<PAGE> 1
SUPPLEMENT TO PROSPECTUS FOR MANULIFE FINANCIAL VARIABLE ANNUITY
(ISSUED BY SEPARATE ACCOUNT TWO OF THE MANUFACTURERS LIFE INSURANCE
COMPANY OF AMERICA) DATED MAY 1, 1996 AS AMENDED AUGUST 14, 1996
AND SUPPLEMENT TO PROSPECTUS FOR MANULIFE SERIES FUND, INC. DATED
AUGUST 14, 1996
This Supplement updates certain information in the Prospectuses named
above. Please read it and keep it with your Prospectuses for future
reference.
On September 27, 1996, at a meeting of the Board of Directors of
Manulife Series Fund, Inc. (the "Fund"), the Board voted to approve a
reorganization (the "Reorganization") of the Fund that will combine
each of the nine portfolios of the Fund with a newly created or
existing portfolio of NASL Series Trust (the "Trust"), an open end
management investment company advised by NASL Financial Services, Inc.
("NASL Financial"), the ultimate parent of which is The Manufacturers
Life Insurance Company ("Manulife"). Manulife is also the ultimate
parent of the Fund's current investment adviser, Manufacturers Adviser
Corporation. The Reorganization is scheduled to take effect December
31, 1996.
The Reorganization will be effected by transferring all of the assets and
liabilities of a Fund portfolio to the corresponding portfolio of the Trust
in exchange for shares of such corresponding Trust portfolio. As a result of
the Reorganization, each shareholder of a Fund portfolio will receive that
number of shares of the corresponding Trust portfolio equal in value at the
time of the exchange to the value of such shareholder's shares of the Fund
portfolio on such date. However, because the per share value of the two Money
Market portfolios will differ, shareholders of the Fund Money-Market
portfolio will, after completion of the Reorganization, own a different
number of shares of the Trust Money Market portfolio, even though the value
of their shares will not have changed.
The table below identifies the specific Trust portfolio into which each Fund
portfolio will reorganize as well as the adviser, subadviser, and advisory
fees and other expenses for the Trust portfolio. NASL Financial is the
adviser to each Trust portfolio although each portfolio will have a
subadviser as noted below. The Money-Market Portfolio of the Fund will
reorganize into the Trust Money Market Portfolio, an existing series of the
Trust which has substantially similar investment objectives to the Fund
Money-Market Portfolio. The Common Stock, Pacific Rim Emerging Markets, Real
Estate Securities, Capital Growth Bond and Equity Index Portfolios of the
Fund will reorganize into newly organized series of the Trust created for the
purpose of operating as successors to the corresponding Fund portfolio. The
investment objectives of these Fund portfolios will remain substantially the
same and Manufacturers Adviser Corporation ("MAC") will manage the
corresponding portfolios in a subadviser capacity. The International,
Emerging Growth Equity and Balanced Assets portfolios will reorganize into
newly organized portfolios of the Trust that will be subadvised by an adviser
other than MAC with objectives that are similar but not identical to those of
the corresponding Fund portfolio.
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<TABLE>
<CAPTION>
Total Fund
Fund Portfolio Newly Organized Trust Portfolio Trust Portfolio Advisory Other Operating
Trust Portfolio Adviser SubAdviser Fee Expenses*** Expenses
<S> <C> <C> <C> <C> <C> <C>
Money-Market Fund Money Market Trust NASL Financial Manufacturers 0.50% 0.04% 0.54%
Adviser Corporation
International Fund International Stock NASL Financial Rowe Price - 1.05% 0.20% 1.25%
Trust Fleming
International, Inc.
Emerging Growth Emerging Growth NASL Financial Warburg, Pincus 1.05% 0.10% 1.15%
Equity Fund Trust Counsellors, Inc.
Balanced Assets Fund Balanced Trust NASL Financial Founders Asset 0.80% 0.15% 0.95%
Management, Inc.
Common Stock Fund Common Stock Trust NASL Financial Manufacturers 0.44%** 0.06% 0.50%**
Adviser Corporation
Pacific Rim Pacific Rim NASL Financial Manufacturers 0.85% 0.30% 1.15%
Emerging Markets Emerging Markets Adviser Corporation
Fund Trust
Real Estate Real Estate NASL Financial Manufacturers 0.40%** 0.10% 0.50%**
Securities Fund Securities Trust Adviser Corporation
Capital Growth Bond Capital Growth Bond NASL Financial Manufacturers 0.40%** 0.10% 0.50%**
Fund Trust Adviser Corporation
Equity Index Fund Equity Index Trust NASL Financial Manufacturers 0.25% 0.15% 0.40%
Adviser Corporation
</TABLE>
The Reorganization is subject to the approval of the shareholders of each
Fund portfolio and a shareholders meeting is scheduled to be held December
20, 1996 regarding this matter. Therefore, shareholders of record of the
Fund on October 23, 1996 will receive notice of this meeting as well as a
proxy statement which will explain in more detail the terms of the
Reorganization.
**"Total Fund Operating Expenses" reflect the agreement by NASL Financial
voluntarily to waive fees payable to it and/or reimburse expenses for a
period of one year following the consummation of the Reorganization to the
extent necessary to prevent "Total Fund Operating Expenses" for each
indicated NASL portfolio for such period from exceeding .50% of average net
assets. "Advisory Fees" for each indicated NASL portfolio reflect estimated
fee waivers by NASL Financial pursuant to such agreement; absent such
waivers, "Advisory Fees" would be .70%, .70% and .65% for the NASL Common
Stock Trust, NASL Real Estate Securities Trust and NASL Capital Growth Bond
Trust, respectively.
***"Other Expenses" include custody fees, registration fees, legal fees, audit
fees, trustees' fees, insurance fees and other miscellaneous expenses. The
amounts in the table above are expense estimates for the first year based on
historical NASL new portfolio cash inflows. NASL Financial has agreed to
reduce its advisory fee or reimburse the Trust to the extent expenses
(excluding taxes, portfolio brokerage, commissions, interest, litigation and
indemnification expenses and other extraordinary expenses not incurred in the
ordinary course of business) exceed 0.75% for the International Stock Trust
and Pacific Rim Emerging Markets Trust, 0.15% for the Equity Index Trust, and
0.50% in the case of the other portfolios of the Trust of the average annual
net assets of such Trust portfolio.
The last four sentences of the third paragraph of the Capital Growth Bond Fund
disclosure on page 12 of the prospectus are replaced with the following:
"Government obligations in which the Capital Growth Bond Fund may invest
include those of foreign governments provided they are denominated in U.S.
dollars. The Fund may purchase other securities issued by non U.S. issuers if
denominated in U.S. dollars and issued pursuant to U.S. federal securities
regulations. The Fund may also purchase securities on a forward-commitment,
when-issued or delayed-delivery basis. For a discussion of these securities,
please see the Statement of Additional Information."
The Date of this Supplement is October 1, 1996.
