<PAGE>
SCHEDULE 14A
Information Required in Proxy Statement
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
MML Series Investment Fund
- ---------------------------
(Name of Registrant as Specified In Its Charter)
- ---------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
- ---------------------------------------------------------------------------
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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<PAGE>
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
To Be Held April 2, 1999
and
PROXY STATEMENT
for
MML SERIES INVESTMENT FUND
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Your vote is very important. Please date, complete, and sign the
enclosed Proxy Instruction Forms and mail them in the enclosed return
envelope which requires no postage if mailed in the United States.
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<PAGE>
MML SERIES INVESTMENT FUND
1295 State Street
Springfield, Massachusetts 01111
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
To be Held April 2, 1999
To the Shareholders:
A Special Meeting of Shareholders of MML Series Investment Fund (the
"Trust") will be held at the office of the Trust, 1295 State Street,
Springfield, Massachusetts, at 9:30 a.m., Springfield time, on April 2, 1999 for
the following purposes:
1. To elect Richard Ayers, David E. A. Carson, Richard W. Greene, Beverly L.
Hamilton and F. William Marshall, Jr. as Trustees for indefinite terms of
office;
2. To approve amendments to the Investment Management Agreements to require
the Trust to assume certain expenses currently being paid by Massachusetts
Mutual Life Insurance Company, as investment manager;
3. To approve changes in the fundamental investment policies of the Trust to
permit MML Managed Bond Fund and MML Blend Fund to engage in dollar roll
transactions;
4. To approve changes in the fundamental investment policies of the Trust to
permit MML Managed Bond Fund, MML Blend Fund, MML Equity Fund and MML
Equity Index Fund to engage in the lending of portfolio securities with
respect to not more than 33% of the total assets of each such Fund; and
5. To transact such other business as may properly come before the meeting, or
any adjournments thereof.
Only shareholders of record at the close of business on February 1, 1999 are
entitled to notice of and to vote at the Special shareholders Meeting and any
adjournments thereof. Massachusetts Mutual Life Insurance Company
("MassMutual"), MML Bay State Life Insurance Company ("MML Bay State") and C.M.
Life Insurance Company ("C.M. Life") own of record all of the outstanding shares
of the Trust. However, the owners of variable life insurance policies and
variable annuity contracts that depend on the investment performance of certain
separate accounts of MassMutual, MML Bay State and C.M. Life have the right to
instruct MassMutual, MML Bay State and C.M. Life how to vote on the proposals
listed above. Please indicate your voting instructions on the enclosed Proxy
Instruction Form and date, sign and return it in the accompanying postage-paid
envelope. To avoid unnecessary duplicate mailings, we ask your cooperation in
promptly mailing your proxy no matter how large or small your holdings may be.
The Board of Trustees of the Trust recommends a vote in favor of each nominee to
the Board and in favor of each Proposal. WE URGE YOU TO MARK, SIGN, DATE AND
MAIL THE ENCLOSED PROXY INSTRUCTION FORM PROMPTLY.
By Order of the Board of Trustees,
/s/ STEPHEN L. KUHN
STEPHEN L. KUHN
Vice President and Secretary
Springfield, Massachusetts
February 17, 1999
1
<PAGE>
PROXY STATEMENT
General Information
The enclosed proxy is solicited by and on behalf of the Board of Trustees of
MML Series Investment Fund (the "Trust") in connection with a Special Meeting
of Shareholders to be held at 1295 State Street, Springfield, Massachusetts, at
9:30 a.m. on April 2, 1999 (the "Special Meeting") for the purposes described
below. The cost of preparing and mailing this Proxy Statement, the Notice of
Special Meeting, the Proxy Instruction Forms and any additional material which
may hereafter be furnished in connection with the solicitation of proxies will
be paid by Massachusetts Mutual Life Insurance Company ("MassMutual") pursuant
to the terms of its Investment Management Agreements with the Trust on behalf of
MML Money Market Fund ("MML Money Market"), MML Managed Bond Fund ("MML
Managed Bond"), MML Blend Fund ("MML Blend"), MML Equity Fund ("MML
Equity"), MML Equity Index Fund ("MML Index"), and MML Small Cap Value Equity
Fund ("MML Small Cap") (the six series of the Trust, hereinafter referred to
collectively as the "Funds").
This Proxy Statement and the enclosed Proxy Instruction Forms were first sent
to shareholders and variable contract holders entitled to instruct shareholders
how to vote on or about February 17, 1999. A shareholder or contract holder
giving the proxy has the power to revoke it at any time before it is exercised.
A proxy may be revoked only by the Trust's receipt of a signed and dated written
notice of revocation, by filing a duly executed Proxy Instruction Form bearing a
later date, or by attending the Special Meeting and voting in person.
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<PAGE>
The Special Meeting will be held for the following purposes:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
Proposal Shareholders Solicited
- -------------------------------------------------------------------------
<C> <S>
(1) To elect Richard H. Ayers, David E. A. All shareholders
Carson, Richard W. Greene, Beverly L.
Hamilton and F. William Marshall, Jr. as
Trustees for indefinite terms of office;
(2) To approve an amendment to the Investment All shareholders
Management Agreement for each Fund,
requiring the Trust to assume certain
expenses currently being paid by
MassMutual, as investment manager;
(3) To approve changes in the fundamental Shareholders of MML Managed
investment policies of the Trust to permit Bond Fund and MML Blend Fund
MML Managed Bond Fund and MML Blend Fund
to engage in dollar roll transactions; and
(4) To approve changes in the fundamental Shareholders of MML Managed
investment policies of the Trust to permit Bond Fund, MML Blend Fund,
MML Managed Bond Fund, MML Blend Fund, MML MML Equity Fund, and MML
Equity Fund and MML Equity Index Fund to Equity Index Fund
engage in the lending of portfolio
securities with respect to not more than
33% of the total assets of each such Fund.
- -------------------------------------------------------------------------
</TABLE>
4
<PAGE>
To be entitled to notice of and to vote at the Special Meeting, a shareholder
must have owned shares of the Trust as of the close of business on February 1,
1999 (the "Record Date"). Shareholders entitled to vote shall have one vote
for each share of the Trust owned and a proportionate fractional vote for each
fractional share owned. Proxy Instruction Forms are enclosed for this purpose.
On the Record Date, there were 396,846,983.516 votes eligible to be cast at this
meeting, attributable to each Fund as follows:
MML Equity Fund: 78,610,799.431 shares
MML Money Market Fund: 175,006,601.790 shares
MML Managed Bond Fund: 20,704,468.645 shares
MML Blend Fund: 118,822,538.751 shares
MML Equity Index Fund: 2,404,946.791 shares
MML Small Cap Value Equity Fund: 1,297,628.106 shares
MassMutual, MML Bay State Life Insurance Company ("MML Bay State") and C.M.
Life Insurance Company ("C.M. Life") own of record all of the outstanding shares
of the Trust. However, the owners of variable life insurance policies
(hereinafter referred to as "Variable Life Shareholders") and variable annuity
contracts (hereinafter referred to as "Variable Annuity Shareholders")/1/ that
depend upon the investment performance of the following separate accounts will
have the right to instruct MassMutual, MML Bay State and C.M. Life as to how
shares of the Trust deemed attributable to their contracts on February 1, 1999
shall be voted:
MassMutual Variable Annuity Funds 1 and 2;
MassMutual Variable Annuity Separate Accounts 1, 2 and 3;
MassMutual Variable Life Separate Accounts I and II;
MassMutual Separate Account C;
MML Bay State Variable Life Separate Accounts I, II, III, IV
and V;
MML Bay State Variable Annuity Separate Account 1; and
C.M. Life Variable Life Separate Account I.
Proxy Instruction Forms are enclosed for this purpose. VARIABLE LIFE
SHAREHOLDERS AND VARIABLE ANNUITY SHAREHOLDERS ENTITLED TO INSTRUCT HOW SHARES
OF THE FUNDS ARE VOTED ARE NOT EXPECTED TO ATTEND THE SPECIAL MEETING.
- ------------------------
/1/ The votes attributable to Variable Annuity Shareholders shall be referred
to as "Variable Annuity Votes" and the votes attributable to the Variable Life
Shareholders shall be referred to as "Variable Life Votes".
5
<PAGE>
Quorum and Vote Required
With respect to Proposal 1, the Trust's Agreement and Declaration of Trust
(the "Declaration of Trust") provides that a plurality of all shares voted is
required to elect Trustees. With respect to Proposals 2, 3 and 4, shares will be
voted separately by Fund. The holders of shares are entitled to one vote for
each share (and a fractional vote for a fractional share) held at the close of
business on the Record Date. Under the Declaration of Trust, 30% of the shares
of the Trust entitled to vote, present in person or represented by proxy,
constitutes a quorum for the transaction of business with respect to Proposal 1.
The five nominees for election as Trustees at the Special Meeting who receive
the greatest number of votes properly cast for the election of trustees shall be
elected.
Proposals 2, 3 and 4 were approved and recommended for shareholder approval by
the Trust's Board of Trustees ("Board of Trustees") on the condition that a
Proposal will not be presented at the Special Meeting for a vote unless
MassMutual, MML Bay State and C.M. Life have received instructions to vote a
majority of the Variable Annuity Votes and a majority of the Variable Life Votes
in the same way. For example, if the instructions to vote by one group of
shareholders is FOR but the other is AGAINST, the Proposal will not be presented
at the Meeting and the Trust will proceed as if the Proposal had never been
made.
Each Fund votes separately on the fundamental policies of the Trust and
investment management agreements that relate to that Fund. For that reason, each
of the Funds votes separately on Proposal 2; MML Managed Bond Fund and MML Blend
Fund vote separately on Proposal 3; and MML Managed Bond Fund, MML Blend Fund,
MML Equity Fund, and MML Equity Index Fund vote separately on Proposal 4.
Pursuant to the Declaration of Trust, 30% of the shares of a Fund entitled to
vote, either present in person or represented by proxy, shall constitute a
quorum for the transaction of business by that Fund. A majority/2/ of the shares
of each Fund shall decide the questions posed by Proposals 2, 3 and 4.
Votes cast by proxy or in person at the Special Meeting will be counted by
persons appointed by the Trust to act as election inspectors for
- -----------------------------
/2/ As used in this Proxy Statement "majority vote" means the affirmative vote
of at least 67% of the voting shares of a Fund present at the Special Meeting
(provided that more than 50% of the outstanding voting shares of the Fund are
present or represented by proxy at the Special Meeting) or more than 50% of the
outstanding voting shares of the Fund, whichever is less.
6
<PAGE>
the Special Meeting. The election inspectors will count the total number of
votes cast "for" approval of the Proposals for purposes of determining whether
sufficient affirmative votes have been cast. The election inspectors will count
shares represented by proxies that "withhold authority" to vote for a nominee
for election as a Trustee (or that reflect abstentions) as shares that are
present and entitled to vote on the matter for purposes of determining the
presence of a quorum. With respect to Proposal 1, an abstention from voting has
no effect on the outcome of the vote or Proposal. With respect to Proposals 2, 3
and 4, withholding a vote or an abstention from voting has the effect of a
negative vote.
MassMutual, MML Bay State and C.M. Life will vote shares on a Proposal for
which they have not received instructions from Variable Life Shareholders or
Variable Annuity Shareholders in proportion to those votes for which
instructions were received by MassMutual, MML Bay State and C.M. Life from
Variable Life Shareholders or Variable Annuity Shareholders, respectively. If a
shareholder executes and returns a proxy but fails to indicate how the votes
should be cast, the proxy will be voted in favor of each Proposal.
A copy of the Trust's Annual Report for the fiscal year ended December 31,
1998 is available without charge upon request and may be obtained by calling
1-800-767-1000, ext. 8480 or by writing the Trust at the address on page 2
hereof.
The Trust was established by MassMutual for the purpose of providing a vehicle
for the investment of assets of various separate accounts of MassMutual and its
life insurance subsidiaries, including MML Bay State and C.M. Life. Shares of
the Funds are offered solely to separate accounts established by MassMutual and
its life insurance company subsidiaries.
PricewaterhouseCoopers LLP has been appointed by the Board of Trustees as the
Trust's independent account for the fiscal year ending December 31, 1998.
Representatives from PricewaterhouseCoopers LLP are not expected to be present
at the Special Shareholders Meeting and therefore will not be available to
answer questions.
PROPOSAL (1)
ELECTION OF TRUSTEES
The Board of Trustees is currently comprised of the following seven Trustees:
Gary E. Wendlandt (Chairman), Ronald J. Abdow, Mary E. Boland, Richard G.
Dooley, F. William Marshall, Jr., Charles J. McCarthy,
7
<PAGE>
and John H. Southworth. Richard H. Ayers, David E. A. Carson, Richard W. Greene
and Beverly L. Hamilton have been nominated to stand for election at the Special
Meeting. Mr. Marshall was appointed as a Trustee by the Board of Trustees
effective as of February 9, 1996. He also has been nominated for election as a
Trustee by the shareholders.
All nominees have consented to serve as Trustees of the Trust, if elected. If
any of the nominees for Trustees should for any reason become unavailable as a
candidate at the meeting, which is not now anticipated, votes pursuant to the
enclosed proxy will be cast for a substitute candidate in the discretion of
those persons named in the enclosed Proxy Instruction Forms. Pursuant to the
Trust's Declaration of Trust, a nominee elected by shareholders will serve as a
Trustee until he or she dies, resigns or is removed.
Nominees for election by shareholders, Trustees whose re-election is not being
sought, and the executive officers of the Trust, together with their ages and a
brief description of their principal occupations during the past five years,
directorships in public companies, and their terms on the Board are set forth
below.
Name, Age and Position Principal Occupation During Past Five Years
with the Trust and Other Principal Business Affiliations
- --------------------------------------------------------------------------------
Gary E. Wendlandt*
Chief Investment Officer (since 1993) and
Age 48, Chairman, Chief Executive Vice President, MassMutual;
Executive Officer and Chairman (since 1995), President (1983-1995)
Trustee of the Trust and Trustee, MassMutual Corporate Investors
(closed-end investment company); Chairman
(since 1995), President (1988-1995) and
Trustee, MassMutual Participation Investors
(closed-end investment company); Chairman
(since 1996), Antares Capital Corporation
(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);
- ----------------------------
* Trustee who is an "interested person" of the Trust within the definition set
forth in Section 2(a)(19) of the Investment Company Act of 1940, as amended.
8
<PAGE>
Name, Age and Position Principal Occupation During Past Five Years
with the Trust and Other Principal Business Affiliations
- --------------------------------------------------------------------------------
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);
Director, Oppenheimer Acquisition Corporation
(holding company for investment advisers);
Supervisory Director, MassMutual/Carlson CBO
N.V. (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 and
Chief Executive Officer (since 1994),
MassMutual Institutional Funds (open-end
investment company).
Ronald J. Abdow President, Abdow Corporation (operator of
Age 67, Trustee of the restaurants); General Partner, Grove
Trust 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).
9
<PAGE>
Name, Age and Position Principal Occupation During Past Five Years
with the Trust and Other Principal Business Affiliations
- --------------------------------------------------------------------------------
Mary E. Boland Attorney at Law, Egan, Flanagan and Cohen,
Age 60, Trustee of the P.C. (law firm), Springfield, MA; Director
Trust (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* Consultant (since 1993), Executive Vice
Age 69, Vice Chairman President and Chief Investment Officer
and Trustee of the Trust (1978-1993), MassMutual; Director (since
1996), Investment Technology Group, Inc.;
Director, The Advest Group, Inc. (financial
services holding company), HSB Group Inc.
(formerly known as 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); 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); Trustee
(since 1996), MassMutual Institutional Funds
(open-end investment company).
F. William Marshall, Jr. Chairman, SIS/Family F.S.B. (formerly SIS Bank)
Age 57, Trustee of the (since 1999), President, Chief Executive Officer
Trust and Nominee for and Director (1993-1999), SIS Bancorp, Inc. and
Trustee SIS Bank (formerly,
- ------------------------------
* Trustee who is an "interested person" of the Trust within the definition set
forth in Section 2(a)(19) of the Investment Company Act of 1940, as amended.
10
<PAGE>
Name, Age and Position Principal Occupation During Past Five Years
with the Trust and Other Principal Business Affiliations
- --------------------------------------------------------------------------------
Springfield Institution for Savings); Director,
(since 1999), Peoples Heritage Financial Group;
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).
Richard H. Ayers Retired; former adviser to Chairman (1997),
Age 56, Advisory Board Chairman and Chief Executive Officer
Member, Nominee for (1989-1996) and Director (1985-1996), The
Trustee Stanley Works (manufacturer of tools,
hardware and specialty hardware products);
Director, Southern New England
Telecommunications Corp. and Perkin-Elmer
Corp.; Trustee (since 1996), MassMutual
Institutional Funds (open-end investment
company).
David E. A. Carson Chairman and Chief Executive Officer (since
Age 64, Advisory Board 1997), President and Chief Executive Officer
Member, Nominee for (1985-1997), People's Bank; Director, United
Trustee Illuminating Co. (electric utility); Trustee,
American Skandia Trust (open-end investment
company); Trustee (since 1996), MassMutual
Institutional Funds (open-end investment
company).
Richard W. Greene Executive Vice President and Treasurer (since
Age 63, Advisory Board 1986), University of Rochester (private
Member, Nominee for university); Trustee (since 1996), MassMutual
Trustee Institutional Funds (open-end investment
company).
11
<PAGE>
Name, Age and Position Principal Occupation During Past Five Years
with the Trust and Other Principal Business Affiliations
- --------------------------------------------------------------------------------
Beverly L. Hamilton President, ARCO Investment Management Co.;
Age 52, Advisory Board Director, Connecticut Natural Gas; Director,
Member, Nominee for Emerging Markets Growth Fund (closed-end
Trustee investment company); Director (since 1997),
United Asset Management Corp. (investment
management); Trustee (since 1996), MassMutual
Institutional Funds (open-end investment
company).
Charles J. McCarthy Proprietor, Synectics Financial Company
Age 75, Trustee of the (venture capital activities, business
Trust consulting and investments); Trustee (since
1994), MassMutual Institutional Funds
(open-end investment company).
John H. Southworth Chairman (since 1993), Southworth Company
Age 71, Trustee of the (manufacturer of paper and calendars);
Trust Director (since 1995), Trustee (until 1995),
SIS Bank (formerly, Springfield Institution
for Savings); Trustee (since 1994),
MassMutual Institutional Funds (open-end
investment company).
Stuart H. Reese Chief Executive Director (since 1997),
Age 44, President of the Executive Director (1996-1997), Senior Vice
Trust President (1993-1996), MassMutual; President
(since 1995), Executive Vice President
(1993-1995), MassMutual Corporate Investors
and MassMutual Participation Investors
(closed-end investment companies); Director
(since 1996), Antares Capital Corporation
(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 II LLC), and
MMHC Investment Inc. (investor in funds
sponsored by MassMutual); Director (since
12
<PAGE>
Name, Age and Position Principal Occupation During Past Five Years
with the Trust and Other Principal Business Affiliations
- --------------------------------------------------------------------------------
1994), MassMutual Corporate Value Parthers
Limited (investor in debt and equity securities)
and MassMutual Corporate Value Limited
(parent of MassMutual Corporate Value
Partners Limited); President (since 1997),
MassMutual/Darby CBO IM Inc. (manager of
MassMutual/Darby CBO LLC, a high yield bond
fund); Director (1994-1996), Pace Industries
(aluminum die caster); Advisory Board Member
(since 1995), Kirtland Capital Partners;
Chairman and President (1990-1993), Aetna
Financial Services, Inc.; President (since
1995), MassMutual Institutional Funds
(open-end investment company).
Mary Wilson Kibbe Executive Director (since 1997), Senior
Age 45, Senior Vice Managing Director (1996-1997), Vice President
President of the Trust and Managing Director (1991-1996),
MassMutual; Senior Vice President (since
1996), HYP Management, Inc. (managing member
of MassMutual High Yield Partners II LLC) and
MMHC Investment, Inc. (investor in funds
sponsored by MassMutual); Vice President,
MassMutual Participation Investors and
MassMutual Corporate Investors (closed-end
investment companies); Vice President
(1991-1995), Oppenheimer Investment Grade
Bond Fund (open-end investment company).
Charles C. McCobb, Jr. Managing Director (since 1997), MassMutual;
Age 55, Vice President Managing Director and Vice President
of the Trust (1994-1997), Citicorp, Inc. (banking);
Managing Director (1985-1994), Aetna Life &
Casualty (insurance company); Vice President
and Chief Financial Officer (since 1998),
Vice President (1996-1998), MassMutual
Corporate Investors, MassMutual Participation
Investors (closed-end
13
<PAGE>
Name, Age and Position Principal Occupation During Past Five Years
with the Trust and Other Principal Business Affiliations
- --------------------------------------------------------------------------------
investment companies), MMCI Subsidiary Trust and MMPI
Subsidiary Trust (subsidiaries of MassMutual
corporate Investors and MassMutual Participation
Investors, respectively); Vice President and Chief
Financial Officer (since 1998), HYP Management, Inc.
(managing member of MassMutual High Yield Partners II
LLC).
Stephen L. Kuhn Vice President and Deputy General Counsel
Age 52, Vice President (since 1998); Vice President and Associate
and Secretary of the General Counsel (1992-1998), MassMutual; Vice
Trust President and Secretary, MassMutual
Participation Investors and MassMutual
Corporate Investors (closed-end investment
companies); Assistant Secretary (since 1996),
Antares Capital Corporation (finance
company); Chief Legal Officer and Assistant
Secretary (since 1995), DLB Acquisition
Corporation (holding company for investment
advisers); Assistant Secretary, Oppenheimer
Acquisition Corporation (holding company for
investment advisers); Vice President and
Secretary, MassMutual Institutional Funds
(open-end investment company).
Judith A. Martini Second Vice President (since 1996),
Age 50, Vice President MassMutual; Marketing Manager (1984-1996),
of the Trust Connecticut Mutual Life Insurance Company
(life insurance company).
Mark B. Ackerman Investment Director (since 1996), Associate
Age 33, Treasurer of the Director (1993-1996), MassMutual; Treasurer
Trust (since 1998), Controller (1997-1998),
Associate Treasurer (1995-1997), MassMutual
Participation Investors and
14
<PAGE>
Name, Age and Position Principal Occupation During Past Five Years
with the Trust and Other Principal Business Affiliations
- ------------------------------------------------------------------------------
MassMutual Corporate Investors (closed-end
investment companies); Treasurer (since
1998), Comptroller (1997-1998), Associate
Treasurer (1995-1996), MassMutual
Institutional Funds (open-end investment
company); Vice President, HYP Management
Inc. (since 1998) (managing member of
MassMutual High Yield Partners II LLC);
Comptroller (since 1998) MMCI Subsidiary
Trust and MMPI Subsidiary Trust
(subsidiaries of MassMutual Corporate
Investors and MassMutual Participation
Investors, respectively).
Board and Committee Meetings
The Board of Trustees had four regularly scheduled meetings in 1998. The Trust
has no standing nominating or compensation committees, nor any committees
performing similar functions.
The Trust has an Audit Committee, consisting of Trustees who are not
"interested persons'' (as defined in the Investment Company Act of 1940) of the
Trust. The Audit Committee, whose members are Messrs. McCarthy and Southworth,
makes recommendations to the Trustees as to the engagement or discharge of the
Trust's independent auditors, supervises investigations into matters relating to
audit functions, reviews with the Trust's independent auditors the results of
the audit engagement, and considers the audit fees. In 1998, the Audit Committee
met once and all members of the committee were present.
Each Trustee attended 100% of the aggregate number of all meetings of the
Board of Trustees, with the exception of Mr. Dooley, who attended 75% of such
meetings.
Compensation
The Trust, on behalf of each Fund, pays each member of its Board of Trustees
who is not an "interested person" of the Trust or MassMutual a
15
<PAGE>
$2,000 fee for each calendar quarter and a $2,000 fee for each meeting of the
Board of Trustees attended by such Trustee. Such Trustees who are members of the
Audit Committee, are paid an additional $1,000 per year. In addition, the Trust
reimburses out-of-pocket business travel expenses to such Trustees. Trustees and
officers of the Trust who are "interested persons" of the Trust or MassMutual
are not entitled to any fee for their services to the Trust.
The following table discloses the compensation paid to the Trust's non-
interested Trustees and for the Advisory Board members for the fiscal year ended
December 31, 1998. The Trust has no pension, retirement, or deferred
compensation plans. All of the non-interested Trustees also serve as Trustees of
one other investment company managed by MassMutual.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Aggregate
Compensation Total Compensation
Name of Person and Position from Trust Trust and Fund Complex
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Ronald J. Abdow, Trustee $16,000 $32,000
- --------------------------------------------------------------------------------------------
Mary E. Boland, Trustee $16,000 $32,000
- --------------------------------------------------------------------------------------------
F. William Marshall, Trustee $16,000 $32,000
- --------------------------------------------------------------------------------------------
Charles J. McCarthy, Trustee; $17,000 $34,000
Member, Audit Committee
- --------------------------------------------------------------------------------------------
John H. Southworth, Trustee; $17,000 $34,000
Member, Audit Committee
- --------------------------------------------------------------------------------------------
Richard H. Ayers, Member, $16,000 $32,000
Advisory Board
- --------------------------------------------------------------------------------------------
David E. A. Carson, Member, $16,000 $32,000
Advisory Board
- --------------------------------------------------------------------------------------------
Richard W. Greene, Member, $16,000 $32,000
Advisory Board
- --------------------------------------------------------------------------------------------
Beverly L. Hamilton, Member, $16,000 $32,000
Advisory Board
- --------------------------------------------------------------------------------------------
</TABLE>
Mr. Dooley and Mr. Wendlandt are "interested persons" of the Trust and
MassMutual. If any of the nominees for Trustee should for any reason become
unavailable as a candidate at the meeting, which is not now anticipated, votes
pursuant to the enclosed proxy will be cast for a substitute candidate in the
discretion of MassMutual, MML Bay State or C.M. Life.
16
<PAGE>
Related Information
MassMutual
Listed below are the names and principal occupations of the Directors of
MassMutual and of MassMutual's principal executive officer, all of whose
addresses are the same as that of MassMutual.
<TABLE>
<CAPTION>
Position with MassMutual and Principal
Name Occupation
- ---------------------------------------------------------------------------
<S> <C>
Roger G. Ackerman Director of MassMutual; Chairman and Chief Executive
Officer, Corning Incorporated (manufacturer of
specialty materials, communication equipment, and
consumer products)
- --------------------------------------------------------------------------------
James R. Birle Director of MassMutual; Founding Chairman of Resolute
Partners, Inc.
- --------------------------------------------------------------------------------
Gene Chao Director of MassMutual; President and Chief Executive
Officer, Computer Projections, Inc.
- --------------------------------------------------------------------------------
Patricia D. Dennis Director of MassMutual; Senior Vice President and
Assistant General Counsel, SBC Communications, Inc.
(telecommunications)
- --------------------------------------------------------------------------------
Anthony Downs Director of MassMutual; Senior Fellow, Brookings
Institution (non-profit policy research center)
- --------------------------------------------------------------------------------
James L. Dunlap Director of MassMutual; Retired (since 1998); Former
President and Chief Operating Officer, Ocean Energy,
Inc. (oil exploration).
- --------------------------------------------------------------------------------
William B. Ellis Director of MassMutual; Senior Fellow at Yale
University
- --------------------------------------------------------------------------------
Robert M. Furek Director of MassMutual; Partner (since 1997) Resolute
Partners, LLC (private merchant bank)
- --------------------------------------------------------------------------------
Charles K. Gifford Director of MassMutual; Chairman and Chief Executive
Officer of Bank of Boston Corporation; Chief
Executive Officer of The First National Bank of Boston
- --------------------------------------------------------------------------------
William N. Griggs Director of MassMutual; Managing Director, Griggs &
Santow, Inc. (business consultants)
- --------------------------------------------------------------------------------
George B. Harvey Director of MassMutual; Retired, (since 1996); Former
Chairman, President and Chief Executive Officer,
Pitney Bowes, Inc. (office machines manufacturer)
- --------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
- --------------------------------------------------------------------------------
Position with MassMutual an Principal
Name Occupation
- --------------------------------------------------------------------------------
Barbara Barnes Director of MassMutual; Director, The Great Atlantic
Hauptfuhrer and Pacific Tea Company, Inc. (operator of retail
food stores), Knight-Ridder, Inc. (publisher of daily
newspapers and operator of cable television and
business information systems), Raytheon Company
(manufacturer of electronic equipment), Alco Standard
Corp. (diversified manufacturer and distributor)
- --------------------------------------------------------------------------------
Sheldon B. Lubar Director of MassMutual; Chairman, Lubar & Co.,
Incorporated (investment management and advisory
company)
- --------------------------------------------------------------------------------
William B. Marx, Jr. Director of MassMutual; Retired (since 1996); Former
Senior Executive Vice President, Lucent Technologies,
Inc. (public telecommunications systems and software)
- --------------------------------------------------------------------------------
John F. Maypole Director of MassMutual; Managing Partner of Peach
State Real Estate Holding Company (real estate
investment company)
- --------------------------------------------------------------------------------
Robert J. O'Connell Director and Chief Executive Officer of MassMutual
- --------------------------------------------------------------------------------
Thomas B. Wheeler Chairman and Director of MassMutual
- --------------------------------------------------------------------------------
Alfred M. Zeien Director of MassMutual; Chairman and Chief Executive
Officer, The Gillette Company (manufacturer of
personal care products)
- --------------------------------------------------------------------------------
The Board of Trustees recommends a vote for the election of each nominee.
PROPOSAL (2)
TO APPROVE AN AMENDMENT TO THE INVESTMENT MANAGEMENT AGREEMENT FOR EACH FUND,
REQUIRING THE FUNDS TO ASSUME CERTAIN EXPENSES CURRENTLY BEING PAID BY
MASSMUTUAL, AS INVESTMENT MANAGER
Description of Investment Management Agreements
MassMutual is the investment manager of the Funds and is located at 1295 State
Street, Springfield, Massachusetts, and is a Massachusetts corporation.
MassMutual currently has six Investment
18
<PAGE>
Management Agreements with the Trust, on behalf of each of the six Funds (the
"Management Agreements"), and all are substantially identical (except for
fees). All six Management Agreements were last approved, in person, by the Board
of Trustees, including a majority of those members of the Board who are not
parties to the Management Agreements or "interested persons" as defined in the
Investment Company Act of 1940 (the "1940 Act") of any such party (the
"Independent Trustees"), at a meeting called for the purpose of voting on such
approval on February 1, 1999.
On February 1, 1999, a majority of the Independent Trustees and a majority of
the entire Board of Trustees met in person and approved, subject to the required
shareholder approval described herein, the proposed amendment to the Management
Agreements. See Exhibit A, Proposal 2, for the text of the amendment to the
Management Agreements.
If the amendment is approved by a vote of the holders of a majority of the
outstanding shares of the Trust (as defined in the 1940 Act) the Management
Agreements will be amended to require the Funds to bear their own expenses,
provided however, that MassMutual will bear the cost of investment advisory
services, fund accounting and other administrative service expenses, and
distribution expenses. The Management Agreements, as amended, will be effective
as of May 3, 1999, and will continue in effect for a period of two years and
from year-to-year thereafter unless otherwise terminated in accordance with
their respective terms.
Under the terms of the current Management Agreements, MassMutual acts as
investment adviser and manager to each of the Funds subject to such general or
specific instructions as may be given by the Board of Trustees. The Management
Agreements provide that MassMutual will perform all administrative functions
relating to the Funds and will bear all expenses of the Funds except: (1) taxes
and corporate fees payable to government agencies; (2) brokerage commissions
(which may be higher than other brokers charge if paid to a broker which
provides brokerage and research services to MassMutual, David L. Babson and
Company, Inc., and Mellon Equity Associates, L.L.P. (collectively, the
"Advisers") or for use in providing investment advice and management to the
Funds and other accounts over which the Advisers exercise investment discretion)
and other capital items payable
19
<PAGE>
in connection with the purchase or sale of Fund investments; (3) interest on
account of any borrowings by the Funds; (4) fees and expenses of Trustees of the
Trust who are not interested persons, as defined in the 1940 Act, of the
Advisers or the Trust; and (5) fees of the Funds' independent certified public
accountants.
For providing the services and bearing the expenses described above for MML
Equity Fund, MML Money Market Fund, MML Managed Bond Fund and MML Blend Fund,
MassMutual is paid a quarterly fee at the annual rate of .50% of the first $100
million of the average daily net asset value of each Fund, .45% of the next $200
million, .40% of the next $200 million and .35% of any excess over $500 million.
For MML Small Cap Value Fund, MassMutual is paid a quarterly fee at the annual
rate of .65% of the first $100 million of the average daily net asset value of
each Fund, .60% of the next $200 million, .55% of the next $200 million and .50%
of any excess over $500 million. For the MML Index Equity Fund, MassMutual is
paid a quarterly fee at the annual rate of .40% of the first $100 million of the
average daily net assets, .38% of the next $150 million and .36% of any net
assets thereafter. MassMutual has unilaterally agreed to bear expenses of each
Fund (with the exception of MML Equity Index) (other than the management fee,
interest, taxes, brokerage commissions and extraordinary expenses) in excess of
.11% of average daily net asset value through April 30, 2000. In 1998, MML
Equity Fund, MML Money Market Fund, MML Managed Bond Fund, MML Blend Fund, MML
Small Cap Value Equity Fund and MML Equity Index Fund paid fees to MassMutual
amounting to .37%, .46%; .45%, .37%, .39% and .40%, respectively, of their
average daily net assets during the year. The aggregate management fees paid by
the Funds to MassMutual in 1998 was $22,356,185.
Each Management 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, 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 MassMutual or of the Trust; or (2) upon its assignment. Under the terms of
each Management Agreement, each Fund recognizes MassMutual's control of the
initials "MML" and each Fund agrees that its right to use these initials is
non-exclusive and can be terminated by MassMutual at any time. Under each
Management Agreement, MassMutual's liability
20
<PAGE>
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.
Brokerage commissions paid by the Trust in 1998 to Jefferies & Co., Inc.
("Jefferies") were $6,776, which was .40% of the Trust's total brokerage
commissions. Brokerage commissions paid by the Trust in 1998 to Advest Inc. were
$3,192, which was .19% of the Trust's total brokerage commissions. Jefferies and
Advest Inc. are wholly-owned subsidiaries of a company for which one Trustee
serves as a director.
Description of Proposed Amendment
The amendment to the Management Agreements provides that the Trust would bear
all of its expenses not expressly specified therein as being borne by
MassMutual, whereas under the current Management Agreements, MassMutual bears
all expenses not expressly specified as being borne by the Trust. By requiring
the Trust to bear expenses previously borne by MassMutual, MassMutual's
remuneration would be effectively increased. Under the current Management
Agreements, the Trust bears: (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 Funds; (4) fees and expenses of Trustees of MML
Trust who are not interested persons, as defined in the 1940 Act, of the
Advisers or the Trust; and (5) fees of the Funds' independent certified public
accountants. The amended Management Agreements provide that the Trust or the
Funds will bear its owns expenses, with the following exceptions: MassMutual
agrees to bear the cost of investment advisory services, fund accounting and
administrative expenses, and distribution expenses. With respect to MML Equity
Index, the sub-adviser to that Fund pays the custodial fees. The sub-adviser is
paid a fee for its services pursuant to its sub-advisory agreement with
MassMutual, but the Fund is not charged any additional fees for custody.
The principal change in expenses would be that the Trust would bear its
own custodial fees, legal fees and expenses, and expenses of producing
shareholder reports. The cost to the Trust is estimated at approximately
$106,156 for the first 12 months that the amended Management Agreements are in
force. This cost would be allocated to the Funds in accordance with
-21-
<PAGE>
the Trust's normal allocation procedures. If approved by the shareholders, the
amended Management Agreements would result in relatively small increases in
expense ratios, as set forth in the table below.
The amended Management Agreements will, unless sooner terminated in accordance
with the agreement, continue in effect for a period of two years from their
effective date and thereafter on an annual basis with respect to each of the
Funds, provided such continuance is approved at least annually, as set forth
above.
The Trust paid to MassMutual aggregate management fees of $22,356,185 in 1998.
In turn, MassMutual paid $106,156 for custodial fees, legal fees and expenses,
and expenses of producing shareholder reports. Net of these costs, MassMutual
received $22,250,029 from the Trust. If the amended Management Agreements had
been in effect MassMutual would have received $22,356,185 in aggregate
management fees from the Trust, without any deductions, representing a .47%
increase in remuneration received from the Trust.
The following table shows for the fiscal year ended December 31, 1998: (a) the
actual operating expenses for the Funds as a percentage of average net assets,
and (b) the pro forma operating expenses assuming the proposed amendment had
been in effect throughout the fiscal year. The table and examples below should
not be considered to be a representation of past or future expenses of the
Funds. These tables do not reflect any separate account expenses. Actual
expenses may vary from year to year and may be higher or lower than those shown
below:
22
<PAGE>
<TABLE>
<CAPTION>
As of 12/31/98
MML MML MML MML
MML Money Managed MML Small Equity
Equity Market Bond Blend Cap Index
<S> <C> <C> <C> <C> <C> <C>
Annual Fund
Operating Expenses
% of average
daily net assets 0.0023% 0.0326% 0.0253% 0.0029% 0.5458% 0.1980%
Management
Fees 0.3672% 0.4563% 0.4525% 0.3672% 0.6715% 0.3996%
Other Expenses -- -- -- -- -0.4358%* -0.1011%**
Total 0.3694% 0.4889% 0.4779% 0.3700% 0.7815% 0.4965%
(w/ reimbursement)
0.5976%
(w/o reimbursement)
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
*MassMutual has agreed to bear the Fund's expenses (other than the management
fee, interest, taxes, brokerage commissions and extraordinary expenses) in
excess of .11% of the average daily net asset value through April 30, 2000.
**MassMutual agreed to bear the Fund's expenses (other than the management fee,
interest, taxes, brokerage commissions and extraordinary expenses) in excess of
.11% of the average daily net asset value through April 30, 1998.
<TABLE>
<CAPTION>
Pro Forma (as of 12/31/98)
MML MML MML MML
MML Money Managed MML Small Equity
Equity Market Bond Blend Cap Index
<S> <C> <C> <C> <C> <C> <C>
Annual Fund
Operating Expenses
% of average
daily net assets 0.0039% 0.0380% 0.0287% 0.0042% 0.6179% 0.1992%
Management
Fees 0.3672% 0.4563% 0.4525% 0.3672% 0.6715% 0.3996%
Other Expenses -0.5079% -0.1011%
Total 0.3710% 0.4942% 0.4812% 0.3714% 0.7815%*** 0.4976%
(w/ reimbursement)
0.5987%
(w/o reimbursement)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
***This expense ratio would not change because MassMutual has agreed to bear
certain of the Fund's expenses in excess of .11% of average daily net asset
value through April 30, 2000, as described above.
23
<PAGE>
EXAMPLES. These examples are intended to help you compare the cost of investing
in the Trust with the cost of investing in other mutual funds. The examples
assume that you invest $10,000 in the shares of the Funds for the time periods
indicated, that your investment earns a 5% return each year and that each Fund's
operating expenses remain the same provided, however, that the table entries
designated as "proposed" reflect the Trust's assumption of certain expenses, as
described herein. This table does not reflect any separate account expenses.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
MML MML MML MML
MML Money Managed MML Small Equity
Equity Market Bond Blend Cap* Index
<S> <C> <C> <C> <C> <C> <C>
1 Year $ 38.79 $ 51.33 $ 50.18 $ 38.85 $ 82.06 $ 62.75
Present Cost
1 Year $ 38.96 $ 51.89 $ 50.53 $ 39.00 $ 82.06 $ 62.87
Proposed Cost
3 Years $121.82 $161.00 $157.40 $122.02 $256.61 $196.59
Present Cost
3 Years $122.35 $162.76 $158.51 $122.47 $256.62 $196.97
Proposed Cost
5 Years $212.68 $280.74 $274.49 $213.03 $446.07 $342.39
Present Cost
5 Years $213.60 $283.78 $276.41 $213.82 $446.07 $343.05
Proposed Cost
10 Years $479.14 $630.37 $616.53 $479.92 $993.49 $766.48
Present Cost
10 Years $481.19 $637.11 $620.77 $481.68 $993.49 $767.92
Proposed Cost
- --------------------------------------------------------------------------------
</TABLE>
* MassMutual has unilaterally agreed to bear expenses of each Fund (with the
exception of MML Equity Index) (other than the management fee, interest, taxes,
brokerage commissions and extraordinary expenses) in excess of .11% of average
daily net asset value through April 30, 2000. MML Small Cap is the only Fund
whose expenses exceeded .11% in 1998 to which this agreement applied.
Since the Funds do not impose any shareholder fees, the figures shown would
be the same whether you sold your shares at the end of a period or kept them.
The following table shows on a comparative basis for the fiscal year ended
December 31, 1998 the Trust's aggregate expenses pursuant to the current
24
<PAGE>
Management Agreements and on a pro forma basis under the proposed amended
Management Agreements. Actual expenses under both the current Management
Agreements and the amended Management Agreements are calculated daily based on
the net assets of each Fund's portfolio.
<TABLE>
<CAPTION>
MML MML MML MML
MML Money Managed MML Small Equity
Equity Market Bond Blend Cap Index
<S> <C> <C> <C> <C> <C> <C>
Actual Expenses $ 38.79 $ 51.33 $ 50.18 $ 38.85 $ 82.06 $ 62.75
Pro Forma Expenses $ 38.96 $ 51.89 $ 50.53 $ 39.00 $ 82.06 $ 62.87
Difference $ 0.17 $ 0.56 $ 0.35 $ 0.15 -- $ 0.12
% of actual 0.4383% 1.0910% 0.6975% 0.3861% 0.00% 0.1940%
- --------------------------------------------------------------------------------
</TABLE>
Management Fee Schedules of other MassMutual Funds with Similar Investment
Objectives
The Trust is required under applicable regulations of the Securities and
Exchange Commission to provide the management fee schedules of other mutual
funds managed by MassMutual that have investment objectives similar to those of
the Funds. Accordingly, this information is provided in the following table,
notwithstanding MassMutual's belief that the management fee schedules of these
mutual funds may not be comparable to those of the Funds. MassMutual has not
waived, reduced or otherwise agreed to reduce its management fees for the Funds
listed below:
<TABLE>
<CAPTION>
- -------------------------------------------------- ------------ ----------------
Net Assets as of
Fee 12/31/98
MassMutual Institutional Funds Schedule (Unaudited)
- -------------------------------------------------- ------------ ----------------
<S> <C> <C>
MassMutual Core Equity Fund (similar to
MML Equity Fund) 0.45% $3,587,158,882
- -------------------------------------------------- ------------ ----------------
MassMutual Core Bond Fund (similar to
MML Managed Bond Fund) 0.45% $710,000,858
- -------------------------------------------------- ------------ ----------------
MassMutual Balanced Fund (similar to
MML Blend) 0.45% $772,991,619
- -------------------------------------------------- ------------ ----------------
MassMutual Small Cap Value Fund (similar to
MML Small Cap) 0.45% $683,319,785
- -------------------------------------------------- ------------ ----------------
MassMutual Prime Fund (similar to
MML Money Fund)/3/ 0.45% $252,432,493
- -------------------------------------------------- ------------ ----------------
</TABLE>
/3/ MassMutual Prime Fund is not a money market fund as defined in Rule 2a-7
under the of 1940 Act but has a similar investment objective.
25
<PAGE>
Factors considered by the Trustees
The Trustees, including the Independent Trustees, considered various matters
in determining the reasonableness and fairness of the proposed amendments to the
Management Agreements requiring the Funds to assume certain expenses previously
borne by MassMutual as investment manager to the Funds. The Trustees requested
and evaluated information provided by MassMutual which, in its opinion,
constituted all the information reasonably necessary for the Trustees to form a
judgment as to whether the amended Management Agreements would be in the best
interests of MML Equity, MML Managed Bond, MML Money Market, MML Blend, MML
Small Cap and MML Equity Index (the "Funds").
In reaching their decision to approve and recommend that shareholders approve
the amended Management Agreements, the Trustees evaluated the information and
documentation provided by MassMutual and considered such factors as they deemed
appropriate. These factors included, among others: (1) the advisory fees and
other expenses that would be paid by the Funds under the amended Management
Agreements as compared to those of similar portfolios managed by other
investment advisers; (2) the nature, quality and extent of the portfolio
management and non-advisory services furnished by MassMutual to the Funds; (3)
MassMutual's need to maintain and enhance its ability to retain and attract
capable personnel to serve the Funds; (4) the fact that, with respect to
portfolio management services, the amended Management Agreements would, except
as described herein, have terms and conditions substantially similar to those of
the current Management Agreements; (5) the relationship of the proposed advisory
fee structure to the fee structures of comparable mutual funds and the impact of
the proposed amendments on each Fund's expense ratio; (6) the performance of the
Funds; and (7) the increased cost and complexity of providing portfolio
management services.
The Trustees considered that the shareholders of all Funds would be subject
under the amended Management Agreements to an immediate increase in the level of
expenses paid by the Trust. In considering this amendment, the Trustees placed
primary emphasis upon the nature and quality of the services being provided on
behalf of these Funds by MassMutual, taking into account the relative complexity
of managing the Funds. The Trustees believe that the amendment to the Management
Agreements will, over the long term, enable MassMutual to continue to provide
high-quality investment advisory services to the Funds at reasonable fee rates
and the expense structure will allow MassMutual to provide portfolio management
and non-advisory services to the Funds at
26
<PAGE>
levels consistent with the increased demands of today's investment advisory
marketplace.
With respect to the services to be provided on behalf of each Fund, the
Trustees determined that the compensation to be paid to MassMutual under the
amended Management Agreements is fair and reasonable, and the amended Management
Agreements will allow MassMutual to receive fees for its services that are
competitive with fees paid by other mutual funds to other investment
managers.
The Board of Trustees recommends that shareholders vote in favor of the proposed
amendment to the Management Agreements with respect to each of the Funds.
Investment Proposals
Proposals 3 and 4 would provide certain of the Funds with the authority to
engage in certain investment transactions and techniques ("Investment
Proposals"). These Proposals, if approved by shareholders, would change the
Trust's fundamental investment policies with respect to certain of the Funds. An
investment policy that has been designated as "fundamental" is one that cannot
be changed without the requisite shareholder approval described above in
"Quorum and Vote Required." Non-fundamental investment policies may be changed
by the Board of Trustees without the expense and delay of seeking shareholder
approval. If approved by shareholders, these Proposals would provide the
affected Funds with added flexibility to operate in an increasingly competitive
and dynamic environment. If approved, the Investment Proposals will take effect
as soon as possible after any remaining legal prerequisites to implementation of
the Proposals have been satisfied. If a proposed change in an investment
restriction is not approved for a Fund, that Fund's current investment
restriction will remain unchanged.
PROPOSAL (3)
TO APPROVE CHANGES IN THE FUNDAMENTAL INVESTMENT POLICIES OF THE TRUST
APPLICABLE TO MML MANAGED BOND FUND AND MML BLEND FUND TO ENGAGE IN DOLLAR ROLL
TRANSACTIONS
Currently MML Managed Bond Fund and MML Blend Fund may not engage in "dollar
roll" transactions. The Board of Trustees has concluded it is appropriate to
update its fundamental investment restrictions to reflect changing market
conditions. If Proposal 3 is presented to and approved by
27
<PAGE>
Shareholders at the Special Meeting, the Trust's Prospectus and Statement of
Additional Information will be revised as set forth in Exhibit A, Proposal 3.
To take advantage of attractive financing opportunities in the mortgage market
and to enhance current income, the Trustees have concluded that MML Managed Bond
and MML Blend Fund should be allowed to engage in dollar roll transactions. A
dollar roll transaction involves a sale by a Fund of a GNMA certificate or other
mortgage-backed securities to a financial institution, such as a bank or a
broker-dealer, concurrent with an agreement by the Fund to repurchase a similar
security from the institution at a later date at an agreed-upon price. The
securities that are repurchased will bear the same interest rate as those sold,
but generally will be collateralized by different pools of mortgages with
different prepayment histories than those sold. During the period between the
sale and repurchase, the Fund will not be entitled to receive the interest and
principal payments on the securities sold. Proceeds of the sale will be invested
in additional instruments for the Fund. A Fund is compensated for agreeing to
repurchase the security by the difference between the current sales price and
the price for the future purchase (often referred to as the "drop") as well as
by the interest earned on the cash proceeds of the initial sale. Dollar rolls
may be renewed over a period of several months with a different repurchaser and
repurchase price and a cash settlement made at each renewal without physical
delivery of securities. Moreover, a Fund may enter into a dollar roll
transaction involving a security not then in the Fund's portfolio so long as the
transaction is preceded by a firm commitment agreement pursuant to which the
Fund has agreed to buy the securities on a future date.
The Funds will not use such transactions for leveraging purposes and,
accordingly, will segregate cash or other liquid securities in an amount
sufficient to meet their obligations under the roll transactions. Dollar roll
transactions involve potential risks of loss which are different from those
related to the securities underlying the transaction. For example, if the
counterparty were to become insolvent, the Fund's right to purchase from the
counterparty may be restricted. Additionally, the market value of the
securities sold by the Fund may decline below the repurchase price of those
securities to be purchased.
Dollar roll transactions are borrowings, and therefore would be subject to the
investment restriction set forth in the prospectus relating to MML Equity, MML
Money Market, MML Managed Bond and MML Blend, which states that each of these
Funds will not borrow money,
28
<PAGE>
except from banks as a temporary measure for extraordinary or emergency purposes
(but not for the purpose of making investments), and except to the extent that
each Fund engages in financial futures transactions (as described in the
Prospectus) and in reverse repurchase agreements (as described in the Statement
of Additional Information), provided (a) that the aggregate amount of all such
borrowings at the time of borrowing does not exceed 10% of the total assets of
the Fund taken at cost, and (b) that immediately after the borrowing, and at all
times thereafter, there will be an asset coverage of at least 300% for all of
the Fund's borrowings (including all obligations under financial futures
contracts on debt obligations). If Proposal 3 is approved, dollar roll
transactions will be permitted forms of borrowing for the Funds but subject to
the limits set forth in (a) and (b) above.
The Board of Trustees of the Trust recommends the shareholders approve Proposal
3 to permit MML Managed Bond Fund and MML Blend Fund to engage in dollar roll
transactions.
PROPOSAL (4)
TO APPROVE CHANGES IN THE FUNDAMENTAL INVESTMENT POLICIES OF THE TRUST
APPLICABLE TO MML MANAGED BOND FUND, MML BLEND FUND, MML EQUITY FUND AND MML
EQUITY INDEX FUND TO ALLOW SUCH FUNDS TO ENGAGE IN THE LENDING OF PORTFOLIO
SECURITIES WITH RESPECT TO NOT MORE THAN 33% OF EACH SUCH FUND'S TOTAL ASSETS.
The Board of Trustees has approved, and recommends that shareholders approve,
amendments to the fundamental investment restrictions of the Trust applicable to
MML Managed Bond Fund, MML Blend Fund, MML Equity Fund and MML Equity Index Fund
to increase the ability of these Funds to engage in lending portfolio
securities. The text of the amended investment restriction is set forth in
Exhibit A, Proposal 4. If Proposal 4 is presented to and approved by
shareholders at the Special Meeting, the Trust's Prospectuses and Statements of
Additional Information will be revised as set forth in Exhibit A, Proposal 4.
As described in the Trust's Prospectuses and Statements of Additional
Information relating to these Funds, MML Equity Fund, MML Money Market Fund, MML
Managed Bond Fund, MML Blend Fund and MML Equity Index may seek additional
income by making loans of portfolio securities of not more than 10% of their
respective total assets taken at current value. The proposed new fundamental
investment policy would
29
<PAGE>
allow MML Managed Bond, MML Blend, MML Equity and MML Equity Index to make loans
of their portfolio securities of up to 33% of their respective total assets
taken at current value. This revised investment policy would remain a
fundamental investment policy that could only be changed by the vote of a
"majority" (as defined in the 1940 Act) of the outstanding voting securities of
a Fund.
Securities lending transactions involve the loan of securities by a lender
(such as one of the Funds) from its portfolio to brokers, dealers and other
financial institutions desiring to borrow securities to complete certain
transactions. The lender retains most of the rights of ownership including
interest, dividends or other distributions payable on the loan securities which
afford the lender an opportunity to earn interest on the amount of the loan and
income on the loan securities' collateral. The lender does not retain voting
rights on the loaned securities. Although lending portfolio securities may
involve the risk of delay in recovery of the securities loans or possible loss
of right in the collateral should the borrower fail financially, loans will be
made only to borrowers deemed by MassMutual to be in good standing.
Under applicable regulatory requirements and securities lending agreements
(which are subject to change), the loan collateral received by a Fund when it
lends portfolio securities must, on each business day, be at least equal to the
value of the loan securities. Cash collateral received by a Fund will be
reinvested by the Fund's securities lending agent in high quality, short-term
instruments, including bank obligations, U.S. government securities, repurchase
agreements, money market funds and U.S. dollar denominated corporate instruments
with an effective maturity of one-year or less, including variable rate and
floating rate securities, insurance company funding agreements and asset-backed
securities. All investments of cash collateral by a Fund are for the account and
risk of such Fund.
The Board of Trustees of the Trust recommends the shareholders approve Proposal
4 to permit MML Managed Bond Fund, MML Blend Fund, MML Equity Fund and MML
Equity Index Fund to engage in the lending of portfolio securities with respect
to not more than 33% of the total assets of each of such Fund.
OTHER MATTERS AND DISCRETION OF SHAREHOLDERS
While the meeting has been called to act upon any other business that may
properly come before it, at the date of this Proxy Statement the only
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business which management intends to present or knows that others will present
is the business set forth in the Notice of Meeting. If other matters lawfully
come before the meeting, and on all procedural matters at said meeting, it is
the intention that the proxies that do not include specific restrictions to the
contrary will be voted on, shall be voted in accordance with the best judgment
of MassMutual, MML Bay State or C.M. Life.
The Trust does not hold shareholder meetings annually. Shareholders wishing to
submit proposals for consideration for inclusion in a proxy statement for the
next shareholder meeting should send their written proposals to MML Series
Investment Fund, 1295 State Street, Springfield, Massachusetts 01111-0001, c/o
the Corporate Secretary.
You are requested to mark, date, sign and return the enclosed proxy promptly.
No postage is required on the enclosed envelope.
By Order of the Board of Directors
/s/ Stephen L. Kuhn
Stephen L. Kuhn
Vice President and Secretary
Springfield, Massachusetts
February 17, 1999
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VOTING INSTRUCTION CARD
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
MML BAY STATE LIFE INSURANCE COMPANY
C.M. LIFE INSURANCE COMPANY
VOTING INSTRUCTIONS FOR THE SPECIAL MEETING OF SHAREHOLDERS OF MML SERIES
INVESTMENT FUND TO BE HELD ON APRIL 2, 1999
MML _______ FUND (The "Fund")
This Instruction Card is solicited by the following insurance companies:
Massachusetts Mutual Life Insurance Company, MML Bay State Life Insurance
Company and C.M. Life Insurance Company (collectively, the "Insurance
Companies"), each of which has issued certain variable annuity contracts and/or
variable life insurance policies, from owners of such variable annuity contracts
and/or variable life insurance policies who have specified that a portion of
their investment be allocated to this Fund of the MML Series Investment Fund
(the "Trust").
The undersigned contract/policy owner hereby instructs that the votes
attributable to the undersigned's interest with respect to the above-referenced
Fund be cast as directed on the reverse side at the Special Meeting of the
Shareholders of the Trust on April 2, 1999 at 9:30 a.m. Springfield time. The
undersigned, by completing this form, does hereby authorize the Insurance
Companies to exercise their discretion in voting upon such other business as may
properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
Please mark your proxy, date and sign it, and return it promptly in the
accompanying envelope, which requires no postage if mailed in the United States.
NOTE: PLEASE SIGN EXACTLY AS YOU NAME(S) APPEAR HEREON. When signing as
custodian, attorney, executor, administrator, trustee, etc., please give your
full title as such. All joint owners should sign this proxy. If the account is
registered in the name of a corporation, partnership or other entity, a duly
authorized individual must sign on its behalf and give title.
Signature of Policyowner: ____________________ Date: ________ 1999
<PAGE>
PLEASE REFER TO THE PROXY STATEMENT FOR A DISCUSSION OF EACH OF THE PROPOSALS
SET FORTH BELOW.
For each Proposal, indicate your vote by marking one of the boxes under the name
of the Funds in which you own shares. THE BOARD OF TRUSTEES RECOMMENDS A VOTE
FOR EACH OF THE FOLLOWING:
(1) FOR EACH FUND: To elect Richard Ayers, David E.A. Carson, Richard W. Greene,
Beverly L. Hamilton and F. William Marshall, Jr. as Trustees for indefinite
terms of office (Proposal Number 1);
FOR ALL _________________ WITHHOLD _________________
To withhold authority for an individual nominee, write that nominee's name on
the line below:
________________________________________________________
(2) FOR EACH FUND: To approve amendments to the Investment Management Agreements
to require the Funds to assume certain expenses currently paid by
Massachusetts Mutual Life Insurance Company, as investment manager (Proposal
Number 2);
FOR ________ AGAINST __________ ABSTAIN___________
(3) FOR MML MANAGED BOND FUND AND MML BLEND FUND ONLY: To approve changes in the
fundamental investment policies of the Trust to permit MML Managed Bond Fund
and MML Blend Fund to engage in dollar roll transactions (Proposal Number
3);
FOR ________ AGAINST __________ ABSTAIN___________
(4) FOR MML MANAGED BOND, MML BLEND FUND, MML EQUITY FUND AND MML EQUITY INDEX
FUND ONLY: To approve changes in the fundamental investment policies of the
Trust to permit MML Managed Bond Fund, MML Blend Fund, MML Equity Fund and
MML Equity Index Fund to engage in the lending of portfolio securities with
respect to not more than 33% of the total assets of each such Fund (Proposal
Number 4);
FOR ________ AGAINST __________ ABSTAIN___________
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EXHIBIT A
Proposal 2. The proposed amendment to the current Investment Management
Agreements would be accomplished by deleting the first paragraph of Section 3 of
the agreements and inserting the following in substitution therefore:
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. The Trust (or the
Fund) shall bear its own expenses, with the following exceptions: the Adviser
shall bear the cost of investment advisory services, fund accounting and other
administrative expenses, and distribution expenses.
Section 10 of the Management Agreements would also be amended by deleting the
first sentence thereof and inserting the following in substitution therefore:
This Agreement is effective as of May 3, 1999 and will continue in effect
for two years from the date hereof, and from year-to-year thereafter 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, as amended) 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 shares of the Fund (as defined in the Investment Company
Act of 1940, as amended); (2) this Agreement shall immediately terminate in
the event of its assignment (within the meaning of the Investment Company
Act of 1940, as amended); 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.
Proposal 3. If adopted by shareholders, the Trust's investment practices as set
forth in the Prospectus relating to MML Equity, MML Money
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Market Fund, MML Managed Bond and MML Blend, would be amended by inserting a new
paragraph in Section V entitled "Investment Practices of the Funds and Related
Risks" after paragraph "E. Cash Positions", as follows:
F. Dollar Roll Transactions
To take advantage of attractive financing opportunities in the mortgage
market and to enhance current income, MML Managed Bond and MML Blend Fund
may engage in dollar roll transactions. A dollar roll transaction involves
a sale by a Fund of a GNMA certificate or other mortgage-backed securities
to a financial institution, such as a bank or a broker-dealer, currently
with an agreement by a Fund to repurchase a similar security from the
institution at a later date at an agreed-upon price. The securities that
are repurchased will bear the same interest rate as those sold, but
generally will be collateralized by different pools of mortgages with
different prepayment histories than those sold. Dollar roll transactions
involve potential risks of loss which are different from those related to
the securities underlying the transaction. For a more detailed description
of dollar roll transactions, see the SAI.
The Statement of Additional Information (the "SAI") relating to MML Money
Market, MML Equity, MML Managed Bond and MML Blend would also be amended by
inserting a new paragraph after paragraph "13. Trading Activity" in the
section entitled "D. Other Investment Practices", as follows:
14. Dollar Roll Transactions - To take advantage of attractive financing
opportunities in the mortgage market and to enhance current income, MML
Managed Bond and MML Blend may engage in dollar roll transactions. A dollar
roll transaction involves a sale by a Fund of a GNMA certificate or other
mortgage-backed securities to a financial institution, such as a bank or a
broker-dealer, concurrent with an agreement by a Fund to repurchase a
similar security from the institution at a later date at an agreed-upon
price. The securities that are repurchased will bear the same interest rate
as those sold, but generally will be collateralized by different pools of
mortgages with different prepayment histories than those sold. Dollar roll
transactions involve potential risks of loss which are different from those
related to the securities underlying the
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transaction. The securities that are repurchased will bear the same
interest rate as those sold, but generally will be collateralized by
different pools of mortgages with different prepayment histories than those
sold. During the period between the sale and repurchase, the Fund will not
be entitled to receive the interest and principal payments on the
securities sold. Proceeds of the sale will be invested in additional
instruments for the Fund. A Fund is compensated for agreeing to repurchase
the security by the difference between the current sales price and the
price for the future purchase (often referred to as the "drop") as well as
by the interest earned on the cash proceeds of the initial sale. Dollar
rolls may be renewed over a period of several months with a different
repurchaser and repurchase price and a cash settlement made at each renewal
without physical delivery of securities. Moreover, a Fund may enter into a
dollar roll transaction involving a security not then in the Fund's
portfolio so long as the transaction is preceded by a firm commitment
agreement pursuant to which the Fund has agreed to buy the securities on a
future date.
The Funds will not use such transactions for leveraging purposes and,
accordingly, will segregate cash or other liquid securities in an amount
sufficient to meet its obligations under the roll transactions. Dollar roll
transactions involve potential risks of loss which are different from those
related to the securities underlying the transaction. For example, if the
counterparty were to become insolvent, the Fund's right to purchase from
the counterparty may be restricted. Additionally, the market value of the
securities sold by the Fund may decline below the repurchase price of those
securities to be purchased.
Proposal 4. If adopted by shareholders, the Trust's investment practices as set
forth in the Prospectus relating to MML Equity, MML Money Market, MML Managed
Bond and MML Blend, would be amended by deleting paragraph "D. Securities
Lending" in Section V entitled "Investment Practices of the Funds and Related
Risks" and replacing it with the following paragraph:
D. SECURITIES LENDING
MML Managed Bond, MML Blend and MML Equity may seek additional income by
making loans of portfolio securities of not more than 33% of their
respective total assets taken at current value. Although lending portfolio
securities may involve the risk
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of delay in recovery of the securities loaned or possible loss of rights in
the collateral should the borrower fail financially, loans will be made
only to borrowers deemed by MassMutual and Babson to be of good standing.
Investment Restriction number 13, set forth in the Statement of Additional
Information (SAI) relating to MML Money Market, MML Equity, MML Managed Bond and
MML Blend will also be amended by replacing clause (iii) thereof. Clause (iii)
states that MML Managed Bond and MML Blend may make loans through the lending of
portfolio securities with respect to not more than 10% of the total assets of
each such Fund taken at current value. This clause would be replaced with the
following:
(iii) in the case of MML Managed Bond and MML Blend, through the lending of
portfolio securities with respect to not more than 33% of the total assets
of each such Fund taken at current value.
The Trust's investment techniques as set forth in the Appendix to the Prospectus
relating the MML Equity Index Fund would be amended by replacing the third
sentence in the paragraph entitled "Lending Portfolio Securities" with the
following sentence:
Loans of portfolio securities may not exceed 33% 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.
MML Equity Index Fund's fundamental investment restrictions, set forth in part
III of the Statement of Additional Information relating to that Fund would also
be amended. Currently, investment restriction number 10 states the MML Equity
Index Fund may lend portfolio securities with respect to not more than 10% of
the total assets of the Fund taken at current value. The first phrase of this
sentence would be amended as follows:
However, the Fund may lend portfolio securities with respect to not more
than 33% of the total assets of the Fund taken at current value; or
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