston Place, Boston, Massachusetts 02108 (investment
adviser) Director (February 1997 - Present). Boston Safe Advisors, Inc., Boston,
Massachusetts (investment adviser) Director (February 1997 - Present).
Mellon-France Corporation, Pittsburgh, Pennsylvania (investment Adviser)
Director (March 1997 - Present). Franklin Portfolio Holdings, Inc., Boston,
Massachusetts (holding company) Director (March 1997 - Present). Laurel Capital
Advisors, Pittsburgh, Pennsylvania (investment adviser) Trustee (March 1997 -
Present). McKinsey & Company, Inc., Boston, Massachusetts (consulting) Partner
(1986 - 1997).
JAMES MILTON GOCKLEY, TRUSTEE AND ASSISTANT GENERAL COUNSEL
Dreyfus Financial Services Corp., New York, New York (mutual funds) Vice
President (September 1996 - Present). Franklin Portfolio Associates Trust, Suite
3360, One Post Office Square, Boston, Massachusetts 02109 (investment adviser)
Vice President and Chief Legal Officer (November 1995 - Present). Mellon
Securities Trust Company, New York, New York (trust company) Vice President
(September 1995 - Present). Dreyfus Investment Services Corporation, Pittsburgh,
Pennsylvania (brokerage services) Vice President (August 1995 - Present). Laurel
Capital Advisers, Pittsburgh, Pennsylvania (investment adviser) Vice President
(August 1995 - Present). Boston Safe Deposit and Trust Company, One Boston
Place, Boston, Massachusetts 02108 (financial sercies) General Counsel (August
1995 - Present). Mellon Accounting Services, Inc. Suite 3102, 3 Mellon Bank
Center, Pittsburgh, Pennsylvania 15258 (Mellon Trust subsidiary) Vice President
(August 1995 - Present). Mellon Bond Associates, Pittsburgh, Pennsylvania
(Mellon Trust subsidiary) Trustee and Vice President (1995 - Present). Mellon
Capital Management Corporation, 545 Market Street, San Francisco, California
94105 (investment adviser) Vice President (August 1995 - Present). Mellon-France
Corporation Pittsburgh, Pennsylvania (investment adviser) Vice President (August
1995 - Present). Mellon Bank Corporation, One Mellon Bank Center, Pitsburgh,
Pennsylvania 15258 (bank holding company) Assistant General Counsel (October
1992 - Present). Mellon Bank, N.A., One Mellon Bank Center, Pittsburgh,
Pennsylvania 15258 (banking) Assistant Secretary (April 1990 - Present).
EXECUTIVE OFFICERS:
WILLIAM PAUL RYDELL, TRUSTEE, PRESIDENT AND CHIEF EXECUTIVE OFFICER
JOAN ANTONIAZZI GREEN, TREASURER
Mellon Bond Associates, Pittsburgh, Pennsylvania (investment adviser) Treasurer
(October 1996 - Present). Mellon Capital Management Corporation, 545 Market
Street, San Francisco, California 94195 (investment adviser) Treasurer (August
1994 - Present). Mellon Securities Trust Company, New York, New York (trust
company) Assistant Treasurer (March 1996 - Present). Mellon Bank, N.A., One
Mellon Bank Center, Pittsburgh, Pennsylvania 15258 (banking) Finance (May 1984 -
Present).
C-22
<PAGE>
Present). Shearson Summit Management Inc., Pittsburgh, Pennsylvania (Mellon Sub
Trust) Director, VP and Treasurer (September 1993 - Present). Shearson Summit
Partners Inc., Pittsburgh, Pennsylvania (Mellon Sub Trust) Director, VP and
Treasurer, Pittsburgh, Pennsylvania (Mellon Sub Trust) Director VP and Treasurer
(September 1993 -Present). Shearson Venture Capital Inc., Pittsburgh,
Pennsylvania (Mellon Sub Trust) Director, VP and Treasurer (September 1993 -
Present). Mellon Bond Associates, One Mellon Bank Center, Pittsburgh,
Pennsylvania 15258 (Investment Adviser) Treasurer (September 1993 - Present).
Laurel Capital Advisors, One Mellon Bank Center, Pittsburgh, Pennsylvania 15258
(Investment Adviser) Treasurer (September 1993 - Present). Mellon Securities
Trust Company, 120 Broadway, New York 10271 (Mellon Sub Trust) Treasurer (July
1993 - Present).
ROBERT ALEXANDER WILK, SENIOR VICE PRESIDENT AND PORTFOLIO MANAGER
JOHN ROBERT O'TOOLE, SENIOR VICE PRESIDENT AND SENIOR PORTFOLIO
STEVEN ANTHONY FALCI, SENIOR VICE PRESIDENT AND SENIOR PORTFOLIO MANAGER
NYNEX Corporation, New York, New York (Pension Investment) Managing Director,
Portfolio Manager (April 1986 - March 1994).
RONALD PAUL GALA, SENIOR VICE PRESIDENT AND PORTFOLIO MANAGER
JOHN WRAY KELLER, DIRECTOR OF EQUITY TRADING
Virginia Retirement System, Richmond Virginia (Pension Management) Equity Trader
(August 1988 -February 1994).
ITEM 29: PRINCIPAL UNDERWRITERS
- -------- ----------------------
Not Applicable.
ITEM 30: LOCATION OF ACCOUNTS AND RECORDS
- -------- --------------------------------
Each account, book or other document required to be maintained by Registrant
pursuant to Section 31 (a) of the Investment Company Act of 1940 and Rules 31a-1
to 31a-3 thereunder are maintained by Registrant at 1295 State Street,
Springfield, Massachusetts 01111 by Mellon Equity Associates at 500 Grant
Street, Pittsburgh, Pennsylvania 15258, by First Data Investor Services Group,
Inc. at 4400 Computer Drive Westborough, Massachusetts 01581 and by Boston Safe
Deposit and Trust Company at One Boston Place, Boston, Massachusetts 02108.
ITEM 31: MANAGEMENT SERVICES
- -------- -------------------
Not Applicable.
- ---------------
ITEM 32: UNDERTAKINGS
- -------- ------------
Not Applicable
C-23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, Registrant certifies that it has duly caused this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Springfield and in the Commonwealth of
Massachusetts on the 22nd day of October, 1997.
MML SERIES INVESTMENT FUND
By: /s/ Hamline C. Wilson
---------------------------------------------
Hamline C. Wilson
Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on this 14th day of February, 1997.
SIGNATURE TITLE
--------- -----
/s/ Gary E. Wendlandt Trustee
--------------------------
Gary E. Wendlandt
* Trustee
--------------------------
Richard G. Dooley
* Trustee
---------------------------
Mary E. Boland
* Trustee
---------------------------
Ronald J. Abdow
* Trustee
---------------------------
Charles J. McCarthy
* Trustee
---------------------------
John H. Southworth
C-24
<PAGE>
SIGNATURE TITLE
--------- -----
* President
---------------------------
Stuart H. Reese (Principal Executive Officer)
/s/ Hamline C. Wilson Chief Financial Officer
----------------------------
Hamline C. Wilson (Principal Financial &
Accounting Officer)
*By:/s/ Stephen L. Kuhn
-------------------
Stephen L. Kuhn
Attorney-in-Fact
NOTICE
THE NAME MML SERIES INVESTMENT FUND IS THE DESIGNATION OF THE TRUSTEES UNDER AN
AGREEMENT AND DECLARATION OF TRUST DATED DECEMBER 19, 1984, AS AMENDED FROM TIME
TO TIME. THE OBLIGATIONS OF MML TRUST ARE NOT PERSONALLY BINDING UPON, NOR SHALL
RESORT BE HAD TO THE PROPERTY OF, ANY OF THE TRUSTEES, SHAREHOLDERS, OFFICERS,
EMPLOYEES OR AGENTS OF MML TRUST, BUT ONLY THE PROPERTY OF THE RELEVANT SERIES
OF MML TRUST SHALL BE BOUND.
C-25
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. TITLE OF EXHIBIT
- ----------- ----------------
5(a) Investment Management Agreement between MML Series Investment Fund
(the "Trust"), on behalf of MML Equity Index Fund (the "Fund"), and
Massachusetts Mutual Life Insurance Company ("MassMutual").
5(b) Investment Sub-Advisory Agreement between MassMutual and Mellon Equity
Associates.
9 Accounting Services Agreement betweeen the Trust, on behalf of the
Fund, and First Data Investor Services Group, Inc.
27 Financial Data Schedule
C-26
<PAGE>
Exhibit 5(a)
INVESTMENT MANAGEMENT AGREEMENT
This INVESTMENT MANAGEMENT AGREEMENT (the "Agreement"), dated as of
April 25, 1997 by and between MML SERIES INVESTMENT FUND (the "Trust") on behalf
of MML EQUITY INDEX FUND (the "Fund") AND MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY (the "Adviser").
WHEREAS, the Trust, on behalf of the Fund, and the Adviser wish to enter
into an agreement setting forth the terms on which the Adviser will (1) perform
certain investment management services for the Fund, (2) perform administrative
functions relating to the Fund, and (3) assume certain expenses of the Fund.
NOW, THEREFORE, in consideration of the covenants and mutual promises of
the parties made to each other, it is hereby covenanted and agreed as follows:
1. INVESTMENT MANAGEMENT SERVICES TO BE RENDERED TO THE FUND. The Fund
---------------------------------------------------------
hereby engages the Adviser to act as investment adviser for and to manage
the investment and reinvestment of the assets of the Fund, subject to such
general or specific instructions as may be given by the Board of Trustees
of the Trust. The Adviser hereby agrees, at its own expense, to render the
services and to assume the obligations of investment manager.
2. SUB-ADVISORY AGREEMENTS. The Adviser may enter into sub-advisory
-----------------------
agreements with persons ("Sub-Advisers") pursuant to which the Adviser
delegates any or all of its functions hereunder to one or more Sub-Advisers
provided that a majority of the Trustees of the Trust who are not
interested persons of the Trust or the Adviser or any Sub-Adviser, approve
the agreement and provided further, that, to the extent required by the
Investment Company Act of 1940 and the Rules and Regulations thereunder, a
majority of the outstanding voting securities of the Fund must also approve
the agreement. The Adviser shall pay all compensation of any such Sub-
Advisers and will have the right to terminate the services of any Sub-
Adviser at any time on no more than 60 days' notice, subject to the
approval of the Board of Trustees, and thereupon shall at such time assume
the responsibilities of such Sub-Adviser unless and until a successor Sub-
Adviser is selected.
3. ADMINISTRATIVE SERVICES TO BE PROVIDED AND EXPENSES TO BE ASSUMED BY
--------------------------------------------------------------------
THE ADVISER. Until the termination of the employment of the Adviser as
-----------
investment manager for the Fund, the Adviser will provide, or provide for,
all services required for the administration of the Trust and the Fund, and
will assume all expenses of the Trust and the Fund other than those
expenses referred to in the following paragraph.
<PAGE>
The Adviser shall not be obligated to pay and the Fund or the Trust shall pay:
(1) taxes and corporate fees payable to governmental agencies; (2) brokerage
commissions and other capital items payable in connection with the purchase or
sale of the Fund's investment; (3) interest on account of any borrowings by the
Fund; (4) fees and expenses of the Trust's Trustees who are not interested
persons (as defined in the Investment Company Act of 1940) of the Adviser or of
the Trust; (5) fees and expenses of the Trust's Advisory Board Members; (6) fees
payable to the Trust's certified independent public accountants; and (7) any
required trademark licensing fees.
In placing portfolio transactions for the Fund, the Adviser will follow such
practices as may from time to time be set forth in the Trust's most recent
prospectus or specified by its Board of Trustees.
4. COMPENSATION TO BE PAID BY THE FUND TO THE ADVISER. For the services
--------------------------------------------------
rendered hereunder, the Fund shall pay to the Adviser as of the last day of each
calendar quarter a fee at the annual rate of: .40% of the first $100,000,000 of
average daily net asset value of the Fund determined as of the close of the New
York Stock Exchange on each day the Exchange is open for trading; .38% of the
next $150,000,000 and .36% on any net assets thereafter or such lesser amount
as MassMutual may from time to time inform the Fund, on a date prior to the
accrual of such fee, that MassMutual chooses to change the Fund.
5. SERVICES OF THE ADVISER TO THE TRUST AND THE FUND NOT EXCLUSIVE. The
---------------------------------------------------------------
services of the Adviser to the Trust and the Fund under this Agreement are not
to be deemed exclusive and the Adviser shall be free to render similar services
to others.
6. USE OF NAME BY THE TRUST AND THE FUND. The Trust and the Fund
-------------------------------------
recognize the Adviser's control of the initials "MML" and agrees that its right
to use these initials is non-exclusive and can be terminated by the Adviser at
any time. The use of such initials will automatically be terminated if at any
time the Adviser or a wholly-owned subsidiary of the Adviser ceases to be
investment manager for the Fund. If, at any time, the use of the initials "MML"
is terminated, the continuance of this Agreement will be submitted to
shareholders of the Fund at a meeting specifically called for that purpose.
7. INTERESTED AND AFFILIATED PERSONS. It is understood that members of
---------------------------------
the Board of Trustees, officers, employees or agents of the Trust or the Fund
may also be directors, officers, employees or agents of the Adviser, and that
the Adviser, its directors, officers, employees or agents maybe interested in
the Fund as shareholders or otherwise.
-2-
<PAGE>
8. RECORDS AND CONFIDENTIALITY. All records pertaining to the operation
---------------------------
and administration of the Trust and the Fund (whether prepared by the Adviser or
supplied to the Adviser by the Trust or the Fund) are the property and subject
to the control of the Trust. In the event of the termination of this Agreement,
all such records in the possession of the Adviser shall be promptly turned over
to the Trust free from any claim or retention of rights. All such records shall
be deemed to be confidential in nature and the Adviser shall not disclose or use
any records or information obtained pursuant to this Agreement in any manner
whatsoever except as expressly authorized by the Trust or as required by federal
or state regulatory authorities. The Adviser shall submit to all regulatory and
administrative bodies having jurisdiction over the operations of the Adviser or
the Trust, present or future, any information, reports or other material
obtained pursuant to this Agreement which any such body may request or require
pursuant to applicable laws or regulations.
9. LIABILITY REGARDING INVESTMENT MANAGEMENT. In the absence of willful
-----------------------------------------
misfeasance, bad faith or gross negligence in the performance of its obligations
and duties under this Agreement, or of reckless disregard of such obligations
and duties, neither the Adviser nor any of its officers, directors, employees or
agents shall be subject to liability for any act or omission in the course of,
or connected with, rendering services or performing its obligations hereunder.
10. TERMINATION AND AMENDMENT. This Agreement is effective as of the date
-------------------------
first written above and will continue in effect from year to year after the date
hereof, as long as it is specifically approved at least annually by vote of the
Board of Trustees of the Trust including the vote of a majority of such Trustees
who are not interested persons (as defined in the Investment Company Act of
1940) of the Adviser or of the Fund; provided, however, that (1) this Agreement
may at any time be terminated by the Trust on 60 days' written notice to the
Adviser without the payment of any penalty either by vote of the Board of
Trustees of the Trust or by the vote of a majority of the outstanding voting
securities of the Fund (as defined in the Investment Company Act of 1940); (2)
this Agreement shall immediately terminate in the event of its assignment
(within the meaning of the Investment Company Act of 1940); and (3) this
Agreement may be terminated by the Adviser on 60 days' written notice to the
Trust without the payment of any penalty. Any notice under this Agreement shall
be given in writing, addressed and delivered, or mailed postpaid, to the other
party at the principal office of such party.
This Agreement may be amended at any time by mutual consent of the parties,
provided that such consent on the part of the Fund shall have been approved at a
meeting by the vote of a majority of the outstanding voting securities of the
Fund and by the vote of a majority of the Trustees of the Trust who are not
interested persons of the Trust or interested persons of the Adviser.
-3-
<PAGE>
11. OBLIGATION OF THE TRUST. A copy of the Agreement and Declaration of
-----------------------
Trust of the Trust is on file with the Secretary of the Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed on
behalf of the Trustees as Trustees of the Trust and not individually, and that
the obligations of this Agreement are not binding upon any of the Trustees or
shareholders individually, but are binding only upon the assets and property of
the Fund.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
MML SERIES INVESTMENT FUND
on behalf of MML EQUITY INDEX FUND
By: /s/ Hamline C. Wilson
---------------------------------
Its: Vice President and CFO
--------------------------------
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Stuart H. Reese
---------------------------------
Its:
--------------------------------
-5-
<PAGE>
Exhibit 5(b)
INVESTMENT SUB-ADVISORY AGREEMENT
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
1295 State Street
Springfield, Massachusetts 01111
April 25, 1997
Mellon Equity Associates
500 Grant Street
Pittsburgh, PA 15258
Dear Sirs:
MML Equity Index Fund (the "Fund"), a series of MML Series Investment
Fund, a Massachusetts business trust (the "Trust"), desires to employ its
capital by investing and reinvesting the same in investments of the type and in
accordance with the limitations specified in the Fund's Prospectus and Statement
of Additional Information as from time to time in effect, copies of which
(including any amendments thereto) have been and will be submitted to Mellon
Equity Associates, a Pennsylvania business trust ("Mellon Equity"), and in such
manner and to such extent as from time to time may be approved by the Trust's
Board of Trustees. The Fund employs Massachusetts Mutual Life Insurance Company
("MassMutual") pursuant to a written agreement (the "Management Agreement"), a
copy of which has been furnished to Mellon Equity. MassMutual desires to employ
Mellon Equity to act as the Fund's investment sub-adviser.
In this connection, it is understood that from time to time Mellon Equity
will employ or associate with itself such person or persons as Mellon Equity may
believe to be particularly fitted to assist Mellon Equity in the performance of
this Agreement. The compensation of such person or persons shall be paid by
Mellon Equity and no obligation may be incurred on the Fund's behalf in any such
respect.
Subject to the supervision and approval of MassMutual, Mellon Equity will
provide investment management of the Fund's portfolio in accordance with the
Fund's investment objective, policies and restrictions as stated in the Fund's
Prospectus and Statement of Additional Information as from time to time in
effect. In connection therewith, Mellon Equity will supervise the Fund's
investments and, if appropriate, the sale and reinvestment of the Fund's assets.
Mellon Equity is authorized to invest the Fund's assets in securities issued by
Mellon Bank Corporation, to the extent required or permitted by the Fund's
investment objective, policies and restrictions, and to the extent permitted by
the U.S. Securities and Exchange Commission or other applicable authorities.
Mellon Equity will furnish to
<PAGE>
MassMutual or the Fund such statistical information, with respect to the
investments that the Fund may hold or contemplate purchasing, as MassMutual or
the Fund may reasonably request. The Fund and MassMutual wish to be informed of
important developments materially affecting the Fund's portfolio and shall
expect Mellon Equity, on its own initiative, to furnish to the Fund or
MassMutual from time to time such information as Mellon Equity may believe
appropriate for this purpose.
Mellon Equity shall vote, in its discretion and in accordance with its
fudiciary duty, all proxies solicited by or with respect to issuers of
securities which are included in the Fund.
Mellon Equity shall exercise its best judgment in rendering the services to
be provided hereunder, and MassMutual agrees, as an inducement to Mellon
Equity's undertaking the same, that Mellon Equity shall not be liable hereunder
for any error of judgment or mistake of law or for any loss suffered by the Fund
or MassMutual, provided that nothing herein shall be deemed to protect or
purport to protect Mellon Equity against any liability to MassMutual, the Fund
or the Fund's security holders to which Mellon Equity would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of Mellon Equity's duties hereunder, or by reason of Mellon Equity's
reckless disregard of its obligations and duties hereunder.
In consideration of the services rendered pursuant to this Agreement,
MassMutual will pay Mellon Equity, on the tenth business day of each month,
out of the management fee it receives and only to the extent thereof, a fee
calculated daily and paid monthly at the annual rate of .09% of the first
$100,000,000 of the average daily net asset value of the Fund; .07% of the next
$150,000,000; and .05% on any net assets thereafter, for the preceding month.
So long as Mellon Equity is the sole investment sub-adviser for the Fund, the
fees for the custody services for the Fund, which will be provided by Boston
Safe Deposit and Trust Company, will be deducted from Mellon Equity's fees
hereunder.
Net asset value shall be computed on such days and at such time or times as
described in the Fund's then-current Prospectus and Statement of Additional
Information. The fee for the period from the date hereof to the end of the
month hereof shall be pro-rated according to the proportion which such period
bears to the full monthly period, and upon any termination of this Agreement
before the end of any month, the fee for such part of a month shall be pro-rated
according to the proportion which such period bears to the full monthly period.
For the purpose of determining fees payable to Mellon Equity, the value of the
Fund's net assets shall be computed in the manner specified in the Trust's
charter documents or the Fund's Prospectus and Statement of Additional
Information for the computation of the value of the Fund's net assets.
Mellon Equity will bear all expenses in connection with the performance of
its services under this Agreement. All other expenses to be incurred in the
operation of the Fund (other than those borne by MassMutual) will be borne by
the Fund, except to the extent specifically assumed by Mellon Equity.
-2-
<PAGE>
MassMutual understands that Mellon Equity now acts, and that from time to
time hereafter may act, as investment adviser to one or more other investment
companies and fiduciary or other managed accounts, and MassMutual has no
objection to Mellon Equity so acting. When purchase or sale of securities of the
same issuer is suitable for the investment objectives of the Fund and one or
more other investment companies or accounts managed by Mellon Equity which track
an equity index and have available funds for investment, such purchases or sales
may and normally will be combined, to the extent practicable, and will be
allocated as nearly as practicable on a pro rata basis in proportion to the
amounts to be purchased or sold for each. In determining the amounts to be
purchased or sold, the main factors Mellon Equity will consider will be the
investment objectives of the respective portfolios, the relative size of
portfolio holdings of the same or comparable security, availability of cash for
investment by the various portfolios and the size of their respective investment
commitments. Mellon Equity believes that the ability of the Fund to participate
in larger volume transactions will, in most cases, produce better execution for
the Fund although it is recognized that in some cases this procedure may
adversely affect the price paid or received by the Fund or the size of the
position obtainable for or disposed of by the Fund.
In allocating brokerage transactions for the Fund, Mellon Equity shall seek
to obtain the best execution of orders at the most favorable net price. Subject
to this determination, Mellon Equity may consider, among other things, the sale
of shares of the Fund as a factor in the selection of broker-dealers to execute
portfolio transactions for the Fund; provided, Mellon Equity may not consider
the provision of brokerage research services (as such term is defined in Section
28(e) of the Securities Exchange Act of 1934, as amended) in allocating
brokerage transactions for the Fund.
In addition, it is understood that the persons employed by Mellon Equity to
assist in the performance of its duties hereunder will not devote their full
time to such services and nothing contained herein shall be deemed to limit or
restrict Mellon Equity's rights or the right of any of its affiliates to engage
in and devote time and attention to other businesses or to render services of
whatever kind or nature, provided that such activities will not adversely affect
or otherwise impair the performance of Mellon Equity's duties and obligations
hereunder.
This Agreement shall continue until April 30, 1999, and thereafter shall
continue automatically for successive annual periods ending on April 30, of
each year, provided such continuance is specifically approved at least annually
by (i) the Trust's Board of Trustees or (ii) vote of a majority (as defined in
the Investment Company Act of 1940, as amended) of the Fund's outstanding voting
securities, provided that in either event its continuance also is approved by a
majority of the Trust's Board members who are not "interested persons" (as
defined in said Act) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval. This Agreement is
terminable without penalty (i) by MassMutual upon 60 days' written notice to
Mellon Equity, (ii) by the Trust's Board of Trustees or by vote of the holders
of a majority of the Fund's outstanding voting securities upon 60 days' written
notice to Mellon Equity, or (iii) by Mellon
-3-
<PAGE>
Equity upon not less than 90 days' written notice to the Fund and MassMutual.
This Agreement also will terminate automatically in the event of its assignment
(as defined in said Act). In addition, notwithstanding anything herein to the
contrary, if the Management Agreement terminates for any reason, this Agreement
shall terminate effective upon the date the Management Agreement terminates.
Mellon Equity agrees that all records pertaining to the operation and
administration of the Trust and the Fund (whether prepared by Mellon Equity or
supplied to Mellon Equity by MassMutual, the Trust or the Fund) are the property
and subject to the control of the Trust. In the event of the termination of this
Agreement, all such records in Mellon Equity's possession shall be promptly
turned over to the Trust free from any claim or retention of rights. All such
records shall be deemed to be confidential in nature and Mellon Equity shall not
disclose or use any records or information obtained pursuant to this Agreement
in any manner whatsoever except as expressly authorized by the Trust or as
required by federal or state regulatory authorities. Mellon Equity shall submit
to all regulatory and administrative bodies having jurisdiction over the
operations of Mellon Equity, MassMutual or the Trust, present or future, any
information, reports or other material obtained pursuant to this Agreement which
any such body may request or require pursuant to applicable laws or regulations.
Mellon Equity agrees that neither MassMutual, the Trust, the Fund nor
Mellon Equity are partners of or joint venturers with each other, and nothing
herein shall be construed so as to make them such partners or joint venturers or
impose any liability as such on any of them.
A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this Agreement is executed on behalf of the Trustees as Trustees of
the Trust and not individually, and that the obligations of this Agreement are
not binding upon any of the Trustees or shareholders individually, but are
binding only upon the assets and property of the Fund.
-4-
<PAGE>
If the foregoing is in accordance with your understanding, will Mellon
Equity kindly so indicate by signing and returning to MassMutual the enclosed
copy hereof.
Very truly yours,
MASSACHUSETTS MUTUAL
LIFE INSURANCE COMPANY
By: /s/ Stuart H. Reese
---------------------------
Name: Stuart H. Reese
Title:
Accepted and Agreed to By:
MELLON EQUITY ASSOCIATES
By: /s/ William P. Rydell
-------------------------
Name: William P. Rydell
Title: President and CEO
April 25, 1997
Accepted and Agreed to By:
MML SERIES INVESTMENT FUND, on behalf of MML Equity Index Fund
By: /s/ Hamline C. Wilson
-------------------------
Name: Hamline C. Wilson
Title: Vice President and CFO
-5-
<PAGE>
ACCOUNTING SERVICES AGREEMENT
THIS ACCOUNTING SERVICES AGREEMENT is made as of April 28, 1997 (the
"Agreement"), by and between MML Series Investment Fund, a Massachusetts
business trust (the "Company") on behalf of its series, MML Equity Index Fund
(the "Fund"), Massachusetts Mutual Life Insurance Company ("MassMutual") and
First Data Investor Services Group, Inc., a Massachusetts corporation ("FDISG").
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Company wishes to retain FDISG to provide certain fund
accounting services with respect to the Fund and FDISG is willing to furnish
such services;
WITNESSETH:
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints FDISG to provide certain
-----------
fund accounting and financial administrative services required by the Company
for the Fund for the period and on the terms set forth in this Agreement. FDISG
accepts such appointment and agrees to furnish the services herein set forth in
return for the compensation as provided in Section 4 of this Agreement. In the
event that the Company decides to retain FDISG to act as fund accountant
hereunder with respect to one or more portfolios other than the Funds, the
Company shall notify FDISG in writing. If FDISG is willing to render such
services, it shall notify the Company in writing whereupon such portfolio shall
become a Fund hereunder.
2. Delivery of Documents. The Company has furnished FDISG with copies
---------------------
properly certified or authenticated of each of the following:
(a) Resolutions of the Company's Board of Trustees authorizing
FDISG to provide certain fund accounting services to the Company and approving
this Agreement;
(b) The Company's Declaration of Trust (the "Articles") filed with
the Commonwealth of Massachusetts and all amendments thereto;
(c) The Company's By-Laws and all amendments thereto (the "By-
Laws");
(d) The Investment Advisory Agreement between MassMutual (the
"Adviser") and the Company (the "Advisory Agreement");
(e) The Custody Agreement between Boston Safe Deposit and Trust
Company (the "Custodian") and the Company (the "Custody Agreement");
(f) Post-Effective Amendment No. 35 under the Securities Act of
1933 and Amendment No. 20 under the Investment Company Act of 1940 (the "1940
Act") to the
<PAGE>
Company's Registration Statement on Form N-1A (the "Registration Statement")
under the Securities Act of 1933 and under the 1940 Act (File Nos.2-39334 and
811-2224), as filed with the Securities and Exchange Commission (the "SEC") on
February 14, 1997, relating to shares of beneficial interest of the Fund (the
"Shares"), and all amendments thereto; and
(g) The Fund's most recent prospectus and statement of additional
information and all amendments and supplements thereto (collectively, the
"Prospectuses").
The Company will furnish FDISG from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing, if any. Furthermore, the Company will provide FDISG with any other
documents that FDISG may reasonably request and will notify FDISG as soon as
possible of any matter materially affecting the performance by FDISG of its
services under this Agreement.
3. Services and Duties. Subject to the supervision and control of the
-------------------
Company, FDISG undertakes to provide the services described in Schedule C to
this Agreement, including but not limited to the following specific services:
(a) Accounting and bookkeeping services (including the maintenance
of such accounts, books and records of the Company as may be required by Section
31(a) of the 1940 Act and the rules thereunder);
(b) Internal auditing;
(c) Valuing the assets of each Fund and calculating the net asset
value of the shares of the Fund consistent with the Registration Statement at
the close of trading on the New York Stock Exchange ("NYSE") on each day on
which the NYSE is open for trading, and at such other times as the Board of
Directors may reasonably request;
(d) Accumulating information for and, subject to approval by the
Company's Treasurer, preparing reports to the Company's shareholders of record
and the SEC including, but not necessarily limited to, Annual Reports and Semi-
Annual Reports on Form N-SAR;
(e) Assisting the Adviser, at the Adviser's request, in monitoring
and developing compliance procedures for the Company which will include, among
other matters, procedures to assist the Adviser in monitoring compliance with
each Fund's investment objective, policies, restrictions, tax matters and
applicable laws and regulations; and
(f) Preparing and furnishing the Company (at the Company's request)
with performance information (including yield and total return information)
calculated in accordance with applicable U.S. securities laws and reporting to
external databases such information as may reasonably be requested.
In performing its duties under this Agreement, FDISG: (a) will act in
accordance with the Articles, By-Laws, Prospectuses and with the instructions
and directions of the Company and will conform to and comply with the
requirements of the 1940 Act and all other applicable Federal or state laws and
regulations; and (b) will consult with legal counsel to the Company, as
necessary
2
<PAGE>
and appropriate. Furthermore, FDISG shall not have or be required to have any
authority to supervise the investment or reinvestment of the securities or other
properties which comprise the assets of the Company or any of its Funds and
shall not provide any investment advisory services to the Company or any of its
Funds.
4. Compensation and Allocation of Expenses.
---------------------------------------
(a) For the services to be rendered, the facilities to be furnished
and the payments to be made by FDISG, as provided for in this Agreement,
MassMutual, on behalf of the Fund, will pay FDISG on the first business day of
each month a fee for the previous month as set forth in the Fee Schedule
attached hereto as Schedule A. For the purposes of calculating the fees
described herein, the Fund's average daily net assets will be deemed to be the
average daily value of the Fund's total assets minus the sum of the Fund's
liabilities (excluding the aggregate liquidation preference on the outstanding
shares of the Fund's auction rate preferred stock and accumulated dividends, if
any, thereon). Fees for the period from the date the Registration Statement is
declared effective by the SEC to the end of the month during which the
Registration Statement is declared effective shall be prorated according to the
proportion that such period bears to the full monthly period.
(b) MassMutual shall compensate FDISG for its services rendered
pursuant to this Agreement in accordance with the fees set forth above. Such
fees do not include out-of-pocket disbursements of FDISG for which FDISG shall
be entitled to bill separately. Reasonable out-of-pocket disbursements shall
include, but shall not be limited to, the items specified in Schedule B annexed
hereto and incorporated herein. Schedule B may be modified by FDISG upon not
less than thirty days' prior written notice to MassMutual.
(c) FDISG shall not be required to pay any of the following
expenses incurred by the Company: membership dues in the Investment Company
Institute or any similar organization; transfer agency expenses; investment
advisory expenses; costs of printing and mailing stock certificates,
prospectuses, reports and notices; interest on borrowed money; brokerage
commissions; taxes and fees payable to Federal, state and other governmental
agencies; fees of Trustees of the Company who are not affiliated with FDISG;
outside auditing expenses; outside legal expenses; or other expenses not
specified in this Section 4 which may be properly payable by the Company.
(d) FDISG will bill MassMutual as soon as practicable after the end
of each calendar month for out-of-pocket disbursements, and said billings will
be detailed in accordance with this Section and Schedule B. MassMutual will pay
to FDISG the amount of such billing within 30 days of such billing. FDISG may
charge a service fee equal to the lesser of (i) one and one half percent (1-
1/2%) per month or (ii) the highest interest rate legally permitted on any fees
not paid within 30 days of receipt of invoice.
(e) Upon any termination of this Agreement before the end of any
month, the fee for such period shall be prorated according to the proportion
which such period bears to the full month period. For purposes of determining
fees payable to FDISG, the value of each Fund's net assets shall be computed at
the time and in the manner specified in the most recent Prospectuses.
3
<PAGE>
(f) The Company acknowledges that the fees that FDISG charges
MassMutual under this Agreement reflect the allocation of risk between the
parties, including the limitations on liability in Section 5. Modifying the
allocation of risk from what is stated here would affect the fees that FDISG
charges, and in consideration of those fees, the Company agrees to the stated
allocation of risk.
(g) FDISG will from time to time employ or associate itself with
such person or persons as FDISG may believe to be particularly suited to assist
it in performing services under this Agreement. Such person or persons may be
officers and employees who are employed by both FDISG and the Company. The
compensation of such person or persons shall be paid by FDISG and no obligation
shall be incurred on behalf of the Company in such respect.
5. Limitation of Liability
-----------------------
(a) FDISG, its directors, officers, employees, shareholders and
agents shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Company or a Fund in connection with the performance of
this Agreement, except a loss resulting from willful misfeasance, bad faith, or
negligence on the part of FDISG in the performance of its obligations and duties
under this Agreement.
(b) Notwithstanding any provision in this Agreement to the
contrary, FDISG's cumulative liability (to the Company) for all losses, claims,
suits, controversies, breaches, or damages for any cause whatsoever (including
but not limited to those arising out of or related to this Agreement) and
regardless of the form of action or legal theory shall not exceed $1,000,000;
provided, however, that the above-referenced cap shall not apply to any losses
resulting from gross negligence on the part of FDISG in the performance of its
obligations under this Agreement.
(c) Each party shall have the duty to mitigate damages for which
the other party may become responsible.
(d) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN
NO EVENT SHALL FDISG, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE UNDER ANY THEORY OF TORT,
CONTRACT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR LOST PROFITS,
EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES,
EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF
WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER EITHER PARTY OR ANY ENTITY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
6. Indemnification.
---------------
(a) The Company shall indemnify and hold FDISG, its directors,
officers, employees, shareholders and agents harmless from and against any and
all claims, costs, expenses (including reasonable attorneys' fees), losses,
damages, charges, payments and liabilities of any sort or kind which may be
asserted against FDISG or for which FDISG may be held to be liable in
4
<PAGE>
connection with this Agreement or FDISG's performance hereunder (a "Claim"),
unless such Claim resulted from a negligent act or omission to act or bad faith
by FDISG in the performance of its duties hereunder.
(b) FDISG shall indemnify and hold the Company and the Fund and
each of its trustees, officers, employees, shareholders and agents harmless from
and against any and all Claims; provided that such Claim resulted from a
negligent act or omission to act or bad faith by FDISG in the performance of its
duties hereunder.
(c) In any case in which either party (the "Indemnifying Party")
may be asked to indemnify or hold the other party (the "Indemnified Party")
harmless, the Indemnified Party will notify the Indemnifying Party promptly
after identifying any situation which it believes presents or appears likely to
present a claim for indemnification against the Indemnifying Party, although the
failure to do so shall not prevent recovery by the Indemnified Party, and shall
keep the Indemnifying Party advised with respect to all developments concerning
such situation. The Indemnifying Party shall have the option to defend the
Indemnified Party against any claim which may be the subject of this
indemnification, and, in the event that the Indemnifying Party so elects, such
defense shall be conducted by counsel chosen by the Indemnifying Party and
satisfactory to the Indemnified Party, and thereupon the Indemnifying Party
shall take over complete defense of the claim and the Indemnified Party shall
sustain no further legal or other expenses in respect of such claim. The
Indemnified Party will not confess any claim or make any compromise in any case
in which the Indemnifying Party will be asked to provide indemnification, except
with the Indemnifying Party's prior written consent. The obligations of the
parties hereto under this Section 6 shall survive the termination of this
Agreement.
7. Termination of Agreement.
------------------------
(a) This Agreement shall be effective on the date first written
above and shall continue for a period of three (3) years (the "Initial Term"),
unless earlier terminated pursuant to the terms of this Agreement. Thereafter,
this Agreement shall automatically be renewed for successive terms of one (1)
year ("Renewal Terms") each.
(b) Either party may terminate this Agreement at the end of the
Initial Term or at the end of any subsequent Renewal Term upon not than less
than ninety (90) days or more than one hundred-eighty (180) days prior written
notice to the other party. The Company shall have the right to terminate this
Agreement upon the dissolution of the Company or the Fund upon not less than
ninety (90) days' prior written notice to FDISG of its intent to effect such
dissolution.
(c) In the event a termination notice is given by the Company, all
expenses associated with movement of records and materials and conversion
thereof will be borne by the Company.
(d) If a party hereto is guilty of a material failure to perform
its duties and obligations hereunder (a "Defaulting Party") resulting in a
material loss to the other party, such other party (the "Non-Defaulting Party")
may give written notice thereof to the Defaulting Party, and if such material
breach shall not have been remedied within thirty (30) days after such written
notice is given, then the Non-Defaulting Party may terminate this Agreement by
giving thirty (30)
5
<PAGE>
days written notice of such termination to the Defaulting Party. If FDISG is the
Non-Defaulting Party, its termination of this Agreement shall not constitute a
waiver of any other rights or remedies of FDISG with respect to services
performed prior to such termination or rights of FDISG to be reimbursed for out-
of-pocket expenses. In all cases, termination by the Non-Defaulting Party shall
not constitute a waiver by the Non-Defaulting Party of any other rights it might
have under this Agreement or otherwise against the Defaulting Party.
8. Modifications and Waivers. No change, termination, modification, or
-------------------------
waiver of any term or condition of the Agreement shall be valid unless in
writing signed by each party. No such writing shall be effective as against
FDISG unless said writing is executed by a Senior Vice President, Executive Vice
President or President of FDISG. A party's waiver of a breach of any term or
condition in the Agreement shall not be deemed a waiver of any subsequent breach
of the same or another term or condition.
9. No Presumption Against Drafter. FDISG and the Company have jointly
------------------------------
participated in the negotiation and drafting of this Agreement. The Agreement
shall be construed as if drafted jointly by the Company and FDISG, and no
presumptions arise favoring any party by virtue of the authorship of any
provision of this Agreement.
10. Publicity. Neither FDISG nor the Company shall release or publish
---------
news releases, public announcements, advertising or other publicity relating to
this Agreement or to the transactions contemplated by it without prior review
and written approval of the other party; provided, however, that either party
may make such disclosures as are required by legal, accounting or regulatory
requirements after making reasonable efforts in the circumstances to consult in
advance with the other party.
11. Severability. The parties intend every provision of this Agreement
------------
to be severable. If a court of competent jurisdiction determines that any term
or provision is illegal or invalid for any reason, the illegality or invalidity
shall not affect the validity of the remainder of this Agreement. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting the generality of this
paragraph, if a court determines that any remedy stated in this Agreement has
failed of its essential purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of damages, shall remain
fully effective.
12. Miscellaneous.
-------------
(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Company or FDISG shall be sufficiently
given if addressed to that party and received by it at its office set forth
below or at such other place as it may from time to time designate in writing.
To the Company:
MML Series Investment Fund
1295 State Street
Springfield, Massachusetts 01111
Attention: Raymond B. Woolson
6
<PAGE>
To MassMutual:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, Massachusetts 01111
Attention: Hamline C. Wilson
To FDISG:
First Data Investor Services Group, Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
Attention: President
with a copy to FDISG's General Counsel
(b) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns and
is not intended to confer upon any other person any rights or remedies
hereunder. This Agreement may not be assigned or otherwise transferred by either
party hereto, without the prior written consent of the other party, which
consent shall not be unreasonably withheld; provided, however, that FDISG may,
in its sole discretion, assign all its right, title and interest in this
Agreement to an affiliate, parent or subsidiary, or to the purchaser of
substantially all of its business. FDISG may engage subcontractors to perform
any of the obligations contained in this Agreement to be performed by FDISG;
provided, however, that FDISG shall not engage subcontractors to perform
substantially all of its obligations contained in this Agreement to be performed
by FDISG without the prior written consent of the Company which consent shall
not be unreasonably withheld. FDISG shall be as responsible to the Company for
the acts and omissions of any subcontractors as it is for its own acts and
omissions under this Agreement.
(c) The laws of the Commonwealth of Massachusetts, excluding the
laws on conflicts of laws, shall govern the interpretation, validity, and
enforcement of this Agreement. All actions arising from or related to this
Agreement shall be brought in the state and federal courts sitting in the City
of Boston, and FDISG and the Company hereby submit themselves to the exclusive
jurisdiction of those courts.
(d) This Agreement may be executed in any number of counterparts
each of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
13. Confidentiality. All books, records, information and data
---------------
pertaining to the business of the other party which are exchanged or received
pursuant to the negotiation or the carrying out
7
<PAGE>
of this Agreement shall remain confidential and shall not be voluntarily
disclosed to any other person, except as may be required in the performance of
duties hereunder or as otherwise required by law.
14. Force Majeure. No party shall be liable for any default or delay in
-------------
the performance of its obligations under this Agreement if and to the extent
such default or delay is caused, directly or indirectly, by (i) fire, flood,
elements of nature or other acts of God; (ii) any outbreak or escalation of
hostilities, war, riots or civil disorders in any country, (iii) any act or
omission of the other party or any governmental authority; (iv) any labor
disputes (whether or not the employees' demands are reasonable or within the
party's power to satisfy); or (v) nonperformance by a third party or any similar
cause beyond the reasonable control of such party, including without limitation,
failures or fluctuations in telecommunications or other equipment. In any such
event, the non-performing party shall be excused from any further performance
and observance of the obligations so affected only for so long as such
circumstances prevail and such party continues to use commercially reasonable
efforts to recommence performance or observance as soon as practicable.
Notwithstanding anything in this Agreement to the contrary, FDISG shall have in
place comprehensive business continuity and disaster recovery procedures and
systems and shall provide MassMutual, at least annually, test results of such
procedures and systems.
15. Entire Agreement. This Agreement, including all Schedules hereto,
----------------
constitutes the entire Agreement between the parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous proposals,
agreements, contracts, representations, and understandings, whether written or
oral, between the parties with respect to the subject matter hereof.
16. Obligation of the Trust. A copy of the Agreement and Declaration of
-----------------------
Trust of the Company is on file with the secretary of the Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed on
behalf of the Trustees as Trustees of the Company and not individually, and that
the obligations of this Agreement are not binding upon any of the Trustees or
shareholders individually, but are binding only upon the assets and property of
the Fund.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the date
first written above.
FIRST DATA INVESTOR SERVICES GROUP, INC.
By: /s/ Michael Kardok
----------------------------------
Name: Michael Kardok
--------------------------------
Title: Vice President
-------------------------------
MML SERIES INVESTMENT FUND, on behalf of
MML EQUITY INDEX FUND
By: /s/ Stuart H. Reese
----------------------------------
Name: Stuart H. Reese
--------------------------------
Title: President
-------------------------------
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY
By: /s/ Hamline C. Wilson
----------------------------------
Name: Hamline C. Wilson
--------------------------------
Title: Senior Managing Director
-------------------------------
9
<PAGE>
SCHEDULE A
----------
FEE SCHEDULE
For the services to be rendered, the facilities to be furnished and the payments
to be made by FDISG, as provided in this Agreement, MassMutual, on behalf of the
Fund, will pay FDISG on the first business day of each month a fee for the
previous month as set forth below.
First $100 million in net assets .10%
$100 - $250 million in net assets .075%
$250 - $500 million in net assets .05%
$500 - $1 billion in net assets .025%
Net assets in excess of $1 billion .01%
Minimum Fee for the Fund:
Year 1 $65,000
Year 2 $75,000
Thereafter $85,000
FDISG reserves the right to renegotiate the fees set forth on this Schedule A
and in Section 4 of the Agreement should the actual services vary materially
from the assumptions provided.
10
<PAGE>
SCHEDULE B
----------
Out-of-Pocket Expenses
Out-of-pocket expenses include, but are not limited to, the following:
- Overnight delivery and courier service
- Telephone and telecommunications charges (including fax)
- Pricing vendor services at $0.05 per equity quote (which amount
may not be changed without the prior written consent of the
Company)
- Terminals, transmitting lines and any expenses incurred in
connection with such lines
- Travel to and from Board Meetings outside the city of Boston,
Massachusetts (subject to prior approval from the Company)
- Custom programming requests at a rate of $100 per hour
- Duplicating charges with respect to filings with federal and
state authorities and Board meeting materials (when applicable)
- Forms and supplies for the preparation of Board meeting and other
materials for the Company or the Fund
- Any other unusual expenses in association with the operation of
the Company, such as excessive duplicating charges
11
<PAGE>
SCHEDULE C
----------
List of Services
Accounting Services:
- --------------------
. Portfolio and general ledger accounting
. Daily pricing of all securities
. Daily valuation and NAV calculation
. Comparison of NAV to market movement
. Review of price tolerance/fluctuation report
. Research items appearing on the price exception report
. Preparation of monthly ex-dividend monitor
. Daily cash reconciliation with the custodian bank
. Daily updating of price information to MassMutual
. Daily support and report delivery to Portfolio Management
. Daily calculation of Fund advisor fees and waivers
. Daily maintenance of the Fund's general ledger including expense
accruals
. Preparation of month-end reconciliation package
. Monthly reconciliation of Fund expense records
Financial Administration Services:
- ----------------------------------
. Compliance testing
. Providing shareholder tax information
. Producing drafts of IRS and state tax returns
. Expense accrual monitoring
. Determination of dividends
. Prepare semi-annual/annual reports to shareholders
. Coordinate audit process with independent accountants
. Provide SEC standard performance information
. Coordinate with all aspects of the printing and mailing process
with MassMutual for all shareholder publications
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF MML EQUITY INDEX FUND (THE "FUND") FOR THE PERIOD ENDED
AUGUST 31, 1997, AS SET FORTH IN THE FUND'S STATEMENT OR ADDITIONAL INFORMATION
DATED OCTOBER 22, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000067160
<NAME> MML EQUITY INDEX FUND
<S> <C>
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> MAY-01-1997
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 20,113,101
<INVESTMENTS-AT-VALUE> 22,543,992
<RECEIVABLES> 39,664
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22,583,656
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 41,539
<TOTAL-LIABILITIES> 41,539
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 19,991,395
<SHARES-COMMON-STOCK> 2,001,143
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 100,493
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (673)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,430,891
<NET-ASSETS> 22,542,117
<DIVIDEND-INCOME> 137,328
<INTEREST-INCOME> 11,040
<OTHER-INCOME> 0
<EXPENSES-NET> 47,874
<NET-INVESTMENT-INCOME> 100,493
<REALIZED-GAINS-CURRENT> (673)
<APPREC-INCREASE-CURRENT> 2,430,891
<NET-CHANGE-FROM-OPS> 2,530,711
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,001,143
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 22,542,117
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 29,505
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 18,369
<AVERAGE-NET-ASSETS> 22,509,127
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 1.21
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.26
<EXPENSE-RATIO> .21
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
