<PAGE>
As Filed with the Securities and Exchange Commission on October 16, 1998
Registration No. 33-__________________.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
INITIAL REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
A. Exact name of Trust: Massachusetts Mutual Variable Life Separate
Account I
B. Name of Depositor: Massachusetts Mutual Life Insurance Company
C. Complete address of 1295 State Street
Depositor's principal Springfield, MA 01111
executive offices:
D. Name and address of Ann Lomeli
Agent for Service Corporate Secretary
of Process: 1295 State Street
Springfield, MA 01111
It is proposed that this filing will become effective (check appropriate
box)
_________ immediately upon filing pursuant to paragraph (b)
of Rule 485.
_________ on _______________ pursuant to paragraph (b) of
Rule 485.
_________ 60 days after filing pursuant to paragraph (a)(1)
of Rule 485
_________ on ________________ pursuant to paragraph (a)(1)
of Rule 485.
_________ this post effective amendment designates a new
effective date for a previously filed post
effective amendment.
E. Title of Securities being registered: Flexible Premium Variable Adjustable
Life Insurance Policies
F. Approximate date of proposed public offering: As soon as practicable after
the effective date of this Registration Statement.
1
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CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
1 Cover Page; The Separate Account
2 Cover Page; The Separate Account
3 Investments of the Separate Account
4 Sales and Other Agreements
5 The Separate Account
6 The Separate Account
7 Not Applicable
8 Not Applicable
9 Legal Proceedings
10 Cover Page; Withdrawals; Termination;
Premiums; Death Benefits Under the Policy;
Free Look Provision; Account Value; Policy
Loan Privilege; The Separate Account;
Charges Under the Policy; Sales and Other
Agreements; When We Pay Proceeds; Payment
Options; Our Rights; Your Voting Rights;
General Provisions of the Policy
11 The Separate Account
12 The Separate Account; Sales and Other
Agreements
13 The Separate Account; Charges Under the
Policy
14 Premiums; The Separate Account; Sales and
Other Agreements
15 Premiums; The Separate Account
16 The Separate Account; Investment Return
17 Account Value; The Separate Account; Cash
Surrender Value; Withdrawals; Payment
Options
18 The Separate Account
2
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
20 Not Applicable
21 Policy Loan Privilege
22 Not Applicable
23 Bonding Arrangement
24 Limits on Our Right to Challenge the
Policy; Suicide Exclusion; Misstatement of
Age or Gender; Assignment; Beneficiary; Our
Rights; The Separate Account
25 Cover Page
26 Not Applicable
27 Cover Page; The Separate Account
28 Directors of MassMutual
29 Not Applicable
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Cover Page
36 Not Applicable
37 Not Applicable
38 Sales and Other Agreements
39 Sales and Other Agreements
3
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CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
40 Sales and Other Agreements
41 Sales and Other Agreements
42 Not Applicable
43 Sales and Other Agreements
44 The Separate Account; Investment Return;
Charges for Federal Income Tax; Account
Value
45 Not Applicable
46 The Separate Account; Investment Return;
Cash Surrender Value
47 The Separate Account
48 The Separate Account
49 Not Applicable
50 The Separate Account
51 Cover Page; Underwriting; Availability;
Beneficiary; Reinstatement; Premiums
52 The Separate Account; Our Rights
53 Federal Income Tax Considerations
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Financial Statements
4
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Massachusetts Mutual Life Insurance Company
Flexible Premium Variable Adjustable Life Insurance
Subject to Completion.
Filed on__________________________
This prospectus describes a flexible premium variable adjustable life insurance
policy offered by Massachusetts Mutual Life Insurance Company ("MassMutual").
The policy provides lifetime insurance protection for as long as it remains in
force.
You, the policyowner, may allocate the net premium for Your policy among several
investment options. These investment options include a Guaranteed Principal
Account ("GPA") and thirty Separate Account Divisions of a segment of
Massachusetts Mutual Variable Life Separate Account I. Each of the Separate
Account Divisions invests in a corresponding Fund. The Separate Account
Divisions invest in the following Funds:
<TABLE>
<S> <C>
MML Series Investment Fund Oppenheimer Variable Account Funds
MML Small Cap Value Equity Fund Oppenheimer Global Securities Fund
MML Equity Fund Oppenheimer Small Cap Growth Fund
MML Equity Index Fund Oppenheimer Aggressive Growth Fund
MML Blend Fund Oppenheimer Growth Fund
MML Managed Bond Fund Oppenheimer Growth & Income Fund
Oppenheimer Multiple Strategies Fund
Panorama Series Fund, Inc. Oppenheimer High Income Fund
Panorama International Equity Portfolio Oppenheimer Strategic Bond Fund
Panorama Growth Portfolio Oppenheimer Bond Fund
Panorama Total Return Portfolio Oppenheimer Money Fund
MFS(R) Variable Insurance Trust/SM/ Goldman Sachs Variable Insurance Trust
MFS(R) New Discovery Series Goldman Sachs International Equity Fund
MFS(R) Emerging Growth Series Goldman Sachs Capital Growth Fund
MFS(R) Research Series Goldman Sachs Mid Cap Equity Fund
Goldman Sachs CORE U.S. Equity Fund
Goldman Sachs Growth and Income Fund
T. Rowe Price Equity Series, Inc. T. Rowe Price Fixed Income Series, Inc
T. Rowe Price New America Growth Portfolio T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
Fidelity Investments Variable Insurance Products Fund II
Contrafund Portfolio
</TABLE>
The policy is "flexible" because You may select the timing and amount of premium
payments. The policy is "adjustable" because You may choose to increase or
decrease the death benefit and change the death benefit option under the policy.
The policy is "variable" because the death benefit may, and cash surrender value
will, vary.
MassMutual is a mutual life insurance company established in 1851 under the laws
of Massachusetts. We are licensed to transact life, accident and health
insurance business in all fifty states of the United States, the District of
Columbia, Puerto Rico and certain provinces of Canada. As of December 31, 1997,
We had total assets under management of $152 billion and unconsolidated
statutory assets of $57.5 billion. The mailing address for the Home Office is
Massachusetts Mutual Life Insurance Company, Springfield, Massachusetts
01111-0001. The telephone number is (413) 788-8411.
______________________1998
The Securities and Exchange Commission has not approved or disapproved these
securities, or determined if
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this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be amended. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective.
This prospectus is not an offer to sell nor is it seeking an offer to buy these
securities in any state where the offer or sale is not permitted. This
prospectus is valid only when accompanied by the prospectuses of the Funds.
You should read and retain this prospectus.
Replacing existing insurance with the policy described in this prospectus may
not be to your advantage.
The policy is not available in all jurisdictions. This prospectus is not an
offering in any jurisdiction where the policy is not available. MassMutual has
not authorized any person to make any representations about the policy other
than those contained in this prospectus.
6
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<TABLE>
<CAPTION>
Table Of Contents Page
----
<S> <C>
PART I - General Provisions of the Policy.............................. 5
Availability...................................................... 5
Underwriting...................................................... 5
Premiums.......................................................... 5
Planned Annual Premiums..................................... 5
Annual Cutoff Policy Premium................................ 5
Minimum Net First Policy Premium............................ 6
Minimum Case Premium........................................ 6
Minimum and Maximum Premium Payments........................ 6
Net Premium Allocation...................................... 6
Termination....................................................... 6
Grace Period................................................ 6
Safety Test................................................. 6
Safety Test Grace Period................................. 7
Death Benefit Under the Policy.................................... 7
Minimum Face Amount......................................... 7
Death Benefit Options....................................... 7
Changes in Selected Face Amount............................. 8
Account Value..................................................... 8
Investment Return........................................... 8
Cash Surrender Value........................................ 9
Transfers................................................... 9
Automated Account Value Transfer......................... 9
Automated Account Re-Balancing........................... 10
Withdrawals................................................. 10
Policy Loan Privilege............................................. 10
Source of Loan.............................................. 10
If Loans Exceed the Policy Account Value.................... 11
Interest.................................................... 11
Repayment................................................... 11
Interest Credited on Loaned Value........................... 11
Effect of Loan.............................................. 11
Charges Under the Policy.......................................... 12
Deductions from Premiums.................................... 13
Sales Load.............................................. 13
State Premium Tax Charge................................ 13
Deferred Acquisition Cost ("DAC") Tax Charge............ 13
Account Value Charges....................................... 13
Administrative Charge................................... 13
Cost of Insurance Charge................................ 13
Face Amount Charge...................................... 13
Rider Charge............................................ 13
Separate Account Charges.................................... 13
Mortality and Expense Risk Charge....................... 13
Charges for Federal Income Taxes........................ 14
Fund Charges................................................ 14
Other Charges............................................... 15
Withdrawal Charges...................................... 15
Loan Interest Rate Expense Charge....................... 15
Substitute Insured Charge............................... 15
The Separate Account.............................................. 15
</TABLE>
7
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<TABLE>
<S> <C>
Investments of the Separate Account............................ 15
MML Series Investment Fund................................... 16
Oppenheimer Variable Account Funds........................... 17
Panorama Series Fund, Inc.................................... 18
Goldman Sachs Variable Insurance Trust....................... 19
MFS(R) Variable Insurance Trust/SM/.......................... 19
T. Rowe Price Equity Series, Inc............................. 20
T. Rowe Price Fixed Income Series, Inc....................... 20
Fidelity Investments Variable Insurance Products Fund II..... 21
Fund Monitoring.............................................. 21
The Guaranteed Principal Account...................................... 21
PART II - Additional Provisions of the Policy.............................. 21
Paid-up Policy Date................................................... 21
Reinstatement......................................................... 22
Payment Options....................................................... 22
Fixed Amount Payment Option..................................... 22
Fixed Time Payment Option....................................... 22
Lifetime Payment Option......................................... 22
Interest Payment Option......................................... 22
Joint Lifetime Payment Option................................... 22
Joint Lifetime Payment Option with Reduced Payments............. 23
Withdrawal Rights under Payment Options......................... 23
Beneficiary........................................................... 23
Changing the Policyowner or Beneficiary............................... 23
Right to Substitute Insured........................................... 23
Assignment............................................................ 23
Dividends............................................................. 23
Limits on Our Right to Challenge the Policy........................... 23
Misstatement of Age or Gender......................................... 24
Suicide Exclusion..................................................... 24
When We Pay Proceeds.................................................. 24
Free Look Provision................................................... 24
Additional Benefits By Rider.......................................... 24
Supplemental Monthly Term Insurance Rider....................... 24
Waiver of Monthly Charges Rider................................. 24
PART III - Other Important Information..................................... 25
Federal Income Tax Considerations..................................... 25
Your Voting Rights.................................................... 27
Our Rights............................................................ 28
Records and Reports................................................... 28
Sales and Other Agreements............................................ 28
Commissions........................................................... 29
Bonding Arrangement................................................... 28
Legal Proceedings..................................................... 29
Experts............................................................... 29
Financial Statements.................................................. 29
Appendix A - Glossary...................................................... 30
Appendix B - Rates of Return............................................... 31
Appendix C - Hypothetical Illustrations.................................... 36
Appendix D - Directors of Massachusetts Mutual Life Insurance Company...... 39
Appendix E - Financial Statements.......................................... 45
</TABLE>
8
<PAGE>
Part I - General Provisions Of the Policy
This section of the prospectus describes the general provisions of the policy
and is subject to the terms of the policy. You may review a copy of the policy
upon request.
In the event of a conflict between the terms within this prospectus and the
terms of the policy, the policy terms will control.
Certain provisions of the policy as described in this prospectus may differ in a
particular state because of specific state requirements.
We define the following terms in Appendix A:
Case, Insured, Issue Date, Monthly Calculation Date, Net Premium, Policy
Anniversary, Policy Date, Policy Year, Policyowner, Valuation Date,
Valuation Period and Valuation Time.
Throughout the prospectus, MassMutual is referred to as We, Us or Our, and the
policyowner is referred to as You or Your.
Availability.
The policy is available on a case basis. We may define a case as one person. All
policies within a case are aggregated for purposes of determining policy dates,
loan rates and underwriting requirements. If an individual owns the policy as
part of an employer sponsored program, he or she may exercise all rights and
privileges under the policy through their employer or other sponsoring entity
acting as case administrator. After termination of the employment or other
relationship, the individual may exercise such rights and privileges directly
with MassMutual.
The minimum total selected face amount is $50,000 per policy. At the time of
issue, the insured must be age 20 through age 85 as of his/her birthday nearest
the policy date.
Underwriting.
We currently offer three different underwriting programs:
1. full underwriting;
2. simplified issue underwriting; and
3. guaranteed issue underwriting.
The cost of insurance charges vary depending on the type of underwriting We use.
Premiums.
There are four premium concepts under the policy:
1. Planned Annual Premium.
2. Annual Cutoff Policy Premium.
3. Minimum Net First Policy Premium.
4. Minimum Case Premium.
1. Planned Annual Premium.
You elect planned annual premiums in the application, and You may change the
amount at any time. Planned annual premiums are the basis for the policy's
premium billing. The planned annual premium may be subject to minimum and
maximum amounts depending on the selected face amount of the policy, the
insured's age, gender and tobacco use classification, and the amount of the
first premium paid.
There is no penalty if You do not pay the planned annual premium. Your
payment of this amount does not guarantee coverage for any period of time.
Even if You pay planned annual premiums, the policy terminates if the account
value becomes insufficient to pay account value charges and the grace period
expires without sufficient payment, unless Your policy meets the safety test.
2. Annual Cutoff Policy Premium.
The annual cutoff policy premium depends on the policy's initial selected
face amount and the insured's issue age, gender and tobacco use
classification. This premium establishes a threshold for Your policy's sales
loads. If You pay premiums that are below the annual cutoff policy premium, a
higher sales load will result than if You pay premiums that exceed the annual
cutoff policy premium.
The following table shows the annual cutoff policy premium at certain ages
for a policy with a selected face amount of $100,000 in all years, under
death benefit option 1.
9
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ANNUAL CUTOFF POLICY PREMIUM
LEVEL $100,000 SELECTED FACE AMOUNT
(DEATH BENEFIT OPTION 1)
Issue Age
------------------------------
Class Age 25 Age 40 Age 55
----- ------ ------ ------
Male Tobacco $3,247 $5,315 $8,496
Female Tobacco $2,666 $4,395 $6,955
Unisex Tobacco $3,132 $5,131 $8,175
Male Non-Tobacco $2,639 $4,363 $7,183
Female Non-Tobacco $2,342 $3,883 $6,325
Unisex Non-Tobacco $2,580 $4,267 $7,009
Male UniTobacco $2,867 $4,705 $7,593
Female UniTobacco $2,431 $4,016 $6,450
Unisex UniTobacco $2,780 $4,567 $7,359
3. Minimum Net First Policy Premium.
You must pay the minimum net first policy premium and submit the application
and all other required forms in good order to Our Home Office before We will
issue Your policy. The minimum net first policy premium is twelve times an
amount equal to the first account value charges.
4. Minimum Case Premium.
The minimum case premium is $250,000 of first year annualized premium.
Minimum and Maximum Premium Payments.
While Your policy is in force, You may pay premiums at any time before the death
of the insured subject to certain restrictions. The minimum premium payment is
$100.00. If You choose the Guideline Premium Test, the maximum premium will be
stated on the Schedule Page of Your policy.
Regardless of whether You choose the Guideline Premium Test or the Cash Value
Accumulation Test, We have the right to refund a premium paid in any year if it
will increase the net amount at risk under the policy. Premium payments should
be sent to Our Home Office or to the address indicated for payment on the
premium reminder notice.
Net Premium Allocation.
You choose the percentages of Your net premiums to be allocated to the Separate
Account Divisions and/or the GPA. You may choose any whole-number percentages as
long as the total is 100%. You may allocate net premium payments to a maximum of
eight Separate Account Divisions and the GPA at any time. You may also change
Your allocation of future net premiums at any time without charge. To allocate
net premiums or to transfer account value to a ninth Separate Account Division,
You must transfer 100% of the account value from one or more of Your eight
selected Separate Account Divisions.
During Your free look period, we will apply Your first net premium to the
Oppenheimer Money Division, provided the premium equals or exceeds the minimum
net first policy premium. At the later of the end of the free look period or the
date We receive proper notice that You received Your policy, We will apply Your
account value to the GPA and/or Separate Account Divisions according to Your
instructions and subject to Our current allocation rules.
Termination.
We will not terminate Your policy for failure to pay premiums. Instead, We will
terminate Your policy if on a monthly calculation date:
. the account value less any policy debt is insufficient to cover the total
monthly deduction, and
. Your policy does not meet the safety test.
Your policy will then enter a 61-day grace period.
Grace Period.
We allow You 61 days to pay any premium necessary to cover an overdue monthly
deduction. You will receive a notice from Us which states the overdue amount and
premium due. During the 61-day grace period, the policy remains in force. Your
policy will terminate without value if We do not receive the premium due by the
later of 61 days or 31 days after We have mailed the written notice.
Safety Test.
The safety test is a lapse protection feature. If met, this test allows Your
policy to stay in force for a period of time even if there is insufficient
account value to cover the account value charges. You can never elect death
benefit option 2 or 3, and the insured cannot be in a substandard rating class
for the safety test to apply.
Your policy meets the safety test on any given monthly calculation date if:
. the sum of premiums paid; less
. any amounts withdrawn; less
10
<PAGE>
. any rider charges, if applicable;
equals or exceeds the sum of monthly safety test premiums on that monthly
calculation date and all prior monthly calculation dates during the safety test
period.
If Your policy debt exceeds account value, Your policy will fail the safety
test.
The safety test only applies from the start of the policy date through the
safety test's expiration date. The safety test's expiration date is the later of
the policy anniversary nearest the insured's 70th birthday, or the tenth policy
anniversary.
Safety Test Grace Period.
If Your policy does not meet the safety test on any given monthly calculation
date, we will mail You, and any assignee indicated on Our records, a written
notice. This notice states the premium amount You need to pay to prevent
termination of the safety test. The safety test will expire 31 days after we
mail this written notice, unless You send in the required premium payment. Once
the safety test terminates, You cannot reinstate it.
Death Benefit Under the Policy.
The death benefit is the amount We pay to the designated beneficiary(ies) when
the insured dies. Upon receiving proof of death, We pay the beneficiary the
death benefit amount determined as of the date the insured dies. The beneficiary
may direct Us to pay all or part of the benefit in cash or to apply it under one
or more of Our payment options.
Minimum Face Amount.
To qualify as life insurance under federal tax laws currently in effect, the
policy has a minimum face amount. The minimum face amount is determined using
one of two allowable definitions of life insurance: (1) the Cash Value
Accumulation Test or (2) the Guideline Premium Test. You choose which test to
use on the application prior to the issuance of Your policy. Once You choose the
way We determine Your minimum face amount, You cannot change it after Your
policy is issued.
The Cash Value Accumulation Test determines the minimum face amount by
multiplying the account value plus the refund of sales load, if applicable, by
the minimum face amount percentage. The percentages depend upon the insured's
age, gender and tobacco use classification.
Under the Guideline Premium Test, the minimum face amount is also equal to an
applicable percentage of the account value plus the refund of sales load, if
applicable, but the percentage varies only by age of insured.
Death Benefit Options.
In the application, You choose a selected face amount and death benefit option.
We offer three death benefit options:
1. Death Benefit Option 1:
----------------------
the death benefit is the greater of the selected face amount in effect
on the date of death or the minimum face amount in effect on the date
of death.
2. Death Benefit Option 2:
----------------------
the death benefit is the greater of (a) the sum of the selected face
amount in effect on the date of death plus the account value on the
date of death or (b) the minimum face amount in effect on the date of
death.
3. Death Benefit Option 3:
----------------------
the death benefit is the greater of (a) the selected face amount in
effect on the date of death, plus the sum of all premiums paid, less
withdrawals; or (b) the selected face amount in effect on the date of
death; or (c) the minimum face amount in effect on the date of death.
If the insured dies while the policy is in force, we will pay the death benefit
option in effect on the date of death, with the following adjustments:
. We add the part of any account value charges that apply for the
period beyond the date of death; and
. We deduct any policy debt outstanding on the date of death; and
. We deduct any account value charges unpaid as of the date of death.
If the insured dies after the first policy year, We will also include a pro-rata
share of any dividend allocated to the policy for the year death occurs.
Under death benefit options 1 and 3, the death benefit amount is unaffected by
Your policy's investment experience unless the death benefit is based on the
minimum face amount. Under death benefit option 2, the death benefit amount may
increase or decrease by investment experience.
We pay interest on the death benefit from the date of death to the date the
death benefit is paid or a payment option becomes effective. The interest rate
equals the rate determined under the interest payment option.
11
<PAGE>
Example: The following example shows how the death benefit may vary as a result
of investment performance and death benefit option in effect on the date of
death.
Policy A Policy B
-------- --------
(a) Selected face amount: $100,000 $100,000
(b) Account value on date of
death, plus refund of sales
load, if applicable $40,000 $50,000
(c) Sum of premiums less
withdrawals $30,000 $40,000
(d) Minimum face amount
percentage on date of death: 240% 240%
(e) Minimum face amount
(b x d): $96,000 $120,000
Death benefit if
death benefit option 1
is in effect
[greater of (a) or (e)]: $100,000 $120,000
Death benefit if
death benefit option 2
is in effect [greater of
(a + b) or (e)]: $140,000 $150,000
Death benefit if
death benefit option 3
is in effect [greater of
(a + c) or (a) or (e)]: $130,000 $140,000
The examples assume no additions to or deductions from the selected face amount
or minimum face amount are applicable.
Changes In Selected Face Amount.
You may increase the selected face amount by written request six months after
policy issue or six months after a previous increase. We may request adequate
evidence of insurability for an increase. We will not allow an increase in the
selected face amount after the policy anniversary date nearest the insured's
85th birthday. Additionally, any increase in the selected face amount will be
effective on the monthly calculation date which is on, or next follows, the
later of:
. 15 days after We have received and approved Your written request for
such change; or
. the requested effective date of the change.
Any increase must be for at least $10,000.
You may also decrease Your policy's selected face amount. We allow a decrease in
the selected face amount only once per policy year. The selected face amount
after a decrease must be at least $50,000. Any requested decrease in the
selected face amount will be effective on the monthly calculation date which is
on, or next follows the later of:
. 15 days after We receive and approve Your written request for such
change; or
. the requested effective date of the change.
Account Value.
The account value of Your policy is the value in the Separate Account Divisions
plus the value in the GPA. Initially, this value equals the net amount of the
first premium You paid under the policy. We apply this amount to the Oppenheimer
Money Division until the later of: (1) the expiration of the free look period or
(2) the date We receive proper notice that You have received Your policy. The
account value is then allocated among the Separate Account Divisions and/or the
GPA according to Your instructions, subject to applicable restrictions.
The purchase and sale of accumulation units will affect Your account value in
the Separate Account Divisions. We purchase and sell units at the unit value as
of the valuation time on the valuation date if We receive Your transaction
request before the valuation time. Otherwise, We will purchase and sell units to
complete Your request at the unit value as of the valuation time on the next
following valuation date, or a later date if You request. We determine unit
values on each valuation date.
Investment Return.
The investment return of a policy is based on:
. The account value held in each Separate Account Division for that
policy;
. The investment experience of each Separate Account Division as
measured by its actual net rate of return; and
. The interest rate credited on account value held in the GPA.
The investment experience of a Separate Account Division reflects:
. increases or decreases in the net asset value of the shares of the
underlying Fund;
. any dividend or capital gains distributions declared by the Fund;
and
12
<PAGE>
. any charges against the assets of the Separate Account Division.
We determine the investment experience each day on each valuation date. The
actual net rate of return for a Separate Account Division measures the
investment experience from the end of one valuation date to the end of the next
valuation date.
Cash Surrender Value.
You may surrender Your policy for its cash surrender value at any time while the
insured is living. The cash surrender value is:
. Account value; less
. Any outstanding policy debt; plus
. The refund of sales load, if applicable.
There is no surrender charge.
If You surrender Your policy within the first two policy years, We will refund a
portion of the sales load, as part of the cash surrender value. If you surrender
Your policy in the first policy year, We will reimburse 65% of the sales load
collected for that year. If You surrender Your policy in the second policy year,
We will reimburse 30% of the sales load collected in the first policy year.
Your surrender is effective on the date We receive the policy and a written
request in proper form at Our Home Office, unless You select a later effective
date. If, however, We receive Your surrender request on a date that is not a
valuation date or after a valuation time, then Your surrender will be effective
on the next valuation date.
Transfers.
You may transfer all or part of the account value among the policy's Separate
Account Divisions and the GPA by written request. In Your transfer request, You
must indicate the dollar amount or the whole-number percentage You wish to
transfer. There is no limit on the number of transfers You may make from the
Separate Account Divisions.
You may maintain account value in a maximum of eight Separate Account Divisions
and the GPA at any one time. If You want to transfer net premium or transfer
account value to a ninth Division, You must transfer 100% of the account value
from one or more of the eight active Separate Account Divisions.
You may transfer all account value in the Separate Account to the GPA at any
time without incurring a fee. The transfer will take effect when We receive Your
signed, written request.
We will consider all transfers made on one valuation date to be one transfer.
We currently do not charge a fee for transfers. We, however, reserve the right
to charge a fee for transfers if there are more than six transfers in a policy
year. This fee will not exceed $10 per transfer.
You may only transfer account value from the GPA to the Separate Account once
per policy year. This transfer must occur within the 31-day period following
your policy anniversary date. This transfer may not exceed 25% of Your account
value in the GPA at the time of Your transfer. For purposes of this transfer
restriction, Your account value in the GPA does not include policy debt.
However, You may transfer 100% of Your account value in the GPA to the Separate
Account if:
. You have transferred 25% of Your account value in the GPA in each of
the previous three policy years, and
. You have not allocated premium payments or made transfers to the GPA
during any of the previous three policy years, except as a result of a
policy loan.
You cannot transfer GPA account value equal to any policy debt.
Automated Account Value Transfer.
Automated account value transfer allows You to make monthly transfers of account
value in a Separate Account Division to any combination of Separate Account
Divisions and the GPA. You must specify the amount You wish to transfer as a
dollar amount or a whole-number percentage. Automated account value transfers
are not available from more than one Separate Account Division or from the GPA.
We consider this process as one transfer per policy year.
You can elect, change or cancel automated account value transfer on any
valuation date, provided We receive Your request in proper form. We will only
make transfers on the monthly calculation date. The effective date of the first
automated transfer will be the first monthly calculation date after We receive
Your request at Our Home Office. If We receive Your request before the end of
the free look period, Your first automated transfer will occur at the end of
this period.
Transfers will occur automatically. However, You must specify:
13
<PAGE>
. the Separate Account Division We are to transfer from; and
. the Separate Account Division(s) and/or GPA We are to transfer to; and
. the length of time during which transfers will continue.
If Your transfer amount is greater than Your account value in the Separate
Account Division We are transferring from, then We will transfer Your remaining
value in that Division in the same proportion as Your previously transferred
amounts. We will not process any more automated transfers thereafter.
Automated Account Re-Balancing.
Automated account re-balancing permits You to maintain a specified whole-number
percentage of Your account value in any combination of the Separate Account
Divisions and the GPA. We must receive written request for automated account
re-balancing in proper form. Then, We will make transfers on a quarterly basis
to and from the Separate Account Divisions and the GPA to re-adjust Your account
value to Your specified percentage.
This program allows You to maintain a specific fund allocation. Quarterly
re-balancing is based on Your policy year. We will re-balance Your account value
only on a monthly calculation date. We consider automated account re-balancing
as one transfer per policy year.
You can elect or cancel automated account re-balancing on any valuation date,
provided We receive Your request in proper form. You may only change allocation
percentages once each policy year. In addition, You may only reduce Your
allocation to the GPA by up to 25% once each policy year.
The effective date of the first automated re-balancing will be the first monthly
calculation date after We receive Your request at the Home Office. If We receive
the request before the end of the free look period, Your first re-balancing will
occur at the end of the free look period. The automated account re-balancing
program is not subject to the restrictions on transfers from the GPA to the
Separate Account.
You may participate in either the automated account value transfer program or
the automated account re-balancing program at one time.
Withdrawals.
After Your policy has been in force for six months, You can withdraw value from
Your policy on any monthly calculation date. You must send written request to
Our Home Office.
. Minimum withdrawal amount: $100 (before deducting the withdrawal
-------------------------
charge).
. Maximum withdrawal amount: account value, less policy debt, less an
-------------------------
amount equal to twelve multiplied by the most recent account value
charges for Your policy.
We deduct the withdrawal amount from Your account value as of the valuation time
on the applicable monthly calculation date. You must specify the GPA or the
Separate Account Division(s) from which the withdrawal is to be made. If You do
not specify otherwise, We will withdraw the amount in proportion from Your
values in the Separate Account Divisions and the GPA. The withdrawal amount may
not exceed the non-loaned account value of a Separate Account Division or GPA.
We deduct a charge of 2.0% of the amount You withdraw. This charge will not
exceed $25.00. We will reduce Your account value by the amount of the
withdrawal. If necessary, We will reduce Your policy's selected face amount to
prevent an increase in the amount at risk, unless You provide Us with
satisfactory evidence of insurability. Withdrawals may have tax consequences.
Policy Loan Privilege.
You can take a loan on Your policy at any time while the insured is living. The
maximum loan is:
. Your account value at the time of the loan; less
. any outstanding policy debt before the new loan; less
. interest on the loan being made and on any outstanding policy debt
to the next policy anniversary date; less
. an amount equal to the most recent account value charge for the
policy multiplied by the number of monthly calculation dates
remaining, up to and including, the next policy anniversary date.
You must properly assign Your policy to Us as collateral for the loan.
Source of Loan.
We deduct Your requested loan amount from the Separate Account Divisions and the
GPA in proportion
14
<PAGE>
to the non-loaned account value of each on the date of the loan request. We
liquidate shares taken from the Separate Account Divisions and transfer the
resulting dollar amounts to the GPA. We may delay any loan from the GPA for up
to six months. We may also delay any loan from the Separate Account if:
. the New York Stock Exchange is closed, except for normal weekend and
holiday closings, or
. trading is restricted, or
. the Securities and Exchange Commission determines that an emergency
exists, or
. the Securities and Exchange Commission permits Us to delay payment.
If Loans Exceed the Policy Account Value.
Policy debt is Your outstanding loan balance, including accrued interest. Policy
debt must not exceed Your account value. If this limit is reached, We may
terminate the policy, even if Your policy meets the safety test. If We terminate
Your policy for this reason, We will notify You, and any assignee shown on our
records, in writing. This notice states the amount necessary to bring the policy
debt back within the limit. If We do not receive a payment within 31 days after
the date We mailed the notice, the policy terminates without value at the end of
those 31 days. Termination of a policy under these circumstances could cause You
to recognize gross income.
Interest.
On the Application, You may select a loan interest rate of 6% per year or, where
permitted, an adjustable loan rate. All policies within a case must have the
same fixed or adjustable loan rate. We set the adjustable loan rate each year
that will apply for the next policy year. The maximum rate is based on the
monthly average of the composite yield on seasoned corporate bonds as published
by Moody's Investors Service. If Moody's is no longer published, We will use a
substantially similar average. The maximum rate is the greater of:
. the published monthly average for the calendar month ending two months
before the policy year begins; or
. 5%.
We will increase the rate if the maximum limit is at least 1/2% higher than the
rate in effect for the previous year. We will decrease the rate if the maximum
limit is at least 1/2% lower than the rate in effect for the previous year.
Interest accrues daily, becoming part of the policy debt. Interest is due on
each policy anniversary. If You do not pay interest when due, We will add the
interest to the loan, and it will bear interest at the same rate. We treat any
interest capitalized on a policy anniversary the same as a new loan. We will
deduct this capitalized interest from the Separate Account Divisions and the GPA
in proportion to the non-loaned account value in each.
Repayment.
You may repay all or part of any policy debt at any time while Your policy is in
force. Upon repayment, We will transfer values equal to the repayment from the
loaned portion of the GPA to the non-loaned portion of the GPA and the
applicable Separate Account Division(s). We will transfer the repayment in
proportion to the non-loaned value in each Separate Account Division and/or the
GPA at the time of repayment. If You do not repay the loan, We deduct the loan
amount due from the surrender value or death benefit.
Interest Credited on Loaned Value.
The amount equal to any outstanding policy loans is held in the GPA. This amount
is credited with interest at a rate which is the greater of 3.0% or Your policy
loan rate, less a MassMutual declared charge guaranteed not to exceed 3.0%. The
current charge varies by policy year as follows:
. Policy years 1 through 15: 0.75%.
. Policy years 16 through 30: 0.55%.
. Policy years 31 and thereafter: 0.45%.
Effect of Loan.
Your policy loan reduces the death benefit and cash surrender value under the
policy by the amount of the loan. Your repayment of the loan increases the death
benefit and cash surrender value by the amount of the repayment.
As long as a loan is outstanding, a portion of Your policy's account value equal
to the loan is held in the GPA. The Separate Account's investment performance
does not affect this amount. Tax consequences may result if You have policy debt
when you surrender Your policy.
15
<PAGE>
Charges Under The Policy.
We deduct certain charges for providing the insurance benefits under Your
policy, for administering Your policy, for assuming certain risks and for
incurring certain expenses in distributing Your policy. A summary of these
charges is as follows, and a more detailed description follows this chart:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Charges Current Rate Guaranteed Rate
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Deductions from Sales Load Charge Policy years 1 - 7: 10% of premiums up to Policy years 1 - 7: 10% of premiums up to
Premium annual cutoff policy premium annual cutoff policy premium
Policy years 8+: 2.5% of premiums up to Policy years 8+: 2.5% of premiums up to
annual cutoff policy premium annual cutoff policy premium
All policy years: 1% of premiums in excess of All policy years: 1% of premiums in excess
the annual cutoff policy premium of the annual cutoff policy premium
- -----------------------------------------------------------------------------------------------------------------------------------
State Premium Tax 0% to 4% of each premium, depending on This charge will always equal the applicable
Charge Your state's applicable rate state rate
- -----------------------------------------------------------------------------------------------------------------------------------
Deferred 1% of each premium This charge will always represent the
Acquisition Cost federal acquisition deferred cost tax
Tax Charge
- -----------------------------------------------------------------------------------------------------------------------------------
Account Value Administrative $5.25 per month ($63.00 annually) $9.00 per month ($108.00 annually)
Charges Charge
- -----------------------------------------------------------------------------------------------------------------------------------
Cost of Insurance A per thousand rate multiplied by the amount The maximum monthly cost of insurance charge
Charge at risk each month. This charge varies by for each $1,000 of insurance is shown in the
the insured's gender, issue age and tobacco Table of Maximum Monthly Mortality Charges
classification; the policy year We make the in Your policy
deduction; the rating class of Your policy
and the underwriting classification of the
case
- -----------------------------------------------------------------------------------------------------------------------------------
Face Amount Charge Issue Age 20-24 Issue Age 20-24
(for fully Policy years 1-20: $0.00167 per month Policy years 1-20: $0.00167 per month
underwritten of a specified amount of a specified amount
policies) Policy years 21+: 0 Policy years 21+: 0
Issue Age 25-34 Issue Age 25-34
Policy years 1-15: $0.00250 per month Policy years 1-15: $0.00250 per month
of a specified amount of a specified amount
Policy years 16+: 0 Policy years 16+: 0
Issue Age 35-39 Issue Age 35-39
Policy years 1-15: $0.00292 per month Policy years 1-15: $0.00292 per month
of a specified amount of a specified amount
Policy years 16+: 0 Policy years 16+: 0
Issue Age 40-44 Issue Age 40-44
Policy years 1-15: $0.00333 per month Policy years 1-15: $0.00333 per month
of a specified amount of a specified amount
Policy years 16+: 0 Policy years 16+: 0
Issue Age 45-49 Issue Age 45-49
Policy years 1-15: $0.00375 per month Policy years 1-15: $0.00375 per month
of a specified amount of a specified amount
Policy years 16+: 0 Policy years 16+: 0
Issue Age 50-85 Issue Age 50-85
Policy years 1-4: $0.01667 per month of Policy years 1-4: $0.01667 per month
a specified amount of a specified amount
Policy years 5+: 0 Policy years 5+: 0
- -----------------------------------------------------------------------------------------------------------------------------------
Separate Account Mortality and Policy years 1 through 15: 0.60% annually of Any policy year: 1.0%
Charges Expense Risks each Separate Account Division's assets
Charge Policy years 16-30: 0.40% annually of each
Separate Account Division's assets
Policy years 31+: 0.30% annually of each
Separate Account Division's assets
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Charges SEE FUND CHARGE TABLE SEE FUND CHARGE TABLE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Other Charges Withdrawal Charge 2.0% of the withdrawn amount, 2.0% of the withdrawn amount,
but not greater than $25.00 but not greater than $25.00
- -----------------------------------------------------------------------------------------------------------------------------------
Substitute Insured Charge $75.00 $75.00
- -----------------------------------------------------------------------------------------------------------------------------------
Loan Interest Policy years 1-15: 0.75% 3%
Crediting Rate Policy years 16-30: 0.55%
Charge Policy years 31+: 0.45%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Deductions from Premiums.
Prior to applying Your premium to the GPA or the selected Separate Account
Divisions, We deduct a sales load, state premium tax and a deferred acquisition
cost tax charge from Your premium.
Sales Load.
We deduct a sales load from Your premium for the expenses related to the sales
and distribution of the policies. We will refund a portion of the sales load to
You, as part of the cash surrender value, if You surrender Your policy within
the first two policy years.
State Premium Tax Charge.
States assess premium taxes at various rates. We currently deduct the applicable
state rate from each premium to cover premium taxes assessed against MassMutual
by the states. The state rate will be either the Massachusetts rate or the
applicable state rate.
We may increase or decrease this charge if there is any change in the tax or
change of residence. You should notify MassMutual of any residence change. Any
change in this charge will be effective immediately.
Deferred Acquisition Cost ("DAC") Tax Charge.
This charge is related to MassMutual's federal income tax burden, under Internal
Revenue Code Section 848.
Account Value Charges.
On each monthly calculation date, We deduct from Your account value the
following charges:
1. An administrative charge;
2. A cost of insurance charge;
3. A face amount charge (if applicable); and
4. Any rider charge (if applicable).
We deduct these charges from Your account value in proportion to the non-loaned
account value in the Separate Account and the GPA.
1. Administrative Charge.
We deduct a monthly charge for costs We incur for providing certain
administrative services.
2. Cost of Insurance Charge.
(We refer to this charge as the "Mortality Charge" in Your policy.) We deduct a
cost of insurance charge on each monthly calculation date. This charge is based
on the:
. Insured's gender;
. Insured's issue age;
. Insured's tobacco use classification;
. Policy year in which We make the deduction;
. Rating class of the policy; and
. Underwriting classification of the case.
This charge may vary monthly because it is determined by multiplying the
applicable cost of insurance rates by the amount at risk each policy month. We
will apply any change in this charge to all policies in the same class.
3. Face Amount Charge.
We currently deduct a monthly face amount charge from policies that are issued
under a full underwriting basis. We base this charge on the greater of the
initial selected face amount or the first premium multiplied by the applicable
minimum face amount percentage. The charge will not be based on an amount
greater than $10 million. This charge is fixed for a set number of policy years.
4. Rider Charge.
We will deduct applicable monthly rider charges for any additional benefits We
provide to You by rider.
Separate Account Charges
Mortality and Expense Risk Charge.
(We refer to this charge as the "Net Investment Factor Asset Charge" in Your
policy.) We charge the Separate Account Divisions for the mortality and expense
risks We assume. This charge varies by policy year, and We deduct it from the
value of each Division's assets attributable to the policies.
The mortality risk We assume is that the group of
17
<PAGE>
lives insured under Our policies may, on average, live for shorter periods of
time than We estimated. The expense risk We assume is that Our costs of issuing
and administering policies may be more than We estimated.
If all the money We collect from this charge is not needed to cover death
benefits and expenses, it will be Our gain. We will use this gain for any
purpose, including payment of sales commissions. If the money We collect is
insufficient, We will still provide for all death benefits and expenses.
Charges for Federal Income Taxes.
We do not currently charge the Separate Account Divisions for federal income
taxes attributable to them. However, We reserve the right to eventually charge
the Separate Account Divisions to provide for future federal income tax
liability of the Separate Account Divisions.
Fund Charges.
The value of the Separate Account Divisions' assets will reflect investment
management fees and other expenses of the Funds. The following table shows the
Funds' total fund operating expenses expressed as a percentage of average net
assets for the year ended December 31, 1997:
Total
Fund
Management Other Operating
Fund / Portfolio Name Fees Expenses Expenses
- -----------------------------------------------------------------------
MML Small Cap Value Equity(1)(2) 0.65% 0.11% 0.76%
MML Equity(1) 0.35% 0.00% 0.35%
MML Equity Index(6) 0.26% 0.11% 0.37%
MML Blend(1) 0.38% 0.00% 0.38%
MML Managed Bond(1) 0.44% 0.03% 0.47%
Oppenheimer Global Securities 0.70% 0.06% 0.76%
Oppenheimer Small Cap Growth(3) 0.75% 0.08% 0.83%
Oppenheimer Aggressive Growth 0.71% 0.02% 0.73%
Oppenheimer Growth 0.73% 0.02% 0.75%
Oppenheimer Growth & Income 0.75% 0.08% 0.83%
Oppenheimer Multiple Strategies 0.72% 0.03% 0.75%
Oppenheimer High Income 0.75% 0.07% 0.82%
Oppenheimer Strategic Bond 0.75% 0.08% 0.83%
Oppenheimer Bond 0.73% 0.05% 0.78%
Oppenheimer Money 0.44% 0.04% 0.48%
Panorama International Equity 1.00% 0.12% 1.12%
Panorama Growth 0.53% 0.01% 0.54%
Panorama Total Return 0.54% 0.01% 0.55%
Goldman Sachs Capital Growth(5) 0.75% 0.15% 0.90%
Goldman Sachs Mid Cap Equity(5) 0.80% 0.15% 0.95%
Goldman Sachs CORE U.S. Equity(5) 0.70% 0.10% 0.80%
Goldman Sachs Growth and Income(5) 0.75% 0.15% 0.90%
Goldman Sachs International Equity(5) 1.00% 0.25% 1.25%
MFS(R)New Discovery(4) 0.90% 0.25% 1.15%
MFS(R)Emerging Growth 0.75% 0.12% 0.87%
MFS(R)Research Series 0.75% 0.13% 0.88%
T. Rowe Price New America Growth 0.85% -- 0.85%
T. Rowe Price Mid-Cap Growth 0.85% -- 0.85%
T. Rowe Price Limited-Term Bond 0.70% -- 0.70%
Fidelity VIP Fund II Contrafund(7) 0.60% 0.21% 0.81%
(1) MassMutual has agreed to bear the expenses of these Funds (other than the
management fee, interest, taxes, brokerage commissions and extraordinary
expenses) in excess of 0.11% of the average daily net asset value of these Funds
through April 30, 1999. MassMutual does not expect that it will be required to
reimburse any expenses of the MML Equity Fund, MML Blend Fund or MML Managed
Bond Fund due to this undertaking in 1998. MassMutual estimates that these
expenses will be 0.39% of the MML Small Cap Value Equity Fund in 1998.
(2) The MML Small Cap Value Equity Fund had no operating expenses in 1997 since
it had not yet commenced operations. These figures represent MassMutual's
estimate of the Total Fund Operating Expenses for this Fund in 1998.
(3) The Oppenheimer Small Cap Growth Fund had no operating expenses in 1997
since it had not yet commenced operations. These figures represent the adviser's
estimate of the Total Fund Operating Expenses for this Fund in 1998.
(4) The MFS(R) New Discovery Series had no operating expenses in 1997 since it
had not yet commenced operations. These figures represent an estimate of the
Total Fund Operating Expenses for this Series in 1998. The adviser agreed to
bear expenses for the MFS(R) New Discovery Series, subject to reimbursement by
this Series, for the current fiscal year, such that this Series' Other Expenses
shall not exceed the 0.25%. The expense shown includes this reimbursement. If
not included, the Other Expenses are estimated to be 0.47%, increasing the Total
Fund Operating Expenses to 1.37%.
(5) The Goldman Sachs Variable Insurance Trust had no operating expenses in 1997
since it had not yet commenced operations. These figures represent an estimate
of the Total Fund Operating Expenses for 1998. The investment advisers to the
Goldman Sachs Capital Growth, Goldman Sachs Mid Cap Equity, Goldman Sachs CORE
U.S. Equity, Goldman Sachs Growth and Income and Goldman Sachs International
Equity Funds, each series of the Goldman Sachs VIT Trust, have voluntarily
agreed to reduce or limit certain "Other Expenses" of such Funds (excluding
management fees, taxes, interest and brokerage fees and litigation,
indemnification and other extraordinary expenses) to the extent such expenses
exceed 0.15%, 0.15%, 0.10%, 0.15% and 0.25% per annum of such Funds' average
daily net assets, respectively. The expenses shown include this reimbursement.
If not included, the Other Expenses for 1998 are estimated to be 4.49%, 5.34%,
2.29%, 2.67% and 1.97% for the Goldman Sachs Capital Growth, Goldman Sachs Mid
Cap Equity, Goldman Sachs CORE U.S. Equity, Goldman Sachs Growth and Income and
Goldman Sachs International Equity Funds, respectively.
(6) MassMutual agreed to bear the expenses of the MML Equity Index Fund (other
than the management fee, interest, taxes, brokerage commissions and
extraordinary expenses) in excess of 0.11% of the average daily net asset value
of the Fund in 1997. If not included, the Other Expenses would have been 0.16%,
increasing the Total Fund Operating Expenses to 0.43%. MassMutual's obligation
to bear these
18
<PAGE>
expenses for the MML Equity Index Fund terminated May 1, 1998.
(7) A portion of the brokerage commission that the Fidelity VIP Fund II
Contrafund pays is used to reduce its expenses. Additionally, this Portfolio has
entered into arrangements with its custodian whereby credits realized as a
result of uninvested cash balances are used to reduce custodian expenses.
Including these reductions, the Total Fund Operating Expenses for this Portfolio
would have decreased to 0.78%.
Other Charges.
Withdrawal Charges.
We deduct a charge from each withdrawal.
Loan Interest Rate Expense Charge.
We deduct a charge from the loan interest rate. This charge reimburses us for
expenses We incur for administering Your loan. The charge varies by policy year.
Substitute Insured Charge.
We charge an administrative fee if You transfer the policy to the life of a
substitute insured.
The Separate Account.
Our Board of Directors established the Separate Account on July 13, 1988 in
accordance with the provisions of Section 132G of Chapter 175 of the
Massachusetts General Laws. The Separate Account is registered as a unit
investment trust under the Investment Company Act of 1940, as amended. The
Securities and Exchange Commission does not supervise MassMutual's or the
Separate Account's management or investment practices. Under Massachusetts law,
however, the Division of Insurance of the Commonwealth of Massachusetts
regulates both Us and the Separate Account.
We establish designated segments of the Separate Account to receive and invest
premiums for other MassMutual variable life insurance policies. We have
established a segment for the policies.
Although the Separate Account assets are assets of MassMutual, We cannot use
those Separate Account assets equal to the reserves and other liabilities of the
Separate Account attributable to the policies to satisfy any obligations that
may arise out of any other business We conduct. The Separate Account assets may,
however, be subject to liabilities arising from other variable life insurance
policies funded by the Separate Account. We may at Our discretion transfer those
assets which exceed the reserves and other liabilities of the Separate Account
to Our general account. Such transfers will not adversely affect the Separate
Account.
We credit or charge the Separate Account Divisions with the Divisions' income
and realized or unrealized gains or losses without regard to any of MassMutual's
other income, gains, or losses.
MassMutual may accumulate in the Separate Account the mortality and expense
risks charge, account value charges and investment results applicable to those
assets that are in excess of net assets supporting the policies.
MassMutual has the right to establish additional divisions of the Separate
Account. We will invest amounts credited to any additional divisions in shares
of other Funds. We have the right to substitute new Funds for any Separate
Account Divisions.
Investments of the Separate Account.
We have established thirty Divisions within the policy's designated segment of
the Separate Account. Each Separate Account Division invests in a corresponding
Fund as follows:
- -------------------------------------------------------------------------------
Division Fund
- -------------------------------------------------------------------------------
MML Small Cap Value MML Small Cap Value
Equity Division Equity Fund
- -------------------------------------------------------------------------------
MML Equity Division MML Equity Fund
- -------------------------------------------------------------------------------
MML Equity Index Division MML Equity Index Fund
- -------------------------------------------------------------------------------
MML Blend Division MML Blend Fund
- -------------------------------------------------------------------------------
MML Managed Bond Division MML Managed Bond Fund
- -------------------------------------------------------------------------------
Oppenheimer Global Securities Oppenheimer Global Securities
Division Fund
- -------------------------------------------------------------------------------
Oppenheimer Small Cap Growth Oppenheimer Small Cap Growth
Division Fund
- -------------------------------------------------------------------------------
Oppenheimer Aggressive Growth Oppenheimer Aggressive Growth
Division Fund
- -------------------------------------------------------------------------------
Oppenheimer Growth Division Oppenheimer Growth Fund
- -------------------------------------------------------------------------------
Oppenheimer Growth & Income Oppenheimer Growth & Income
Division Fund
- -------------------------------------------------------------------------------
Oppenheimer Multiple Oppenheimer Multiple
Strategies Division Strategies Fund
- -------------------------------------------------------------------------------
Oppenheimer High Income Oppenheimer High Income Fund
Division
- -------------------------------------------------------------------------------
Oppenheimer Strategic Bond Oppenheimer Strategic Bond
Division Fund
- -------------------------------------------------------------------------------
Oppenheimer Bond Division Oppenheimer Bond Fund
- -------------------------------------------------------------------------------
Oppenheimer Money Division Oppenheimer Money Fund
- -------------------------------------------------------------------------------
Oppenheimer Money Division Oppenheimer Money Fund
- -------------------------------------------------------------------------------
Panorama International Equity Panorama International Equity
Division Portfolio
- -------------------------------------------------------------------------------
Panorama Growth Division Panorama Growth Portfolio
- -------------------------------------------------------------------------------
Panorama Total Return Panorama Total Return
- -------------------------------------------------------------------------------
19
<PAGE>
- -------------------------------------------------------------------------------
Division Portfolio
- -------------------------------------------------------------------------------
MFS(R) New Discovery Division MFS(R) New Discovery Series
- -------------------------------------------------------------------------------
MFS(R) Emerging Growth Division MFS(R) Emerging Growth Series
- -------------------------------------------------------------------------------
MFS(R) Research Division MFS(R) Research Series
- -------------------------------------------------------------------------------
Goldman Sachs International Goldman Sachs International
Equity Division Equity Fund
- -------------------------------------------------------------------------------
Goldman Sachs Capital Growth Goldman Sachs Capital Growth
Division Fund
- -------------------------------------------------------------------------------
Goldman Sachs Mid Cap Equity Goldman Sachs Mid Cap Equity
Division Fund
- -------------------------------------------------------------------------------
Goldman Sachs CORE U.S. Goldman Sachs CORE U.S.
Equity Division Equity Fund
- -------------------------------------------------------------------------------
Goldman Sachs Growth and Goldman Sachs Growth and
Income Division Income Fund
- -------------------------------------------------------------------------------
T. Rowe Price New America T. Rowe Price New America
Growth Division Growth Portfolio
- -------------------------------------------------------------------------------
T. Rowe Price Mid-Cap Growth T. Rowe Price Mid-Cap Growth
Division Portfolio
- -------------------------------------------------------------------------------
T. Rowe Price Limited-Term T. Rowe Price Limited-Term
Bond Division Bond Portfolio
- -------------------------------------------------------------------------------
Fidelity VIP Fund II Fidelity VIP Fund II
Contrafund Division Contrafund Portfolio
- -------------------------------------------------------------------------------
As custodian for the Separate Account, MassMutual holds the shares of the
underlying Funds purchased by the Separate Account Divisions. The Separate
Account purchases and redeems shares of the Funds at their net asset value. The
net asset value is determined at the time of receipt of the purchase order or
redemption request.
Some of the Funds available to You are similar to mutual funds offered in the
retail marketplace. These Funds generally have the same investment objectives,
policies and portfolio managers as the retail mutual funds and usually were
formed after the retail mutual funds. While these Funds generally have identical
investment objectives, policies and portfolio managers, they are separate and
distinct from the retail mutual funds. In fact, performance of these Funds may
be dramatically different from the performance of the retail mutual funds. This
is due to differences in the funds' sizes, dates shares of stocks are purchased
and sold, cash flows and expenses. You should remember that retail mutual fund
performance is not the performance of the Funds that are available to You in
this policy and is not an indication of future performance of such Funds.
There is no assurance that the Funds will achieve stated objectives. The Fund
prospectuses contain more detailed information about the Funds. Current copies
of the Fund prospectuses are attached to this prospectus. You should read the
information contained in the Funds' prospectuses before making allocations to
any Division of the Separate Account.
MML Series Investment Fund
The MML Series Investment Fund (the "MML Trust") is a no-load, open-end
management investment company. The MML Small Cap Value Equity Fund, MML Equity
Fund, MML Equity Index Fund, MML Blend Fund and MML Managed Bond Fund
(collectively, the "MML Funds") are separate series of shares of the MML Trust.
MassMutual acts as investment manager to each of the MML Funds. David L. Babson
and Company, Inc. ("Babson") serves as the investment sub-adviser to the MML
Equity Fund, the MML Small Cap Value Equity Fund and the Equity Sector of the
MML Blend Fund. Babson is a wholly-owned subsidiary of DLB Acquisition
Corporation, a controlled subsidiary of MassMutual.
MassMutual has also entered into an agreement with Mellon Equity Associates
("Mellon Equity") to serve as the investment sub-adviser to the MML Equity Index
Fund. MassMutual, Babson and Mellon Equity are registered as investment advisers
under the Investment Advisers Act of 1940.
MassMutual is also the investment adviser to MassMutual Corporate Investors and
MassMutual Participation Investors, closed-end investment companies, certain
wholly-owned subsidiaries of MassMutual, and various employee benefit plans.
MassMutual also serves as the investment adviser to MassMutual Corporate Value
Partners, Limited; MassMutual High Yield Partners, II, LLC; and MassMutual
Institutional Funds. MassMutual further serves as the collateral co-manager for
MassMutual Carlson CBO, N.V.
Citibank N.A. acts as custodian for the MML Trust, other than the MML Equity
Index Fund. Its home office is located at 111 Wall Street, New York, NY, 10005.
Boston Safe Deposit and Trust Company serves as the custodian of the MML Equity
Index Fund. It is an indirect subsidiary of Mellon Bank Corporation and is
located at One Boston Place, Boston, Massachusetts 02108.
20
<PAGE>
MML Small Cap Value Equity Fund
The investment objective of MML Small Cap Value Equity Fund is to achieve
long-term growth of capital and income by investing primarily in a diversified
portfolio of equity securities of smaller companies. The Fund invests primarily
in common stocks, securities convertible into common stocks and other equity
securities (such as warrants and stock rights) which are issued by companies
with a market capitalization, at the time of purchase, of $750 million or less
and which are listed on a national securities exchange or traded in the
over-the-counter market.
MML Equity Fund
The primary investment objective of MML Equity Fund is to achieve a superior
total rate of return over an extended period of time from both capital
appreciation and current income. A secondary investment objective is the
preservation of capital when business and economic conditions indicate that
investing for defensive purposes is appropriate. The assets of this Fund are
normally expected to be invested primarily in common stocks and other
equity-type securities.
MML Equity Index Fund
The investment objective of the MML Equity Index Fund is to provide investment
results that correspond to the price and yield performance of the publicly
traded common stocks in the aggregate, as represented by the Standard & Poor's
500 Composite Stock Price Index. ("Standard & Poor's 500" and "S&P 500(R)" are
trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use.
The Fund is not sponsored, endorsed, sold or promoted by Standard & Poor's or
The McGraw-Hill Companies, Inc.)
MML Blend Fund
The investment objective of MML Blend Fund is to achieve as high a level of
total rate of return over an extended period of time as is considered consistent
with prudent investment risk and the preservation of capital. This Fund invests
in a portfolio that may include common stocks and other equity-type securities,
bonds and other debt securities with maturities generally exceeding one year,
and money market instruments and other debt securities with maturities generally
not exceeding one year.
MML Managed Bond Fund
The investment objective of MML Managed Bond Fund is to achieve as high a total
rate of return on an annual basis as is considered consistent with the
preservation of capital. The assets of this Fund will be invested primarily in
investment grade, publicly traded, fixed income securities of such maturities as
MassMutual deems appropriate from time to time in light of market conditions and
prospects.
Oppenheimer Variable Account Funds
The Oppenheimer Variable Account Funds (the "Oppenheimer Funds") is an open-end,
diversified, management investment company. Oppenheimer Funds acts as the
investment vehicle for separate accounts for variable insurance policies offered
by insurance companies. Oppenheimer Global Securities Fund, Oppenheimer Small
Cap Growth Fund, Oppenheimer Aggressive Growth Fund, Oppenheimer Growth Fund,
Oppenheimer Growth & Income Fund, Oppenheimer Multiple Strategies Fund,
Oppenheimer High Income Fund, Oppenheimer Strategic Bond Fund, Oppenheimer Bond
Fund and Oppenheimer Money Fund are part of the Oppenheimer Funds.
OppenheimerFunds, Inc. ("OFI") supervises the investment operations of the
Oppenheimer Funds. OFI also determines the composition of each respective
portfolio and advises and recommends investment policies and the purchase and
sale of securities, pursuant to an investment advisory agreement with each
Oppenheimer Fund.
OFI is located at Two World Trade Center, New York, NY 10048-0203 and has
operated as an investment adviser since April 30, 1959. Oppenheimer Acquisition
Corp., a holding company owned in part by senior management of OFI, and
ultimately controlled by MassMutual, owns OFI. OFI is registered as an
investment adviser under the Investment Advisers Act of 1940.
Bank of New York acts as custodian for the Oppenheimer Funds. Its home office is
located at One Wall Street, New York, NY 10015.
Oppenheimer Global Securities Fund
The investment objective of Oppenheimer Global Securities Fund is to seek
long-term capital appreciation through investing a substantial portion of its
invested assets in securities of foreign issuers, growth-type companies,
cyclical companies and special investment opportunities (anticipated
acquisitions, mergers or other unusual developments) which are considered by
OFI, in its capacity as investment manager of the Funds, to have appreciation
possibilities but which may be
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considered to be speculative. The type of securities in which this Fund invests
will be primarily common stocks, as well as securities having the investment
characteristics of common stocks, such as convertible preferred stock,
convertible bonds and American Depository Receipts. Current income is not an
investment objective of Oppenheimer Global Securities Fund.
Oppenheimer Small Cap Growth Fund
The investment objective of Oppenheimer Small Cap Growth Fund is capital
appreciation. Current income is not an objective. In seeking its objective, the
Fund emphasizes investments in securities of "growth-type" companies with market
capitalization less than $1 billion, including common stocks, preferred stocks,
convertible securities, rights, warrants and options, in proportions which may
vary from time to time.
Oppenheimer Aggressive Growth Fund
The investment objective of Oppenheimer Aggressive Growth Fund is capital
appreciation. In seeking this objective the Fund will emphasize investments in
securities of "growth-type" companies. Such companies are believed to have
relatively favorable long-term prospects for an increased demand for the
particular company's products or services.
Oppenheimer Growth Fund
The investment objective of Oppenheimer Growth Fund is to seek to achieve
capital appreciation by investing in securities of well-known established
companies (companies which have a history of earnings and dividends). Current
income is a secondary consideration in the selection of the Growth Fund's
portfolio securities.
Oppenheimer Growth & Income Fund
The investment objective of Oppenheimer Growth & Income Fund is to seek a high
total return (which includes growth in the value of its shares as well as
current income) from equity and debt securities. From time to time this Fund may
focus on small to medium capitalization common stocks, bonds and convertible
securities.
Oppenheimer Multiple Strategies Fund
The investment objective of Oppenheimer Multiple Strategies Fund is to seek a
total investment return (which includes current income and capital appreciation
in the value of its shares) from investments in common stocks and other equity
securities, bonds and other debt securities, and "money market" securities.
Oppenheimer High Income Fund
The investment objective of Oppenheimer High Income Fund is to earn a high level
of current income by investing primarily in a diversified portfolio of high
yield, fixed-income securities, including long-term debt obligations and
preferred stock issues believed by OFI, in its capacity as investment manager of
the Fund, not to involve undue risk. This Fund's investment policy is to assume
certain risks (described more fully in the attached prospectus for the
Oppenheimer Funds) in seeking high yield, which is ordinarily associated with
high risk securities, commonly known as "junk bonds," in the lower rating
categories of the established securities ratings services, and unrated
securities.
Oppenheimer Strategic Bond Fund
The investment objective of Oppenheimer Strategic Bond Fund is to seek a high
level of current income principally derived from interest income from
investments in U.S. government securities, lower rated high yield fixed-income
securities, and foreign fixed-income securities and to seek to enhance such
income by writing covered call options on debt securities.
Oppenheimer Bond Fund
The investment objective of Oppenheimer Bond Fund is to seek a high level of
current income by investing primarily in debt securities. Secondarily, the Fund
seeks capital growth when consistent with its primary objective.
Oppenheimer Money Fund
The investment objective of the Oppenheimer Money Fund is to maximize current
income from investments in "money market" securities consistent with low capital
risk and maintenance of liquidity.
Panorama Series Fund, Inc.
The Panorama Series Fund, Inc., ("Panorama Fund") is an open-end, diversified,
management investment company. The Panorama Fund acts as the investment vehicle
for separate accounts for variable insurance policies offered by insurance
companies. The Panorama International Equity Portfolio, Panorama Growth
Portfolio and Panorama Total Return Portfolio are series of the Panorama Fund.
OFI supervises the investment operations of the Panorama Fund. OFI also
determines the composition of each Panorama Portfolio, and advises and
recommends investment policies and purchase and sale
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of securities, under an investment advisory agreement with each Panorama
Portfolio.
Babson-Stewart Ivory International, located in Cambridge, MA, is the sub-adviser
to the Panorama International Equity Portfolio. Babson-Stewart Ivory
International is a partnership formed in 1987 between Babson and Stewart Ivory &
Company, Ltd.
Bank of New York acts as custodian for the Panorama Fund. Its home office is
located at One Wall Street, New York, NY 10015.
Panorama International Equity Portfolio
The investment objective of the Panorama International Equity Portfolio is to
achieve long-term growth of capital by investing primarily in equity securities
(such as common stocks) of issuers trading for the most part in non-U.S.
markets.
Panorama Growth Portfolio
The investment objective of Panorama Growth Portfolio is to achieve long-term
growth of capital by investing primarily in common stocks with low price-
earnings ratios and better than anticipated earnings. Realization of current
income is a secondary consideration.
Panorama Total Return Portfolio
The investment objective of Panorama Total Return Portfolio is to maximize total
investment return (including both capital appreciation and income) principally
by allocating its assets among stocks, corporate bonds, U.S. Government
securities and money market instruments according to changing market conditions.
Goldman Sachs Variable Insurance Trust
The Goldman Sachs Variable Insurance Trust ("Goldman Sachs VIT Trust") is an
open-end, management investment company, organized in Delaware in September,
1997. The Goldman Sachs International Equity Fund, Goldman Sachs Capital Growth
Fund, Goldman Sachs Mid Cap Equity Fund, Goldman Sachs CORE U.S. Equity Fund and
Goldman Sachs Growth and Income Fund are each a separate series of shares of the
Goldman Sachs VIT Trust.
Goldman Sachs Asset Management ("GSAM") is a separate operating division of
Goldman Sachs & Co. It serves as investment adviser to the Goldman Sachs Growth
and Income, Goldman Sachs CORE U.S. Equity, Goldman Sachs Capital Growth and
Goldman Sachs Mid Cap Equity Funds. GSAM is located at One New York Plaza, New
York, NY 10004.
Goldman Sachs Asset Management International ("GSAMI") is an affiliate of
Goldman Sachs & Co. GSAMI serves as investment adviser to the Goldman Sachs
International Equity Fund. GSAMI is located at 133 Peterborough Court, London,
England, EC4A 2BB.
The custodian for each fund of the Goldman Sachs VIT Trust is State Street Bank
and Trust Company. It is located at 1776 Heritage Drive, North Quincy, MA 02110.
Goldman Sachs International Equity Fund
Goldman Sachs International Equity Fund seeks long-term capital appreciation
through investments in equity securities of companies that are organized outside
of the United States or whose securities are principally traded outside of the
United States.
Goldman Sachs Capital Growth Fund
Goldman Sachs Capital Growth Fund seeks long-term growth of capital through
diversified investments in equity securities of companies that are considered to
have long-term capital appreciation potential.
Goldman Sachs Mid Cap Equity Fund
Goldman Sachs Mid Cap Equity Fund seeks long-term capital appreciation primarily
through investments in equity securities of companies with public stock market
capitalizations within the range of market capitalization of companies
constituting the Russell Midcap Index at the time of investment, currently
between $400 million and $16 billion.
Goldman Sachs CORE U.S. Equity Fund
Goldman Sachs CORE U.S. Equity Fund seeks long-term growth of capital and
dividend income through a broadly diversified portfolio of large cap and blue
chip equity securities representing all major sectors of the U.S. economy.
Goldman Sachs Growth and Income Fund
Goldman Sachs Growth and Income Fund seeks long-term growth of capital and
growth of income through investments in equity securities that are considered to
have favorable prospects for capital appreciation and/or dividend paying
ability.
MFS(R) Variable Insurance Trust/SM/
The MFS(R) Variable Insurance Trust/SM/("MFS Trust") is an open-end management
investment company, organized as a Massachusetts business trust in 1994.
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The MFS(R) New Discovery Series, MFS(R) Emerging Growth Series and MFS(R)
Research Series (collectively referred to as "MFS Series") are each a separate
series of shares of the MFS Trust.
Massachusetts Financial Services Company ("MFS Co.") advises the MFS Series. MFS
Co. is a Delaware corporation and is located at 500 Bolyston Street, Boston, MA
02116.
State Street Bank and Trust Company is the custodian of the MFS Series. It is
located at 225 Franklin Street, Boston, MA 02110.
MFS(R) New Discovery Series
The investment objective of the MFS(R) New Discovery Series is to seek capital
appreciation. This objective is met by investing, under normal market
conditions, at least 65% of its total assets in companies that are believed to
offer superior prospects for growth. Such securities may either be listed on the
securities exchanges or traded in the over-the-counter markets and may be U.S.
or foreign companies.
MFS(R) Emerging Growth Series
The investment objective of the MFS(R) Emerging Growth Series is to provide
long-term growth of capital through investing primarily in common stocks of
companies which are early in their life cycle, but which have the potential to
become major enterprises (emerging growth companies).
MFS(R) Research Series
The investment objective for the MFS(R) Research Series is to provide long-term
growth of capital and future income. In seeking this objective, the Fund invests
a substantial portion of its assets in equity securities of companies believed
to possess better than average prospects for long-term growth. A smaller
proportion of the Fund's assets may be invested in bonds, short-term
obligations, preferred stocks or common stocks whose principal characteristic is
income production rather than growth.
T. Rowe Price Equity Series, Inc.
T. Rowe Price Equity Series, Inc. is a diversified, open-end investment company
incorporated in Maryland in 1994. The T. Rowe Price Mid-Cap Growth Portfolio and
T. Rowe Price New America Growth Portfolio are each a separate series of shares
of T. Rowe Price Equity Series, Inc.
T. Rowe Price Associates, Inc. ("T. Rowe Price") was founded in 1937 and is the
investment adviser to each of the Portfolios. Its business address is 100 East
Pratt Street, Baltimore, MD 21202.
State Street Bank and Trust Company and The Chase Manhattan Bank, N.A., London
are the custodians for the T. Rowe Price Mid-Cap Growth Portfolio and T. Rowe
Price New America Growth Portfolio. The custodians' main offices are located at
225 Franklin Street, Boston, MA 02110 and Woolgate House, Coleman Street,
London, EC2P 2HD, England, respectively.
T. Rowe Price Mid-Cap Growth Portfolio
The investment objective of T. Rowe Price Mid-Cap Growth Portfolio is to provide
long-term capital appreciation by investing primarily in common stocks of medium
sized (mid-cap) growth companies. The Portfolio focuses on companies with
superior earnings growth potential that are no longer considered new or emerging
but may still be in the dynamic phase of their life cycles.
T. Rowe Price New America Growth Portfolio
The investment objective of T. Rowe Price New America Growth Portfolio is to
provide long-term capital growth. This objective is met by investing in the
stocks of service companies, regardless of size, which are expected to show
superior earnings growth and are above-average performers in their fields. The
Portfolio may also invest up to 25% of total assets in nonservice-related growth
companies.
T. Rowe Price Fixed Income Series, Inc.
T. Rowe Price Fixed Income Series, Inc. is a diversified, open-end investment
company and incorporated in Maryland in 1994. The T. Rowe Price Limited-Term
Bond Portfolio is one of the series of shares of T. Rowe Price Fixed Income
Series, Inc. T. Rowe Price advises the T. Rowe Price Limited-Term Bond
Portfolio. State Street Bank and Trust Company and The Chase Manhattan Bank,
N.A., London are the custodians for the T. Rowe Price Limited-Term Bond
Portfolio.
T. Rowe Price Limited-Term Bond Portfolio
The investment objective of T. Rowe Price Limited-Term Bond Portfolio is a high
level of income consistent with moderate fluctuation in principal value. The
Portfolio invests primarily in investment-grade, corporate bonds with average
effective maturity ranging between one and five years. Up to 10% of the
Portfolio's assets can be invested in below investment grade securities,
commonly referred to a "junk
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bonds," including those with the lowest ratings, in an effort to enhance yield.
Fidelity Investments Variable Insurance Products Fund II
Fidelity Investments Variable Insurance Products Fund II ("Fidelity VIP Fund
II") is an open-end management investment company, organized as a Massachusetts
business trust in 1988. The Fidelity VIP Fund II Contrafund Portfolio is a
diversified fund of Fidelity VIP Fund II.
Fidelity Management & Research Company ("FMR") is the investment adviser to the
Fidelity VIP Fund II Contrafund Portfolio. FMR is the management arm of Fidelity
Investments. Fidelity Investment has its principal business address at 82
Devonshire Street, Boston, MA.
Fidelity Management & Research (U.K.) Inc. in London, England, and Fidelity
Management & Research (Far East) Inc., in Tokyo, Japan, assist FMR with foreign
investments. They each serve as sub-advisers for the Fidelity VIP Fund II
Contrafund Portfolio. The custodian for the VIP Fund II Contrafund Portfolio is
Brown Brothers Harriman & Co., located at 40 Water Street, Boston, MA.
Fidelity VIP Fund II Contrafund Portfolio
Fidelity VIP Fund II Contrafund Portfolio seeks long-term capital appreciation
by investing in the securities of companies whose value is not fully recognized
by the public.
Fund Monitoring.
The MML Trust, Oppenheimer Funds, Panorama Fund, Goldman Sachs VIT Trust, MFS
Trust, T. Rowe Price Equity Series, Inc., T. Rowe Price Fixed Income Series,
Inc. and Fidelity VIP Fund II were established to provide investment vehicles
for variable life insurance contracts and variable annuities contracts. Shares
of the MML Trust and Panorama Fund are not offered to the general public. They
are offered solely to MassMutual separate investment accounts and other life
insurance company separate accounts of MassMutual subsidiaries. Shares of the
Oppenheimer Funds, Goldman Sachs VIT Trust, MFS Trust, T. Rowe Price Equity
Series, Inc., T. Rowe Price Fixed Income Series, Inc. and Fidelity VIP Fund II
are also not offered to the general public. They are offered to insurance
company separate accounts affiliated and unaffiliated with MassMutual which fund
variable annuity, variable life insurance contracts and qualified plans.
Shares of the Funds may be sold to and held by separate accounts which fund
variable annuity and variable life insurance contracts. As a result, certain
conflicts of interests between variable annuity owners, variable life insurance
policyowners and program investors may occur. Each Board of Trustees/Directors
will monitor their respective Fund(s) for any material irreconcilable conflict
of interest. Each will determine the appropriate action, if any, which should be
taken if a material irreconcilable conflict arises between the holders of
variable annuity contracts and variable life policies.
The Guaranteed Principal Account (GPA).
In addition to the Separate Account, You may allocate net premium or transfer
account value to the GPA. Amounts You allocate or transfer to the GPA become
part of MassMutual's general account assets. You do not share in the investment
experience of those assets. Rather, We guarantee a 3% rate of return on Your
allocated amount. For amounts transferred to the GPA due to a policy loan, the
guaranteed rate is the greater of: (a) 3%; and (b) the policy loan rate less 3%.
We are not obligated to credit interest at a rate higher than this minimum. We
may, however, declare in advance a higher rate applicable for such periods.
Because of exemptive and exclusionary provisions, MassMutual has not registered
interests in Our general account under the Securities Act of 1933. We also have
not registered the general account as an investment company under the Investment
Company Act of 1940, as amended. Therefore, neither the general account nor any
interests therein are subject to these Acts, and the Securities and Exchange
Commission has not reviewed the general account disclosures. These disclosures
may, however, be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
Part II - Additional Provisions of the Policy.
Paid-up Policy Date.
The paid-up policy date is the policy anniversary
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nearest the insured's 100th birthday. On this date, Your selected face amount
automatically changes to equal the account value multiplied by a factor
guaranteed to be no less than 1. As of this date and thereafter, the death
benefit option will be death benefit option 1, the charge for cost of insurance
will be $0 and We will no longer accept premium payments. We will continue to
deduct any other account value charges. The policy does not lapse after the
paid-up policy date. Your payment of planned annual premiums does not guarantee
that the policy will continue in force to the paid-up policy date.
Reinstatement.
For a period of five (5) years after termination, You can request that We
reinstate the policy during the insured's lifetime. We will not reinstate the
policy if it has been surrendered for its cash surrender value. A termination
and/or reinstatement may cause the policy to become a modified endowment
contract.
Before We reinstate the policy, We must receive the following:
. A premium payment that will produce an account value equal to 3 times
the total account value charges for the policy on the monthly
calculation date on or next following the date of reinstatement;
. Evidence of insurability satisfactory to us; and
. Where necessary, a signed acknowledgement that the policy has become a
modified endowment contract.
If We do reinstate the policy, Your policy's selected face amount for the
reinstated policy will be the same as if the policy had not terminated. The
safety test will not apply to policies that We reinstate.
Payment Options.
Upon full surrender or the insured's death, We will pay the entire cash
surrender value or all or part of the death benefit in cash or as a series of
level payments under a payment option. Your payments will no longer be affected
by the investment experience of the Separate Account Divisions or the GPA.
To receive payments under any of the following options, the proceeds must be at
least $2,000. If the payments under any option are less than $20 each, We
reserve the right to make payments at less frequent intervals. Your payment
option choices are:
A. Fixed Amount Payment Option. We make a monthly payment for an agreed fixed
---------------------------
amount. The amount of each payment may not be less than $10 for each $1,000
applied. We credit interest of at least 3% per year each month on the
unpaid balance and add the interest to this balance. Payments continue
until the amount We hold runs out.
B. Fixed Time Payment Option. We make equal monthly payments for any period
-------------------------
selected, up to 30 years. The amount of each payment depends on:
. the total amount applied;
. the period selected;
. and the interest rate We credit to the unpaid balance.
C. Lifetime Payment Option. We make equal monthly payments on the life of a
-----------------------
named person. Three variations are available:
. Payments for life only;
. Payments guaranteed for five, ten or twenty years or the death of the
named person, whichever is later; or
. Payments guaranteed for the amount applied or the death of the named
person, whichever is later.
D. Interest Payment Option. We hold amounts applied under this option. We will
-----------------------
pay interest monthly of at least 3% per year on the unpaid balance.
E. Joint Lifetime Payment Option. We make equal monthly payments based on the
-----------------------------
lives of two named persons. While both named persons are living, we make
one payment per month. When one of the named persons dies, the same payment
continues for the lifetime of the other named person. We offer two
variations:
. Payments guaranteed for 10 years or when both named persons die,
whichever is later; and
. Payments for two lives only. We do not guarantee a specific number of
payments. We stop payments when both named persons die.
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F. Joint Lifetime Payment Option with Reduced Payments. We make monthly
---------------------------------------------------
payments based on the lives of two named persons. While both named persons
are living, we make one payment each month. When one dies, we reduce
payments by one-third and continue for the lifetime of the other named
person. We stop payments when both named persons die.
Withdrawal Rights under Payment Options.
If provided in the payment option election, You may withdraw all or part of the
unpaid balance or apply it under any other option.
Beneficiary.
A beneficiary is any person You name on Our records to receive insurance
proceeds after the insured dies. You name the beneficiary in the policy
application. There may be different classes of beneficiaries, such as primary
and secondary. These classes set the order of payment. There may be more than
one beneficiary in a class.
You may name any beneficiary as an irrevocable beneficiary. We need the consent
of an irrevocable beneficiary if You wish to change that beneficiary. We also
need the consent of any irrevocable beneficiary if You wish to exercise any
policy right except the right to:
. Exercise divident rights.
. Reinstate the policy after termination.
If no beneficiary is living when the insured dies, we will pay the death benefit
to the policyowner unless instructed otherwise. If the policyowner is deceased,
then We will pay the death benefit to the policyowner's estate.
Changing the Policyowner or Beneficiary.
You may change the policyowner or any beneficiary during the insured's lifetime
by writing to Our Home Office. Different rules apply if You named an irrevocable
beneficiary.
Right to Substitute Insured.
You may transfer the policy to the life of a substitute insured subject to
certain restrictions. You must request this transfer in writing. The
substitution of an insured may affect the policy's selected face amount and
account value. Future charges against the policy will be based on the life of
the substitute insured.
The costs to transfer are:
. an administrative fee of $75, plus
. any premium necessary to effect the transfer, plus
. any excess policy debt You have not repaid prior to transfer.
Excess policy debt is the amount by which policy debt exceeds the maximum loan
available after transfer. You must pay any such excess on or before the transfer
date.
The incontestability and suicide exclusion periods, as they apply to the
substitute insured, run from the transfer date. Any assignments will continue to
apply.
The Internal Revenue Service has ruled that a substitution of insureds is an
exchange of contracts which does not qualify for the tax deferral available
under Code Section 1035. Therefore, You must include in current gross income all
the previously unrecognized gain in the policy upon a substitution of insureds.
Assignment.
You may assign Your policy as collateral for a loan or other obligation, subject
to any outstanding policy debt. For any assignment to be binding on us, We must
receive a signed assignment in proper form at Our Home Office. We are not
responsible for the validity of any assignment.
Dividends.
Each year We determine the money available to pay dividends. We then determine
if We will pay any dividend under the policy. We will pay any dividend on Your
policy anniversary. If the insured dies after the first policy year, We will
include as part of the death benefit a pro rata share of any allocated dividend
for the year death occurs. We do not expect to pay any dividends under the
policies.
Limits on Our Right to Challenge the Policy.
We reserve the right to contest the validity of a policy within two years from
its issue date, reinstatement or an increase in the selected face amount. After
that two-year period, We cannot contest its validity, except for failure to pay
premiums.
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Misstatement of Age or Gender.
We will make an adjustment if the insured's date of birth or gender in the
application is not correct. If the adjustment is made when the insured dies, We
will adjust the death benefit by the most recent cost of insurance charge
according to the correct age and gender. If We make the adjustment before the
insured dies, We will base future monthly deductions on the correct age and
gender.
Suicide Exclusion.
If the insured commits suicide whether sane or insane within two years from the
issue date, We will pay a limited death benefit in one sum to the beneficiary.
The limited death benefit is the amount of premiums paid for the policy, less
any policy debt or amounts withdrawn.
If the insured commits suicide whether sane or insane within two years from an
increase in the selected face amount and while the policy is in force, We will
pay a limited benefit to the beneficiary. The limited death benefit is the cost
of insurance charges associated with the selected face amount increase.
If the insured commits suicide whether sane or insane within two years after the
policy is reinstated and while the policy is in force, We will pay a limited
death benefit to the beneficiary. The limited death benefit is the amount of
premium You paid to reinstate the policy and any premiums You paid thereafter,
less any policy debt or amounts You withdrew.
When We Pay Proceeds.
If the policy has not terminated, We will normally pay the cash surrender value,
loan proceeds or the death benefit within 7 days after We receive all required
documents in proper form at Our Home Office. We can delay payment of the cash
surrender value, any withdrawal from the Separate Account, Separate Account loan
proceeds or the death benefit during any period that:
. It is not reasonably practicable for Us to determine the amount
because the New York Stock Exchange is closed, except for normal
weekend or holiday closings, or trading is restricted; or
. The Securities and Exchange Commission determines that an emergency
exists; or
. The Securities and Exchange Commission permits Us to delay payment for
the protection of our policyowners.
We may delay payment of any cash surrender value or loan proceeds from the GPA
for up to 6 months from the date that We receive the request at Our Home Office.
We can delay payment of the entire death benefit if payment is contested. We
investigate all death claims arising within the two-year contestable period.
When the investigation is complete, We generally determine within five days
whether the claim should be paid and make payments promptly. If We delay payment
for 10 working days or more from the effective date of surrender or withdrawal,
We will add interest at the same rate as is paid under the interest payment
option at that time.
Free Look Provision.
You may cancel Your policy within 10 days after You receive it. You must mail or
deliver the policy either:
. to Our Home Office; or
. to the agent who sold You the policy; or
. to one of Our agency offices.
If You cancel the policy, We will pay a refund to You. The refund equals:
(a) any premium paid for the policy; plus
(b) interest credited to the policy under the GPA; plus or minus
(c) an amount that reflects the investment experience of the Separate
Account Divisions to the date We receive Your returned policy; minus
(d) any amounts You borrowed or withdrew.
During the free look period, We will apply premium payments to the Oppenheimer
Money Division.
Additional Benefits By Rider.
At Your request, the policy can include additional benefits. We approve these
benefits based on Our standards and limits for issuing insurance and classifying
risks. Any additional benefit We provide by rider is subject to the terms of
both the rider and the policy. We deduct the cost of any rider from Your account
value. Subject to state availability, the following riders are available.
Supplemental Monthly Term Insurance Rider.
The Supplemental Monthly Term Insurance Rider ("Term Rider") provides You with
the option to
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purchase monthly term insurance on the life of the insured. The Term Rider
selected face amount supplements the selected face amount of Your policy. You
can only elect the Term Rider in the policy's application. The safety test will
not apply to the Term Rider.
If You elect the Term Rider, Your policy's selected face amount, plus the Term
Rider's selected face amount must equal at least $50,000. However, Your policy's
selected face amount must be at least $5,000.
If You elect the Term Rider, the policy may have a lower annual cutoff policy
premium. As a result, You may pay a lower overall sales load when compared to a
policy with the same total selected face amount but without the Term Rider.
You may increase the Term Rider selected face amount upon satisfactory written
notice to Us. We will require satisfactory evidence of insurability for Your
requested increase. You may also decrease the Term Rider selected face amount
upon written notice in a form satisfactory to Us.
If You request an increase or decrease or policy withdrawal, You must specify
whether we should apply any resulting increase or decrease to the policy's
selected face amount or the Term Rider selected face amount. If you do not
specify, We will apply any resulting increase or decrease in proportion to the
policy's selected face amount and the Term Rider selected face amount.
The Term Rider will terminate:
1. If We receive satisfactory written notice to cancel from You. Such
cancellation will apply to all monthly calculation dates beginning on
or after the date We receive the cancellation notice; or
2. If Your account value is insufficient to cover Your account value
charges, regardless of whether Your policy meets the safety test; or
3. Thirty days after an unpaid premium when there is insufficient value
to cover the Term Rider's monthly charges; or
4. Upon the later of (a) Your policy anniversary nearest the insured's
70th birthday, or (b) upon the tenth policy anniversary; or
5. Upon termination of Your policy for any reason.
If termination occurs for the reason stated in No. 4, the policy's selected face
amount automatically increases by the amount of the Term Rider's selected face
amount. If the Term Rider terminates for any reason, it can never be reinstated.
Waiver of Monthly Charges Rider.
This rider allows Us to waive the account value charges of Your policy for at
least two years if:
. the insured becomes totally disabled before the policy anniversary
nearest the insured's 65th birthday; and
. such total disability continues for 6 months.
The Waiver of Monthly Charges Rider will terminate when any of the following
occurs:
. The insured is no longer disabled; or
. You do not give us the required satisfactory proof of continued total
disability; or
. The insured fails or refuses to have a required examination; or
. The day before the policy anniversary after the insured's 65th
birthday, or, if later, the date two years from the date the total
disability began.
Part III - Other Important Information.
Federal Income Tax Considerations.
The following discussion presents a general description of the federal income
tax consequences of the policy, in accordance with Our understanding of current
federal income tax laws. It is not an exhaustive study of all tax issues that
might arise under the policy. This discussion is not intended as tax advice. We
make no representation as to the likelihood of continuation of current federal
income tax laws and Treasury Regulations or of the current interpretations of
the Internal Revenue Service. We reserve the right to make changes in the policy
to ensure it qualifies as life insurance for tax purposes. We do not address
state or other applicable tax laws in this discussion. We make no guarantee
regarding the future tax treatment of any policy.
For complete consideration of federal and state tax consequences, You should
consult a qualified tax
29
<PAGE>
adviser prior to purchasing the policy.
Under current state laws, We may incur state and local taxes (in addition to
premium taxes). At present, these taxes are not significant. If there is a
material change in state or local tax laws, We reserve the right to charge the
Separate Account for such taxes if attributable to the Separate Account.
Policy Proceeds, Premiums and Loans.
We believe the policy meets the statutory definition of life insurance under
Internal Revenue Code ("Code") Section 7702 and thus receives the same tax
treatment as that given to fixed benefit life insurance. As a result, the
policy's death benefit is generally excludable from the gross income of the
beneficiary under Section 101(a)(1) of the Code. An exception to this general
rule is where a policy has been transferred for value. In that case, only the
portion of the death benefit equal to premiums paid for the policy may be
excluded from gross income.
Upon Your full surrender of a policy for its cash surrender value, You may
recognize ordinary income for federal tax purposes. Ordinary income is the
amount by which:
. account value, including
. outstanding policy debt (which may include unpaid interest), exceeds
. premiums paid but not previously recovered.
Decreases in selected face amount and withdrawals may be taxable depending on
the circumstances. Code Section 7702(f)(7) states that if a reduction of future
benefits occurs during the first 15 years after a policy is issued and if there
is a cash distribution associated with that reduction, You may be taxed on all
or part of the amount distributed. After 15 years, such cash distributions are
not subject to federal income tax, except to the extent they exceed the total
amount of premiums paid but not previously recovered. Generally, if a taxable
event does not otherwise exist, a withdrawal is taxable only if it exceeds Your
yet unrecovered premium contributions. We suggest that You consult Your tax
adviser prior to decreasing Your selected face amount or taking a withdrawal.
If You change the policyowner or the insured or exchange or assign Your policy,
tax consequences may occur. We also believe that under current law any policy
loan will be treated as policy debt. Therefore, no part of any loan under a
policy will constitute income to You. Under the "personal" interest limitation
provisions of the Code, interest on policy loans used for personal purposes,
which otherwise meet the requirements of Code Section 264, will no longer be tax
deductible. Other rules may apply to allow all or part of the interest expense
as a deduction if the loan proceeds are used for "trade or business" or
"investment" purposes. We suggest You consult Your tax adviser for further
guidance on the deductibility for tax purposes of the interest on policy loans.
If a business or corporation owns the policy, the Code may impose additional
restrictions. The interest deduction available for loans against a
business-owned policy is limited. For those corporations subject to the
alternative minimum tax, there may be an indirect tax upon the inside build-up
of gain. The corporate alternative minimum tax could also apply to a portion of
the amount by which death benefits received exceed the policy's cash value at
date of death.
Federal, state and local estate, inheritance, and other tax consequences of
ownership or receipt of policy proceeds depend on the circumstances of each
policyowner or beneficiary.
For complete information on the impact of changes to Your policy and federal and
state tax considerations, You should consult a qualified tax adviser.
Modified Endowment Contracts.
If Your policy becomes a modified endowment contract, loans, collateral
assignments, and other amounts distributed are taxable to the extent of any
accumulated income in the policy. In general, the amount subject to tax is the
excess of the account value (both loaned and unloaned) over the previously
unrecovered premiums paid. Any death benefits We pay under a modified endowment
contract, however, are not taxed any differently from death benefits payable
under other life insurance contracts.
A policy is a modified endowment contract if it satisfies the definition of life
insurance in the Code, but fails the additional "7-pay test." A policy fails
this test if the accumulated amount paid under the policy at any time during the
first seven policy years exceeds the total premiums that would have been payable
under a policy providing for guaranteed
30
<PAGE>
benefits upon the payment of seven level annual premiums. Regardless, a policy
which would otherwise satisfy the 7-pay test will still be taxed as a modified
endowment contract if it is received in exchange for a modified endowment
contract.
Certain changes will require Us to re-test a policy to determine whether it has
become a modified endowment contract. For example, a reduction in death benefits
during the first seven contract years will cause Us to re-test the policy as if
it had originally been issued with the reduced death benefit. If the premiums
actually paid into a policy exceed the limits under the 7-pay test for a policy
with the reduced death benefit, the policy will become a modified endowment
contract. This change is effective retroactively to the contract year in which
the actual premiums paid exceed the new 7-pay limits.
In addition, a "material change" occurring at any time while the policy is in
force will require Us to re-test the policy to determine whether it continues to
meet the 7-pay test. A material change starts a new 7-pay test period. The term
"material change" includes many increases in death benefits.
Since the policy provides for flexible premium payments, We will carefully
monitor the policy to determine whether increases in death benefits or
additional premium payments cause either the start of a new 7-pay test period or
the taxation of distributions and loans. All additional premium payments will be
considered.
If any amount is taxable as a distribution of income under a modified endowment
contract, it will also be subject to a 10% penalty tax. Limited exceptions from
the additional penalty tax are available for individual policyowners. These
exceptions include:
. distributions made on or after the date the taxpayer attains age
59 1/2; or
. distributions attributable to the taxpayer's becoming disabled; or
. distributions that are part of a series of substantially equal
periodic payments (made not less frequently than annually) made for
the life or life expectancy of the taxpayer.
Once a policy fails the 7-pay test, loans, collateral assignments, and
distributions occurring in the year of failure and thereafter become subject to
the rules for modified endowment contracts. In addition, any distribution or
loan made within two years prior to failing the 7-pay test is considered to have
been made in anticipation of the failure and may result in tax consequences.
For purposes of determining the amount of income received from a modified
endowment contract, the law requires the aggregation of all modified endowment
contracts issued to the same policyowner by an insurer and its affiliates within
the same calendar year. Therefore, loans and distributions from any one such
policy are taxable to the extent of the income accumulated in all the contracts
required to be aggregated.
You should consult a qualified tax adviser for complete information on modified
endowment contract status, especially in the case of a corporate-owned policy.
Diversification Standards.
To comply with final regulations under Code Section 817(h) ("Final
Regulations"), each Fund is required to diversify its investments. All
securities of the same issuer are treated as a single investment. Each
government agency or instrumentality, however, is treated as a separate issuer.
We intend to comply with the Final Regulations to ensure the policy continues to
qualify as life insurance for federal income tax purposes. If future regulations
are issued regarding whether a policyowner may direct investments to a
particular division of a separate account, We reserve the right to modify the
policy as necessary to prevent the policyowner from being considered the owner
of the assets of the Separate Account.
Your Voting Rights.
As long as the Separate Account continues to operate as a unit investment trust
under the Investment Company Act of 1940, as amended, You have voting rights.
You are entitled to instruct Us how to vote the Funds' shares held in the
Separate Account that are attributable to Your policy at shareholder meetings.
We determine who has voting rights as of the record date for the meeting.
We determine the number of Fund shares held in the Separate Account attributable
to Your policy by dividing Your account value in each Division, if any, by $100.
We count fractional votes.
In order to exercise Your voting rights, We will send
31
<PAGE>
You proxy material and an instruction form. If We have not received effective
voting instructions, We will vote Fund shares held by the Separate Account in
the same proportion as the shares for which We received instructions, if
required by law. Otherwise, We reserve the right to vote such shares at Our own
discretion.
Our Rights.
We reserve the right to take certain actions in connection with Our operations
and the operations of the Separate Account. We will act in accordance with
applicable laws. If required by law or regulation, We will seek Your approval.
Specifically, We reserve the right to:
. Create new segments of the Separate Account;
. Create new Separate Accounts;
. Combine any two or more Separate Accounts;
. Make available additional Separate Account Divisions investing in
additional investment companies;
. Eliminate one or more Separate Account Divisions;
. Substitute or merge two or more Separate Account Divisions or Separate
Accounts;
. Invest the assets of the Separate Account in securities other than
shares of the Funds as a substitute for such shares already purchased
or as the securities to be purchased in the future;
. Operate the Separate Account as a management investment company under
the Investment Company Act of 1940, as amended, or in any other form
permitted by law;
. De-register the Separate Account under the Investment Company Act of
1940, as amended, if registration is no longer required; and
. Change the name of the Separate Account.
We reserve all rights to the name MassMutual and Massachusetts Mutual Life
Insurance Company or any part of it. We may allow the Separate Account and other
entities to use Our name or part of it, but We may also withdraw this right.
Records And Reports.
We maintain all Separate Account and GPA records and accounts. Each year within
30 days after Your policy anniversary, We will mail to You a report showing:
. Your account value at the beginning of the previous policy year;
. all premiums paid during the previous policy year;
. all additions to and deductions from Your account value during the
policy year; and
. the account value, death benefit, cash surrender value and policy debt
as of Your last policy anniversary.
We will include any additional information required by any applicable law or
regulation in this report.
Sales And Other Agreements.
MML Distributors, LLC ("MML Distributors") a wholly-owned subsidiary of
MassMutual, is the principal underwriter of the policy. MML Investors Services,
Inc. ("MMLISI"), a wholly-owned subsidiary of MassMutual, serves as the
co-underwriter of the policies. Both MML Distributors and MMLISI are located at
1414 Main Street, Springfield, MA 01144-1013. Each underwriter is registered
with the Securities and Exchange Commission ("SEC") as a broker-dealer under the
Securities Exchange Act of 1934. Each is also a member of the National
Association of Securities Dealers, Inc. ("NASD").
MML Distributors may enter into selling agreements with other registered SEC
broker-dealers who are also members of the NASD. These are selling brokers.
We also sell the policies through state insurance licensed agents. These agents
are also registered representatives of selling brokers or of MMLISI.
When We receive a completed application, the selling broker or co-underwriter
performs suitability review. In some cases, We perform insurance underwriting.
If We accept the application, we determine the insured's risk classification. If
We do not accept the application, We will refund any premium paid.
Both MML Distributors and MMLISI receive compensation for their activities as
underwriters of the policies. We pay commissions through MMLISI and MML
Distributors to agents and selling brokers.
32
<PAGE>
MML Distributors does business under different variations of its name; including
the name MML Distributors, L.L.C. in the states of Illinois, Michigan, Oklahoma,
South Dakota and Washington; and the name MML Distributors, Limited Liability
Company in the states of Maine, Ohio and West Virginia.
Commissions.
We pay agents or selling brokers commissions as a percentage of premiums paid
under the policies. The commission percentage is based on the annual cutoff
policy premium. The maximum commission percentage We will pay under the policies
is 13% of premiums.
Agents or selling brokers may also receive asset-based compensation. The maximum
asset based compensation is 0.2% of the account value of the Separate Account
Divisions.
Agents may receive commissions at lower rates on policies sold to replace
existing insurance issued by MassMutual or any of its subsidiaries.
Bonding Arrangement.
We maintain an insurance company blanket bond which provides $50,000,000
coverage for MassMutual officers and employees and general agents and agents.
The blanket bond is subject to a $350,000 deductible.
Legal Proceedings.
We are currently not involved in any material legal proceedings that adversely
impact the policy.
Experts.
We have included the financial statements of MassMutual in this prospectus in
reliance on the reports of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of that firm as experts in accounting and auditing.
PricewaterhouseCoopers LLP's report on the statutory financial statements of
MassMutual includes explanatory paragraphs relating to the use of statutory
accounting practices rather than generally accepted accounting principles.
John M. Valencia, Assistant Vice President for MassMutual, has examined the
illustrations in Appendix C of this prospectus. We filed his opinion on the
illustrations as an exhibit to the registration statement filed with the SEC.
Financial Statements.
You should consider the financial statements of MassMutual included in Appendix
E of this prospectus only as bearing upon the ability of MassMutual to meet its
obligations under the policy.
33
<PAGE>
Appendix A - Glossary
Case:
A group of policies sold to individuals with a common employment or other
non-insurance motivated relationship.
Insured:
Person whose life the policy insures.
Issue Date:
The date the policy is in force. It is also the start date of the suicide
exclusion and contestability periods.
Monthly Calculation Date:
The date MassMutual deducts account value charges. The first monthly calculation
date is the policy date. Subsequent monthly calculation dates are on the same
date of each calendar month thereafter.
Net Premium:
Premium paid less sales load, premium tax charges and federal deferred
acquisition cost tax charges.
Policy Anniversary:
The anniversary of the policy date.
Policy Date:
The date used as the starting point for determining policy anniversary dates,
policy years and monthly calculation dates.
Policy Year:
The twelve month period beginning with the policy date, and each successive
twelve month period thereafter.
Policyowner:
The corporation, partnership, trust, individual, or other entity who owns the
policy, as shown on Our records.
Valuation Date:
A date on which the price of the Funds is determined. Generally, this will be
any date on which the New York Stock Exchange is open for trading.
Valuation Period:
The period from the end of one valuation date to the end of the next valuation
date.
Valuation Time:
The time the New York Stock Exchange closes on a valuation date (currently 4:00
p.m. New York time). All required actions will be performed as of the valuation
time.
34
<PAGE>
Appendix B - Rates of Return
Table 1 shows the Effective Annual Rates of Return of the Funds based on the
actual investment performance of the Funds, after deductions of investment
management fees and other operating expenses. This Table is based on December
31, 1997 figures. The Effective Annual Rates of Return do not reflect the
deduction of mortality and expense risk charges, premium deductions,
administrative charge, cost of insurance charges or face amount charges.
Table 2 shows the Effective Annual Rates of Return of the Separate Account
Divisions. These returns are based on the actual underlying Fund performance and
the deduction of the current mortality and expense risk charge of 0.60%. The
Effective Annual Rates of Return do not reflect premium deductions,
administrative charge, cost of insurance charges or face amount charges. This
table is based on December 31, 1997 figures. It assumes the Separate Account
Divisions have been in operation for the same periods as the underlying Funds in
which they invest. Also, it reflects the total of the income generated by the
Funds' net of investment management fees and other operating expenses, plus
realized or unrealized capital gains and losses.
Table 3 shows the One Year Total Returns of the Funds based on actual investment
performance. It reflects the deduction of investment management fees and other
operating expenses. This table is based on December 31, 1997 annualized figures.
These rates of return do not reflect the deduction of mortality and expense risk
charges, premium deductions, administrative charge, cost of insurance charges or
face amount charges.
Since Tables 1, 2 and 3 do not reflect deductions from premiums or
administrative, cost of insurance, and face amount charges, the rates do not
illustrate how actual investment performance will affect the benefits under the
policy. If these charges were included, the returns would be lower.
The rates of return shown do not indicate future performance. You may consider
these rates of returns when assessing Funds' investment advisers and
sub-advisers competence and performance.
35
<PAGE>
TABLE 1
EFFECTIVE ANNUAL RATES OF RETURN/1/
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
1 3 5 10 15 20 Since
Fund (Inception Date) Year Years Years Years Years Years Inception
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MML Equity (9/15/71)/2/ 28.59% 26.57% 18.25% 16.44% 16.19% 16.20% 14.78%
MML Equity Index (5/1/97)/3/ ---- ---- ---- ---- ---- ---- 21.93%
MML Blend (2/3/84) 20.89% 19.29% 13.81% 13.68% ---- ---- 13.67%
MML Managed Bond (12/16/81) 9.91% 10.58% 7.79% 9.08% 9.73% ---- 10.37%
Oppenheimer Global Securities
(11/12/90) 22.42% 13.82% 18.81% ---- ---- ---- 12.26%
Oppenheimer Aggressive Growth
(8/15/86) 11.67% 21.17% 15.92% 16.23% ---- ---- 15.31%
Oppenheimer Growth (4/3/85) 26.68% 29.42% 18.61% 16.67% ---- ---- 15.43%
Oppenheimer Growth & Income (7/5/95) 32.48% ---- ---- ---- ---- ---- 37.24%
Oppenheimer Multiple Strategies
(2/9/87) 17.22% 18.00% 13.31% 12.74% ---- ---- 12.04%
Oppenheimer High Income (4/30/86) 12.21% 15.90% 13.75% 14.32% ---- ---- 13.35%
Oppenheimer Strategic Bond (5/3/93) 8.71% 12.00% ---- ---- ---- ---- 7.64%
Oppenheimer Bond (4/3/85) 9.25% 10.23% 8.23% 9.50% ---- ---- 9.89%
Oppenheimer Money (4/3/85)/4/ 5.31% 5.35% 4.70% 5.79% ---- ---- 5.94%
Panorama International Equity
(5/13/92) 8.11% 10.53% 10.78% ---- ---- ---- 8.66%
Panorama Growth (1/21/82) 26.37% 27.52% 20.12% 18.66% 17.31% ---- 18.31%
Panorama Total Return (9/30/82) 18.81% 17.72% 13.21% 13.80% 13.72% ---- 14.05%
MFS(R) Emerging Growth (7/24/95) 21.90% ---- ---- ---- ---- ---- 23.53%
MFS(R) Research (7/26/95) 20.26% ---- ---- ---- ---- ---- 22.13%
T. Rowe Price New America Growth
(3/31/94) 21.12% 30.01% ---- ---- ---- ---- 23.66%
T. Rowe Price E.S. Mid-Cap Growth
(12/31/96) 18.80% ---- ---- ---- ---- ---- 18.80%
T. Rowe Price Limited-Term Bond
(5/13/94) 6.74% 6.59% ---- ---- ---- ---- 6.16%
Fidelity VIP Fund II Contrafund
(1/3/95) 24.14% ---- ---- ---- ---- ---- 28.16%
</TABLE>
1. The Average Annual Rate of Return (Total Return) is calculated by
determining, over a stated period of time, the average annual compounded
rate of return that an investment in the Fund earned over that period,
assuming reinvestment of all distributions.
2. Although the MML Equity Fund commenced operations in 1971, the information
necessary to calculate Average Annual Rates of Return is available only
for the year 1974 and subsequent periods.
3. This is the return for the period May 1, 1997 to December 31, 1997.
4. An investment in money market funds is neither insured nor guaranteed by
the U.S. Government, and such a fund's net asset value is not guaranteed
to remain stable at $1.00 per share. Although the Oppenheimer Money Fund
commenced operations on April 3, 1985, the information necessary to
calculate the performance information is available only for the year 1987
and subsequent periods.
Performance of MML Small Cap Value Equity Fund, Oppenheimer Small Cap Growth
Fund, Goldman Sachs International Equity Fund, Goldman Sachs Capital Growth
Fund, Goldman Sachs Mid Cap Equity Fund, Goldman Sachs CORE U.S. Equity Fund and
Goldman Sachs Growth and Income Fund, each a series of the Goldman Sachs VIT
Trust, and the MFS(R) New Discovery Series is unavailable since these Funds had
not commenced operations as of December 31, 1997.
36
<PAGE>
TABLE 2
EFFECTIVE ANNUAL RATES OF RETURN/1/ OF EACH DIVISION OF THE SEPARATE ACCOUNT
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
1 5 10 Since
Division (Inception Date) Year Years Years Inception
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MML Equity (9/15/71)/4/ 27.99% 17.65% 15.84% 14.18%
MML Equity Index (5/1/97)/2/ ---- ---- ---- 21.33%
MML Blend (2/3/84) 20.29% 13.21% 13.08% 13.07%
MML Managed Bond (12/16/81) 9.31% 7.19% 8.48% 9.77%
Oppenheimer Global Securities (11/12/90) 21.82% 18.21% ---- 11.66%
Oppenheimer Aggressive Growth (8/15/86) 11.07% 15.32% 15.63% 14.71%
Oppenheimer Growth (4/3/85) 26.08% 18.01% 16.07% 14.83%
Oppenheimer Growth & Income (7/5/95) 31.88% ---- ---- 36.64%
Oppenheimer Multiple Strategies (2/9/87) 16.62% 12.71% 12.14% 11.44%
Oppenheimer High Income (4/30/86) 11.61% 13.15% 13.72% 12.75%
Oppenheimer Strategic Bond (5/3/93) 8.11% ---- ---- 7.04%
Oppenheimer Bond (4/3/85) 8.65% 7.63% 8.90% 9.29%
Oppenheimer Money (4/3/85)/3/ 4.71% 4.10% 5.19% 5.34%
Panorama International Equity (5/13/92) 7.51% 10.18% ---- 8.06%
Panorama Growth (1/21/82) 25.77% 19.52% 18.06% 17.71%
Panorama Total Return (9/30/82) 18.21% 12.61% 13.20% 13.45%
MFS(R) Emerging Growth (7/24/95) 21.30% ---- ---- 22.93%
MFS(R) Research (7/26/95) 19.66% ---- ---- 21.53%
T. Rowe Price New America Growth (3/31/94) 20.52% ---- ---- 23.06%
T. Rowe Price Mid-Cap Growth (12/31/96) 18.20% ---- ---- 18.20%
T. Rowe Price Limited-Term Bond (5/13/94) 6.14% ---- ---- 5.56%
Fidelity VIP Fund II Contrafund (1/3/95) 23.54% ---- ---- 27.56%
</TABLE>
1. Performance information assumes current mortality and expense risk charges
of .60%. If guaranteed mortality and expense risk charges were used, the
performance results would be lower.
2. This is the return for the period May 1, 1997 to December 31, 1997.
3. Although the Oppenheimer Money Fund commenced operations on April 3, 1985,
the information necessary to calculate the Oppenheimer Money Division
performance information is available only for the year 1987 and subsequent
periods.
4. Although the MML Equity Fund commenced operations in 1971, the information
necessary to calculate Average Annual Rates of Return is available only for
the year 1974 and subsequent periods.
Performance of MML Small Cap Value Equity Division, Oppenheimer Small Cap Growth
Division, Goldman Sachs International Equity Division, Goldman Sachs Capital
Growth Division, Goldman Sachs Mid Cap Equity Division, Goldman Sachs CORE U.S.
Equity Division and Goldman Sachs Growth and Income Division, each a series of
the Goldman Sachs VIT Trust, and the MFS(R) New Discovery Division is
unavailable since these Divisions had not commenced operations as of December
31, 1997.
37
<PAGE>
TABLE 3
ONE YEAR TOTAL RETURNS/1/
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
For the year ended 1997 1996 1995 1994 1993 1992 1991 1990
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MML Equity (9/15/71)/2/ 28.59% 20.25% 31.13% 4.10% 9.52% 10.48% 25.56% (0.51)%
MML Equity Index (5/1/97)/3/ 21.93% ---- ---- ---- ---- ---- ---- ----
MML Blend (2/3/84) 20.89% 13.95% 23.28% 2.48% 9.70% 9.36% 24.00% 2.37%
MML Mgd. Bond (12/16/81) 9.91% 3.25% 19.14% (3.76)% 11.81% 7.31% 16.66% 8.38%
Opp. Global Securities (11/12/90) 22.42% 17.80% 2.24% (5.72)% 70.32% (7.11)% 3.39% 0.40%
Opp. Aggressive Growth (8/15/86) 11.67% 20.16% 32.52% (7.59)% 27.32% 15.42% 54.72% (16.82)%
Opp. Growth (4/3/85) 26.68% 25.20% 36.65% 0.97% 7.25% 14.53% 25.54% (8.21)%
Opp. Growth & Income (7/5/95) 32.48% 32.51% 23.52% ---- ---- ---- ---- ----
Opp. Multi. Strategies (2/9/87) 17.22% 15.50% 21.36% (1.95)% 15.95% 8.99% 17.48% (1.91)%
Opp. High Income (4/30/86) 12.21% 15.26% 20.37% (3.18)% 26.34% 17.92% 33.91% 4.65%
Opp. Strategic Bond (5/3/93) 8.71% 12.07% 15.33% (3.78)% 4.25% ---- ---- ----
Opp. Bond (4/3/85) 9.25% 4.80% 17.00% (1.94)% 13.04% 6.50% 17.63% 7.92%
Opp. Money (4/3/85) 5.31% 5.13% 5.62% (4.20)% 3.12% 3.76% 5.97% 7.80%
Panorama International Equity (5/13/92) 8.11% 13.26% 10.30% 1.44% 21.80% (4.32)% ---- ----
Panorama Growth (1/21/82) 26.37% 18.87% 38.06% (0.51)% 21.22% 12.36% 37.53% (7.90)%
Panorama Total Return (9/30/82) 18.81% 10.14% 24.66% (1.97)% 16.28% 10.21% 28.79% 0.50%
MFS(R) Emerging Growth (7/24/95) 21.90% 17.02% ---- ---- ---- ---- ---- ----
MFS(R) Research (7/26/95) 20.26% 22.33% ---- ---- ---- ---- ---- ----
T. Rowe Price New America Growth
(3/31/94) 21.12% 20.09% 51.10% 1.00% ---- ---- ---- ----
T. Rowe Price Mid-Cap Growth (12/31/96) 18.80% ---- ---- ---- ---- ---- ---- ----
T. Rowe Price Limited-Term Bond (5/13/94) 6.74% 3.26% 9.88% 2.62% ---- ---- ---- ----
Fidelity VIP Fund II Contrafund (1/3/95) 24.14% 21.22% 39.72% ---- ---- ---- ---- ----
</TABLE>
1. The figures shown are one year total returns from inception of the Funds.
These figures do not reflect the mortality and expense risk charges
assessed against the Separate Account, deductions from premiums or
administrative, cost of insurance and underwriting charges assessed against
the account value of the Policies. If these charges were included, the
total return figures would be lower. They may be considered in assessing
the competence and performance of each of the Funds' investment advisers.
2. The figures for the MML Equity Fund from 1974 through 1981 are as follows:
1974: (17.61)%; 1975: 32.85%; 1976: 24.77%; 1977: (0.52)%; 1978: 3.71%;
1979: 19.54% 1980: 27.62%; 1981: 6.67%.
3. This is the return for the period May 1, 1997 to December 31, 1997.
Performance of MML Small Cap Value Equity Fund, Oppenheimer Small Cap Growth
Fund, Goldman Sachs International Equity Fund, Goldman Sachs Capital Growth
Fund, Goldman Sachs Mid Cap Equity Fund, Goldman Sachs CORE U.S. Equity Fund and
Goldman Sachs Growth and Income Fund, each a series of the Goldman Sachs VIT
Trust, and the MFS(R) New Discovery Series is unavailable since these Funds had
not commenced operations as of December 31, 1997.
38
<PAGE>
TABLE 3 (Continued)
ONE YEAR TOTAL RETURNS/1/ (Continued)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
For the year ended 1989 1988 1987 1986 1985 1984 1983 1982
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MML Equity (9/15/71)/2/ 23.04% 16.68% 2.10% 20.15% 30.54% 5.40% 22.85% 25.67%
MML Equity Index (5/1/97)/3/ ---- ---- ---- ---- ---- ---- ---- ----
MML Blend (2/3/84) 19.96% 13.40% 3.12% 18.30% 24.88% 8.24% ---- ----
MML Mgd. Bond (12/16/81) 12.83% 7.13% 2.60% 14.46% 19.94% 11.69% 7.26% 22.79%
Opp. Global Securities (11/12/90) ---- ---- ---- ---- ---- ---- ---- ----
Opp. Aggressive Growth (8/15/86) 27.57% 13.41% 14.34% (1.65)% ---- ---- ---- ----
Opp. Growth (4/3/85) 23.59% 22.09% 3.32% 17.76% 9.50% ---- ---- ----
Opp. Growth & Income (7/5/95) ---- ---- ---- ---- ---- ---- ---- ----
Opp. Multi. Strategies (2/9/87) 15.76% 22.15% 3.97% ---- ---- ---- ---- ----
Opp. High Income (4/30/86) 4.84% 15.58% 8.07% 4.73% ---- ---- ---- ----
Opp. Strategic Bond (5/3/93) ---- ---- ---- ---- ---- ---- ---- ----
Opp. Bond (4/3/85) 13.32% 8.97% 2.52% 10.12% 18.82% ---- ---- ----
Opp. Money (4/3/85) 8.82% 7.31% 6.33% 5.68% 7.25% ---- ---- ----
Panorama International Equity (5/13/92) ---- ---- ---- ---- ---- ---- ---- ----
Panorama Growth (1/21/82) 35.81% 14.46% 0.25% 11.58% 27.31% 4.89% 32.72% 33.00%
Panorama Total Return (9/30/82) 22.98% 11.64% 4.26% 12.58% 25.43% 6.68% 20.20% 8.10%
MFS(R) Emerging Growth (7/24/95) ---- ---- ---- ---- ---- ---- ---- ----
MFS(R) Research (7/26/95) ---- ---- ---- ---- ---- ---- ---- ----
T. Rowe Price New America Growth
(3/31/94) ---- ---- ---- ---- ---- ---- ---- ----
T. Rowe Price Mid-Cap Growth (12/31/96) ---- ---- ---- ---- ---- ---- ---- ----
T. Rowe Price Limited-Term Bond (5/13/94) ---- ---- ---- ---- ---- ---- ---- ----
Fidelity VIP Fund II Contrafund (1/3/95) ---- ---- ---- ---- ---- ---- ---- ----
</TABLE>
1. The figures shown are one year total returns from inception of the Funds.
These figures do not reflect the mortality and expense risk charges
assessed against the Separate Account, deductions from premiums or
administrative, cost of insurance and underwriting charges assessed against
the account value of the Policies. If these charges were included, the
total return figures would be lower. They may be considered in assessing
the competence and performance of each of the Funds' investment advisers.
2. The figures for the MML Equity Fund from 1974 through 1981 are as follows:
1974: (17.61)%; 1975: 32.85%; 1976: 24.77%; 1977: (0.52)%; 1978: 3.71%;
1979: 19.54% 1980: 27.62%; 1981: 6.67%.
3. This is the return for the period May 1, 1997 to December 31, 1997.
Performance of MML Small Cap Value Equity Fund, Oppenheimer Small Cap Growth
Fund, Goldman Sachs International Equity Fund, Goldman Sachs Capital Growth
Fund, Goldman Sachs Mid Cap Equity Fund, Goldman Sachs CORE U.S. Equity Fund and
Goldman Sachs Growth and Income Fund, each a series of the Goldman Sachs VIT
Trust, and the MFS(R) New Discovery Series is unavailable since these Funds had
not commenced operations as of December 31, 1997.
39
<PAGE>
Appendix D - Directors of Massachusetts Mutual Life Insurance Company
Principal Occupation(s) During Past Five Years
Roger G. Ackerman, Director
Chairman and Chief Executive Officer, since 1996, President and Chief Operating
Officer, 1990-1996, Corning, Inc., One Riverfront Plaza, HQE 2, Corning, NY
14831.
James R. Birle, Director
Chairman, since 1997, and Founder, since 1994, President, 1994-1997, Resolute
Partners, LLC; General Partner, Blackstone Group, 1988-1994, 2 Soundview Drive,
Greenwich CT 06836.
Gene Chao, Director
Chairman, President and CEO, since 1991, Computer Projections, Inc., 733 SW
Vista Avenue, Portland, OR 97205.
Patricia Diaz Dennis, Director
Senior Vice President and Assistant General Counsel, since 1995, SBC
Communications Inc.; Special Counsel, 1993-1995, Sullivan & Cromwell; Assistant
Secretary of State for Human Rights and Humanitarian Affairs, 1992-1993, U.S.
Department of State, 175 East Houston, Room 4-A-70, San Antonio, TX 78205
Anthony Downs, Director
Senior Fellow, since 1977, The Brookings Institution, 1775 Massachusetts Ave.,
N.W., Washington DC 20036-2188.
James L. Dunlap, Director
Vice Chairman, since 1998, Ocean Energy, Inc.; President and Chief Operating
Officer, 1996-1998, United Meridian Corporation; Senior Vice President,
1987-1996, Texaco, Inc., 1201 Louisiana, Suite 1400, Houston, TX 77002-5603.
William B. Ellis, Director
Senior Fellow, since 1995, Yale University School of Forestry and Environmental
Studies; Chairman of the Board and Chief Executive Officer, 1993-1995, Northeast
Utilities, 31 Pound Foolish Lane, Glastonbury, CT 06033.
Robert M. Furek, Director
Partner, since 1997, Resolute Partners LLC, Chairman, since 1997, State Board of
Trustees for the Hartford School System; President and Chief Executive Officer,
1987-1996, Heublein, Inc., 1 State Street, Suite 2310, Hartford, CT 06103.
Charles K. Gifford, Director
Chairman and Chief Executive Officer, since 1996, and President 1989-1996,
BankBoston, N.A.; Chairman, since 1998, and Chief Executive Officer, since 1995,
BankBoston Corporation, 100 Federal Street, Boston, MA 02110.
William N. Griggs, Director
Managing Director, since 1983, Griggs & Santow, Inc., 75 Wall Street, 20th
Floor, New York, NY 10005.
George B. Harvey, Director
Chairman, President and CEO, 1983-1996, Pitney Bowes, One Landmark Square, Suite
1905, 19th Floor, Stamford, CT 06901.
Barbara B. Hauptfuhrer, Director
Director of various corporations, since 1972, 1700 Old Welsh Road, Huntington
Valley, PA 19006.
Sheldon B. Lubar, Director
Chairman, since 1977, Lubar & Co. Incorporated, 700 North Water Street, Suite
1200, Milwaukee, WI 53202.
<PAGE>
William B. Marx, Jr., Director
Senior Executive Vice President, since 1996, Lucent Technologies; Executive Vice
President and CEO, 1994-1996, AT&T Multimedia Products Group; Executive Vice
President and CEO, 1993-1994, AT&T Network Systems Group; Group Executive and
President, 1989-1993, AT&T Network Systems Group, 5 Peacock Lane, Village of
Golf, FL 33436-5299.
John F. Maypole, Director
Managing Partner, since 1984, Peach State Real Estate Holding Company, 55 Sandy
Hook Road - North, Sarasota, FL 34242.
John J. Pajak, Director, President and Chief Operating Officer
President and Chief Operating Officer, since 1996, Vice Chairman and Chief
Administrative Officer, 1996, Executive Vice President, 1987-1996, MassMutual,
1295 State Street, Springfield, MA 01111.
Thomas B. Wheeler, Director, Chairman and Chief Executive Officer
Chairman and Chief Executive Officer, since 1996, President and Chief Executive
Officer, 1988-1996, MassMutual, 1295 State Street, Springfield, MA 01111.
Alfred M. Zeien, Director
Chairman and Chief Executive Officer, since 1991, The Gillette Company,
Prudential Tower, Boston, MA 02199.
Executive Vice Presidents
Lawrence V. Burkett, Jr.
Executive Vice President and General Counsel, since 1993, Senior Vice President
and Deputy General Counsel, 1992-1993, MassMutual, 1295 State Street,
Springfield, MA 01111.
Peter J. Daboul
Executive Vice President and Chief Information Officer, since 1997, Senior Vice
President 1990-1997, MassMutual, 1295 State Street, Springfield, MA 01111.
John B. Davies
Executive Vice President, since 1994, Associate Executive Vice President, 1994,
General Agent, 1982-1993, MassMutual, 1295 State Street, Springfield, MA 01111.
Daniel J. Fitzgerald
Executive Vice President, since 1994, Corporate Financial Operations, 1994-1997,
Senior Vice President, 1991-1994, MassMutual, 1295 State Street, Springfield, MA
01111.
James E. Miller
Executive Vice President, since 1997 and 1987-1996, MassMutual; Senior Vice
President, 1996-1997, UniCare Life & Health, 1295 State Street, Springfield, MA
01111.
John V. Murphy
Executive Vice President, since 1997, MassMutual; Executive Vice President and
Chief Operating Officer, 1995-1997, David L. Babson & Co., Inc.; Chief Operating
Officer, 1993-1995, Concert Capital Management, Inc., Senior Vice President and
Chief Financial Officer, 1977-1993, Liberty Financial Companies, 1295 State
Street, Springfield, MA 01111.
Gary E. Wendlandt
Executive Vice President and Chief Investment Officer, since 1993, Executive
Vice President, 1992-1993, MassMutual, 1295 State Street, Springfield, MA 01111.
Joseph M. Zubretsky
Executive Vice President and Chief Financial Officer, since 1997, MassMutual;
Chief Financial Officer, 1996, HealthSource; Partner, 1990-1996, Coopers &
Lybrand, 1295 State Street, Springfield, MA 01111.
41
<PAGE>
EXHIBIT LIST
1(A)(1)(b) Resolution of Board of Directors establishing the SL10 Segment
of the Separate Account
1(A)(3)(a)(3) Variable Products Dealer Agreement
1(A)(5) Form of Flexible Premium Variable Adjustable Life Insurance
Policy
1(A)(11) Memorandum Describing MassMutual's Issuance, Transfer and
Redemption Procedures for the Policy
1(A)(8)(a) Participation Agreement with Oppenheimer Variable Account Funds,
Inc.
(b) Participation Agreement with T. Rowe Price Equity Series, Inc.
(c) Participation Agreement with MFS Variable Insurance Trust
(d) Form of Participation Agreement with Goldman Sachs Variable
Insurance Trust
(e) Participation Agreement with Fidelity Variable Insurance
Products Fund II
1(A)(10) Form of Application for Flexible Premium Variable Adjustable
Life Insurance Policy
2 Opinion and Consent of Lynn S. Mercier
<PAGE>
Exhibit 1(A)(1)(b)
To: Ann F. Lomeli From: Thomas B. Wheeler
Vice President, Secretary and Chairman and
Associate General Counsel Chief Executive Officer
MIP: B052 MIP: B329 Ext: 3800
Re: Delegated Authority-New Separate Date: July 13, 1998
Accounts Segments
Under the authority granted the Chief Executive Officer by a vote of the
Investment Committee of the Board of Directors adopted on May 13, 1998, I
hereby:
Establish a segment of Massachusetts Mutual Variable Life Separate
Account I ("the Separate Account") in accordance with the provisions of
Section 132G of Chapter 175 of the Massachusetts General Laws for the
purpose of investing premiums received under a new individual flexible
premium variable universal life insurance product (the "SL10 Policy");
and the appropriate officers of the company be, and each acting singly
hereby is, authorized to execute all documents or take any other action
which said officer deems necessary or advisable in order to permit the
sale of the SL10 Policy, including the filing of registration
statements or amendments thereto with the United States Securities and
Exchange Commission or other appropriate regulatory authorities.
/s/ Thomas B. Wheeler
- ----------------------------------------------------
Thomas B. Wheeler
Chairman and Chief Executive Officer
<PAGE>
Exhibit 1(A)(3)(a)(3)
VARIABLE PRODUCTS
DEALER AGREEMENT
(ver. 9/97)
WHEREAS, MML Distributors, LLC ("Distributors") and the Broker-Dealer set forth
on Schedule "A" attached hereto and incorporated herein by reference are
registered with the Securities and Exchange Commission (the "SEC") as
broker-dealers under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and are members of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, Distributors has been appointed by Massachusetts Mutual Life Insurance
Company ("MassMutual"), MML Bay State Life Insurance Company ("MML Bay State"),
and C.M. Life Insurance Company ("CM Life") (collectively the "Insurance
Companies"; individually an "Insurance Company") to act as the principal
underwriter of certain variable annuity and variable life insurance products
that they issue; and
WHEREAS, Distributors has been authorized by the Insurance Companies to form
selling groups of duly licensed and registered broker-dealers to distribute
these variable annuity and variable life insurance products; and
WHEREAS, Broker-Dealer desires to sell the variable annuity and/or variable life
insurance products described on Schedule B, attached hereto and incorporated
herein by reference (the "Products"); and
WHEREAS, unless Broker-Dealer has insurance licenses in all states where it
offers and sells the Products, Broker-Dealer will consummate some of such sales
through one or more insurance agencies supervised and controlled by or under the
common control with Broker-Dealer (collectively, the "Agencies"; individually,
an "Agency").
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:
1. Authorization to Sell and Service. Subject to the terms and conditions of
this Agreement, the Insurance Companies and Distributors appoint and
authorize Broker-Dealer and (if applicable) the Agencies set forth on
Schedule "C" attached hereto and incorporated herein by reference, to
solicit sales of and provide service with respect to the Products in all
states in which Broker-Dealer and (if applicable) Agencies is or are
properly licensed to conduct business (hereinafter Broker-Dealer and all
applicable Agencies are collectively referred to as the "Producers").
Producers are also authorized to deliver or arrange for delivery any
contracts issued by the Insurance Companies and to collect initial premiums
on such contracts. Producers hereby accept such appointment on a
non-exclusive basis and agree to use their best efforts to find purchasers
for the Products acceptable to the Insurance Companies.
2. Commissions. Compensation for sale of the Products by the registered
representatives of Broker-Dealer (the "Registered Representatives") shall
be paid as follows. In all states where Broker-Dealer is insurance
licensed, the appropriate Insurance Company shall pay to Broker-Dealer the
commissions set forth on Schedule "B" (hereinafter referred to as the
"Commissions"). In all states where the Broker-Dealer is not insurance
licensed, Commissions related to sales by the Registered Representatives in
those states will be paid to the appropriate Agencies designated on
Schedule "C". The appropriate Agency is the Agency which is properly
insurance licensed in the state where the sales are made and for which
Commissions are being paid.
Commissions will be paid only on premiums paid to and retained by an
Insurance Company on Products issued in accordance with applications
tendered pursuant to this Agreement. The Insurance Companies expressly
reserve the right to transfer future compensation on Products to other
broker-dealers or registered representatives in the event the owner of a
Product so requests.
<PAGE>
The Insurance Companies reserve the unconditional right, upon thirty (30)
days notice, to change the Commissions payable for Products issued,
renewed, converted, exchanged or otherwise modified on or after the
effective date of such change, as set forth in the aforesaid notice of
change. No Commissions will be due and payable for any surrendered, lapsed
or canceled Products which are subsequently reinstated or rewritten through
efforts of representatives of an Insurance Company other than Registered
Representatives.
All Commissions shall be returned to the appropriate Insurance Company if
the contract for the Product is tendered for redemption within seven
business days after acceptance of the application for the Product. In
addition, all Commissions shall be subject to chargeback in accordance with
the terms and conditions, if any, set forth on Schedule "B" or any
attachment thereto.
3. Product Availability. The Insurance Companies have qualified the Products
for offer and sale under the applicable insurance laws of various states
and other jurisdictions. Producers and Registered Representatives shall
solicit applications for the Products only in states and jurisdictions
where such Products have been so qualified. Producers shall, upon request,
be provided with a list of those states and jurisdictions in which the
Products have been qualified for sale. The Insurance Companies shall file
and make all statements or reports as are or may be required by the laws of
such state or jurisdiction to maintain these qualifications in effect.
4. Prospectuses. The Insurance Companies and Distributors have caused
registration statements to be prepared describing the material aspects of
the Products. The Insurance Companies represent and warrant for the
effective period of this Agreement that the prospectuses contained in the
registration statements for the Products (the "Prospectuses") do not and
will not contain any untrue statements of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were or
are made, not materially misleading. Distributors or its duly appointed
agent shall furnish Broker-Dealer, at no cost to Broker-Dealer, copies of
the Prospectuses in the number reasonably requested.
If any event shall occur as a result of which it is necessary to amend or
supplement the Prospectus for any Product in order to make the statements
therein, in light of the circumstances under which they were or are made,
true, complete or not misleading, Distributors will promptly furnish to
Broker-Dealer, without charge, any amendments or supplements to the
Prospectuses prepared by the Insurance Companies and supplied to
Distributors sufficient to make the statements made in the Prospectus as so
amended or supplemented true, complete and not misleading.
5. Sales Literature and Materials. In connection with the offer and sale of
the Products, Broker-Dealer is authorized to use both the Prospectuses
contained in the current registration statements for the Products and any
other sales materials relating to the Products that have been provided or
authorized by Distributors. Broker-Dealer shall not, and shall ensure that
Registered Representatives shall not: (i) print, publish, distribute or
utilize any advertising material, prospectuses, circulars, letters,
pamphlets, schedules, stationery, broadcasting or sales material of any
kind relating to the Products, Distributors or to the Insurance Companies
unless such material has been provided by Distributors for such use or
unless prior written approval of Distributors of such material is obtained,
or (ii) orally communicate any information or make representations other
than such information and representations contained in the Prospectuses,
the contracts for the Products, or in any written materials provided or
authorized by Distributors .
Producers are not authorized and are expressly forbidden on behalf of the
Insurance Companies to estimate future dividends or policy performance
except through the use of authorized projections or illustrations provided
by Distributors or an Insurance Company.
Upon termination of this Agreement, all Prospectuses, sales promotion
materials, advertising, circulars, and documents relating to the Products
shall be promptly returned to Distributors or, if requested by
Distributors, destroyed.
<PAGE>
6. Producers' Representations and Responsibilities.
a. Insurance Licenses. Broker-Dealer and/or (if applicable) Agencies
shall be properly licensed as an insurance agency, appointed with
the appropriate Insurance Company, and otherwise comply with all
applicable insurance licensing requirements in the jurisdictions
where Registered Representatives will be offering or selling the
Products. Broker-Dealer hereby represents that it is, and/or (if
applicable), the Agencies are, properly authorized under applicable
state law to receive insurance commissions generated from sales of
the Products.
Producers shall ensure that all Registered Representatives are
properly insurance licensed and are appointed by the appropriate
Insurance Company for the sale of the Products in the jurisdictions
where Registered Representatives will be offering or selling the
Products. In states where such licensing and appointment must occur
prior to Producers' and/or Registered Representatives' soliciting
any sales of the Products, Producers shall ensure that such
licensing and appointment occur in compliance with such
requirements. The Insurance Companies will process all insurance
licenses and appointments in accordance with their standard
procedures, and may, in their sole discretion, refuse, terminate or
discontinue any such license or appointment without cause.
b. Securities Licenses. Broker-Dealer represents that it is properly
licensed and registered as a broker-dealer under applicable state
and federal securities law and is a member in good standing of the
NASD. Broker-Dealer shall maintain its broker-dealer registration
under the Exchange Act and, where required, in all jurisdictions
where Registered Representatives will be offering and selling the
Products, and shall always be a member in good standing of the
NASD. Broker-Dealer will notify Distributors immediately if it
ceases to be so registered or licensed or a member of the NASD.
Broker-Dealer shall have all Registered Representatives who will be
soliciting and servicing the Products duly registered with the NASD
as registered representatives and, where required, licensed with
applicable state securities authorities.
c. Lack of Licenses. If a Registered Representative fails to maintain
the required licenses and appointments Producers shall immediately
notify the appropriate Insurance Company and shall advise such
Registered Representative that he or she is no longer authorized to
sell the Products. Producers shall take all additional action
necessary to terminate the sales activities of such Registered
Representatives relating to the Products.
d. Background Investigations. Producers shall investigate all
Registered Representatives relative to their business reputation
and competency to sell the Products. Producers shall cause such
Registered Representatives' qualifications to be certified to the
satisfaction of Distributors and the appropriate Insurance Company.
e. Supervision. All Registered Representatives and Agencies are
persons associated with Broker-Dealer as defined in Section
3(a)(18) of the Exchange Act. Accordingly, Broker-Dealer has full
responsibility for the sales activities of all Registered
Representatives and Agencies engaged directly or indirectly in the
offer or sale of the Products.
Producers shall: (i) train and supervise all Registered
Representatives; (ii) establish such procedures as are necessary to
ensure that all Registered Representatives are properly insurance
and securities licensed; and (iii) upon request by an Insurance
Company, furnish such records as are necessary to establish that
all Registered Representatives are properly licensed, trained and
supervised. If a Registered Representative fails to meet the
supervisory standards imposed by Producers, Producers shall advise
the appropriate Insurance Company and such Registered
Representative that he/she is no longer authorized to sell the
Products.
<PAGE>
f. Suitability. Producers shall ensure that Registered Representatives
recommend the purchase of the Products only if the Registered
Representatives have reasonable grounds to believe that such
purchase is suitable for the applicant. A Registered Principal of
Broker-Dealer will make and record all such determinations.
g. Delivery of Prospectuses. Broker-Dealer shall, in compliance with
applicable federal and state securities laws, distribute a current
Prospectus to each person to whom a Product is offered or sold.
h. Delivery of Contracts. If an Insurance Company sends a contract for
a Product to a Producer, then Producers will assure that: (i) the
contract is delivered to the purchaser no later than 5 business
days after Producer's receipt of the contract, and (ii) appropriate
evidence of such delivery to the purchaser is maintained.
Producers, in accordance with Section 8 of this Agreement, shall be
fully responsible for any and all losses and expenses incurred by
an Insurance Company or Distributors as a result of Producers'
failure to satisfy the obligations set forth in this section.
i. Books and Records. Producers shall maintain all books and records
required by applicable laws and regulations in connection with the
offer and sale of the Products. The books, accounts and records of
Producers relating to the sale of the Products shall be maintained
so as to clearly and accurately disclose the nature and details of
the transactions. Without limiting the foregoing, the receipt and
payment of Commissions by Producers pursuant to this Agreement
shall be reflected on Broker-Dealer's and Agencies' books and
records.
j. Confidentiality. Producers shall keep confidential all information
obtained pursuant to this Agreement (including, without limitation,
names of the purchasers of the Products) and shall disclose such
information only if the appropriate Insurance Company has
authorized such disclosure in writing or if such disclosure is
expressly required by duly authorized federal or state regulatory
authorities.
k. Compliance with Laws. Producers shall, and shall ensure that
Registered Representatives, comply with all requirements of the
NASD, the Exchange Act and all other federal and/or state laws
applicable to the solicitation, sale and service of the Products
including, without limitation, all insurance regulations pertaining
to replacements and the rebating of commissions.
l. Payment of Commissions to Agencies. If commission payments are to
be made to Agencies, as provided in Section 2 of this Agreement,
Producers certify that they have received appropriate "no-action"
relief from the SEC, or will conduct the business operations of
Broker-Dealer and Agencies in a manner consistent with applicable
securities law requirements, such that Agencies need not be
registered as broker-dealers under the Exchange Act. Producers
agree to provide Distributors and the appropriate Insurance
Company, upon request, copies of their "no-action" letter or with
other evidence that Agencies' receipt of commissions for Products
is permissible under the Exchange Act and NASD rules.
m. Payment of Commissions to Registered Representatives. Producers
shall pay compensation for the sale of the Products only to
Registered Representatives who, at the time of sale, are properly
insurance licensed and appointed with the appropriate Insurance
Company and registered with the NASD and, where required, properly
licensed with state securities authorities. Producers shall be
solely responsible for the payment of any commissions, payments or
other consideration of any kind whatsoever to the Registered
Representatives in connection with the sale of the Products.
Registered Representatives shall have no recourse against either
the Insurance Companies or Distributors in the event Producers fail
to deliver such compensation to Registered Representatives.
n. Unregistered Personnel. Producers shall ensure that their
unregistered personnel: are not involved in effecting securities
transactions, do not recommend securities or provide other
investment advice, do not respond to questions that require
knowledge of the securities business, direct all securities-related
questions to Registered Representatives, provide only clerical or
ministerial assistance with respect to securities transactions, do
not handle customer funds or customer securities, and do not
receive any commissions or other transaction-related compensation
for sales of Products.
<PAGE>
o. Authority. Producers represent that this Agreement has been duly
authorized, executed and delivered by Producers, constitutes a valid
and legally binding obligation, and that neither the execution and
delivery of this Agreement by Producers nor the consummation of the
transactions contemplated herein will result in a breach or violation
of any applicable provision of law or the NASD Conduct Rules, or any
judicial or administrative orders in which Producers are named or any
material agreement or instrument to which they are a party or by which
they are bound.
7. Investigations and Customer Complaints. Producers agree to cooperate fully
in any insurance, securities or other regulatory investigation, inquiry,
inspection or proceeding or in any judicial proceeding arising in
connection with the Products sold or attempted to be sold by the Producers
and/or the Registered Representatives. Producers shall permit applicable
federal and state securities, insurance and other regulatory authorities to
audit their records and shall furnish the foregoing authorities with any
information which such authorities may request in order to ascertain
whether Producers are complying with all applicable laws and/or regulations
with respect to sales of the Products. Producers agree to cooperate with
the Insurance Companies and Distributors in resolving all customer
complaints involving Producers and/or Registered Representatives with
respect to the Products.
Without limiting the foregoing: (i) an Insurance Company or Distributors
will promptly notify Producers of any customer complaint or notice of any
regulatory inspection, inquiry, investigation or proceeding or judicial
proceeding received by the Insurance Company or Distributors with respect
to the Producers or Registered Representatives concerning the Products; and
(ii) Producers will promptly notify the appropriate Insurance Company or
Distributors of any customer complaint or notice of any regulatory
inspection, inquiry, investigation or proceeding or judicial proceeding
received by Producers with respect to the Insurance Company, Distributors,
Registered Representatives or Producers concerning the Products.
8. Indemnification. Each Insurance Company and Distributors hereby agree to
indemnify and hold harmless Producers and each of their employees,
controlling persons, officers or directors against any losses, expenses
(including reasonable attorneys' fees and court costs), damages or
liabilities to which Producers or such affiliates, controlling persons,
officers or directors become subject, under the Securities Act of 1933 or
otherwise, insofar as such losses, expenses, damages or liabilities (or
actions in respect thereof) arise out of or are based upon the Insurance
Company's or Distributors' performance, non-performance or breach of this
Agreement, or are based upon any untrue statement contained in, or material
omission from, the Prospectus for a Product issued by that Insurance
Company.
Producers shall indemnify and hold harmless the Insurance Companies and
Distributors, their officers, directors, employees, and controlling persons
from and against any damages, losses, liabilities, judgments, settlements,
costs and expenses of any nature whatsoever (including reasonable
attorneys' fees and court costs) or causes of action, asserted or brought
by anyone, resulting or arising out of or based upon an allegation or
finding of: (i) any act or omission of Producers, their employees,
Registered Representatives, associated persons or agents in connection with
the offer or sale of the Products; (ii) any misrepresentation, breach of
warranty or failure to fulfill any covenant, warranty, or obligation made
or undertaken by Producers hereunder; or (iii) any breach or violation of
any of the administrative policies communicated by an Insurance Company or
Distributors to Producers.
9. Payments by Customers. All money payable in connection with the Products,
whether as premium or otherwise, and whether paid by or on behalf of the
owner of any Product or anyone else having an interest in the Products, is
the exclusive property of the appropriate Insurance Company and shall be
drawn payable to Massachusetts Mutual Life Insurance Company, MML Bay State
Life Insurance Company, or C.M. Life Insurance Company, as appropriate.
Such payments shall be promptly transmitted to the
5
<PAGE>
appropriate Insurance Company and shall not be commingled with Producers'
personal funds. Producers are not authorized to deduct commissions, service
fees, allowances or any other offset for compensation claimed by Producers
from such payments. No cash payments shall be accepted by Producers in
connection with the Products.
10. Submission of Applications. Broker-Dealer shall review all applications for
completeness and suitability to ensure that the application complies with
all requirements set forth in the current Prospectus and other
administrative rules established by the Insurance Companies before
submitting such applications to the Insurance Companies. Producers shall
make available to the appropriate Insurance Company all information,
whether favorable or unfavorable, which comes into Producers' possession
concerning the underwriting of any risks under a Product. Producers shall
follow established Insurance Company administrative procedures with regard
to the processing of applications and related documents. The Insurance
Companies will, as appropriate, advise Producers of these procedures.
All applications, enrollment forms, and other Insurance Company forms
received by Producers in connection with the Products shall be forwarded to
the appropriate Insurance Company's designated office promptly after
receipt by the Producers. All such documents shall be on forms supplied by
the appropriate Insurance Company and are subject to acceptance or
rejection by Distributors and the appropriate Insurance Company in their
sole discretion. If an application or payment is rejected by an Insurance
Company or Distributors and Broker-Dealer has received compensation based
on the rejected payment or application, Broker-Dealer shall promptly repay
such compensation to the appropriate Insurance Company.
11. Fidelity Bond. Producers represent that all of their directors, officers,
employees and Registered Representatives are and shall be continuously
covered by a blanket fidelity bond, including coverage for larceny and
embezzlement, issued by a reputable bonding company. This bond shall be
maintained at Producers' expense and shall be, at least, of the form, type
and amount required under the NASD Conduct Rules. Distributors may require
evidence, satisfactory to it, that such coverage is in force, and Producers
shall give prompt written notice to Distributors of any cancellation or
change of coverage.
Producers hereby assign any proceeds received from the fidelity bonding
company to the Insurance Company and Distributors to the extent of the
Insurance Company's and Distributors' loss due to activities covered by the
bond. If there is any deficiency amount, whether due to a deductible or
otherwise, Producers shall promptly pay the Insurance Company or
Distributors such amount on demand. Producers hereby agree to indemnify and
hold harmless the Insurance Companies and Distributors from any such
deficiency and from the costs of collection (including reasonable
attorneys' fees).
12. Independent Contractors. Producers and their Registered Representatives are
independent contractors with respect to the Insurance Companies and
Distributors and shall not have the right to hold themselves out as
employees, partners, or joint venturers of the Insurance Companies or
Distributors in connection with the solicitation of the Products or
otherwise. Producers may exercise their own judgment as to the time and
manner and performance of their services, except that they shall conform
with the rules, regulations and policies of the Insurance Companies and
Distributors at all times.
13. Limitations on Authority. Producers and Registered Representatives are not
authorized and are expressly forbidden on behalf of the Insurance Companies
to make, alter, modify, waive or change any of the terms, rates or
conditions of any Insurance Company's forms, Products, contracts or
advertising materials. Producers shall not discharge any provision(s) of
the Products, waive any forfeitures, grant, permit, or extend the time of
making any payments, guarantee earnings, dividends or rates, alter or
substitute the forms which an Insurance Company may prescribe, incur
indebtedness on behalf of the Insurance Companies or Distributors, or enter
into any proceeding in a court of law or before a regulatory agency in the
name of or on behalf of an Insurance Company or Distributors.
14. Offsets. The Insurance Companies and Distributors may deduct from any
compensation due under this Agreement any debt, whether arising under
Sections 8 or 10 of this Agreement or otherwise, of Producers
6
<PAGE>
to an Insurance Company or to Distributors or any of their affiliates or
subsidiaries. This right of offset is in addition to all other rights the
Insurance Companies and Distributors may have at law or in equity regarding
the collection of debts generally.
15. Notices. All notices or communications to an Insurance Company shall be
sent to: Massachusetts Mutual Life Insurance Company, 140 Garden Street,
Hartford, Connecticut 06154, Attn: Annuity Strategic Business. All notices
sent to Distributors shall be sent to: MML Distributors, LLC, 1414 Main
Street, Springfield, Massachusetts 01144, Attn: Chief Legal Officer. All
notices or communications to Producers shall be sent to the addresses set
forth on the applicable Schedule pages of this Agreement. Any party may
change the address to which notices or communications are to be sent by
giving written notice to the other parties.
16. Term of Agreement. This Agreement shall be effective as of the latest date
appearing on the signature page hereof and shall continue until terminated.
This Agreement shall be terminated immediately if Producers materially
breach this Agreement or if Broker-Dealer shall cease to be registered
under the Exchange Act or be a member in good standing of the NASD. Any
party may terminate this Agreement at any time, without cause, upon written
notice to the other parties. Upon termination of this Agreement, all
authorizations, rights and obligations shall cease except Sections 6(j), 7,
8, 10 and 14 of this Agreement shall survive the termination of this
Agreement, and Producers shall settle all accounts with the Insurance
Companies and shall continue to be responsible for all applicable
chargebacks. Upon termination of this Agreement, Producers shall be
entitled to receive all commissions on Products issued on applications
received by an Insurance Company prior to such termination subject to the
provisions of Section 14 of this Agreement.
17. Amendments. The Insurance Companies and Distributors reserve the
unconditional right to modify the Products, to amend this Agreement and the
Schedules attached hereto, and to suspend the sale of any of the Products
at any time. The submission of an application by Producers after notice of
any such amendment has been sent to Producers shall constitute the
Producers' agreement to any such amendment.
18. Miscellaneous.
a. This Agreement shall be binding on and shall inure to the benefit of
the parties hereto and their respective heirs, administrators,
executors, estates, successors and assigns provided that Producers may
not assign or amend this Agreement or any rights or obligations
hereunder without the prior written consent of Distributors and the
Insurance Companies.
b. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts and constitutes the entire agreement and understanding
between the parties hereto with respect to the Products.
c. Failure of any party to insist upon strict compliance with any of the
conditions of this Agreement shall not be construed as a waiver of
such conditions and no waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other
provisions.
d. This Agreement may be executed in one or more counterparts, each of
which shall be deemed in all respects an original.
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed.
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: Date:
--------------------------------- ------------------------
Its:
MML BAY STATE LIFE INSURANCE COMPANY C.M. LIFE INSURANCE COMPANY
By: By:
--------------------------------- --------------------------
MML DISTRIBUTORS, LLC.
By:
---------------------------------
Kenneth M. Rickson, President
Date:
- ------------------------------------ ------------------------
Print Name of BROKER-DEALER Above
- ------------------------------------
Authorized Officer Sign Above
Date:
- ------------------------------------ ------------------------
Print Name of AGENCY Above
- ------------------------------------
Authorized Officer Sign Above
8
<PAGE>
Exhibit 1(A)(5)
Massachusetts Mutual Life Insurance Company
Springfield, MA 01111-0001
Flexible Premium Variable Adjustable Life Insurance Policy
- --------------------------------------------------------------------------------
POLICY NUMBER [0 000 000]
INSURED [JOHN A DOE]
SELECTED FACE AMOUNT [$100,000]
- --------------------------------------------------------------------------------
Dear Policy Owner:
READ YOUR POLICY CAREFULLY. It has been written in readable language to help you
understand its terms. We have used examples to explain some of its provisions.
These examples do not reflect the actual amounts or status of this policy. As
you read through this policy, remember the words "you" and "your" refer to the
Owner and "we", "Us" and "our" refer to Massachusetts Mutual Life Insurance
Company.
We will, subject to the terms of this policy, pay the death benefit to the
Beneficiary when due proof of the Insured's death is received at our Home
Office. The terms of this policy are contained on this and the following pages,
together with attached application(s).
For service or information on this policy, contact the agent who sold this
policy, any of our agency offices or our Home Office.
YOU HAVE A RIGHT TO RETURN THIS POLICY. If you decide not to keep this policy,
return it within 10 days after you receive it. The policy may be returned by
delivering or mailing it to our Home Office, to any of our agency offices, or to
the agent who sold this policy. Then, this policy will be as though it had never
been issued. We will promptly refund: (a) any premium paid for this policy; plus
(b) interest credited to this policy under the Guaranteed Principal Account;
plus or minus (c) an amount that reflects the investment experience of the
investment divisions of the Separate Account under this policy to the date this
policy is received by Us; minus (d) any amounts borrowed or withdrawn.
Signed for Massachusetts Mutual Life Insurance Company.
Sincerely yours,
President Secretary
This Policy provides that: Insurance is payable when the Insured dies.
Within specified limits, flexible premiums
may be paid during the Insured's lifetime.
Annual dividends may be paid.
The amount of death benefit and the duration of insurance coverage may be fixed
or variable as described in Parts 3 and 5. The variable account value of this
policy may increase or decrease in accordance with the experience of the
Separate Account. There are no minimum guarantees as to the variable account
value.
The account value of the Guaranteed Principal Account of this policy earns
interest at a rate not less than the minimum described in the Interest On
Account Value Of The Guaranteed Principal Account provision.
<PAGE>
Policy Summary
This Summary briefly describes some of the major policy provisions. Since it
does not go into detail, the actual provisions will control. See those
provisions for full information and any limits that may apply. The "Where To
Find It" on the inside of the back cover shows where these provisions may be
found.
This is a variable adjustable life insurance policy. We will pay a death benefit
if the Insured dies while this policy is in force. "In force" means that the
insurance has not terminated. "Variable" means that all values which depend on
the investment performance of the Separate Account Division shown on the
Schedule Page are not guaranteed as to dollar amount.
Premiums for this policy are flexible. After the First Premium has been paid,
there is no requirement that any specific amount of premium be paid on any date.
Instead, within the limits stated in this policy, any amount may be paid on any
date before the death of the Insured.
Premiums are applied to increase the value of this policy. Monthly charges are
deducted from the value of this policy each month. If there is not enough value
to pay the monthly charges for a month, this policy will terminate at the end of
61 days. There is, however, a right to reinstate this policy.
There are other rights available to you while the Insured is living. These
include:
. The right to assign this policy.
. The right to change the Owner or Beneficiary.
. The right to surrender this policy.
. The right to make withdrawals.
. The right to make loans.
. The right to increase the Selected Face Amount.
. The right to allocate Net Premiums among the Guaranteed Principal Account
and the divisions of the Separate Account.
. The right to transfer values among the Guaranteed Principal Account and the
divisions of the Separate Account.
. The right to change the Death Benefit Option.
The policy also includes a number of Payment Options. These provide alternate
ways to pay the death benefit or the amount payable upon surrender of this
policy.
<PAGE>
[THE SCHEDULE PAGE
THIS PAGE SHOWS SPECIFIC INFORMATION ABOUT THIS POLICY AND IS REFERRED TO
THROUGHOUT THE POLICY
POLICY NUMBER [0 000 000]
INSURED [JOHN A DOE]
SELECTED FACE AMOUNT [$100,000]
ISSUE DATE [DEC 01 1998]
POLICY DATE [DEC 01 1998]
PAID-UP POLICY DATE [DEC 01 2063]
INSURED'S AGE ON POLICY DATE [35 MALE]
- --------------------------------------------------------------------------------
BASIC POLICY INFORMATION
- ------------------------
<TABLE>
<CAPTION>
SELECTED MINIMUM DEATH
PLAN FACE AMOUNT FACE AMOUNT BENEFIT OPTION
- ---- ----------- ----------- --------------
<S> <C> <C> <C>
FLEXIBLE PREMIUM SEE MINIMUM FACE [1]
VARIABLE ADJUSTABLE LIFE [$100,000] AMOUNT PROVISION
INSURANCE POLICY
</TABLE>
- --------------------------------------------------------------------------------
PREMIUM INFORMATION [AS OF DEC 01 1998]
FIRST PREMIUM [$1,000.00]
PLANNED ANNUAL PREMIUM [$1,000.00]
ANNUAL CUTOFF POLICY PREMIUM [$3680.00]
MONTHLY SAFETY TEST PREMIUM [$110.54]
SAFETY TEST PERIOD EXPIRATION DATE [DEC 01 2033]
[FOR THE FIRST SEVEN POLICY YEARS THE SALES LOAD COMPONENT OF THE PREMIUM LOAD
IS 10% OF THE PREMIUM UP TO THE ANNUAL CUTOFF POLICY PREMIUM. THIS LOAD
DECREASES AFTER THE SEVENTH POLICY YEAR TO 2.5%. FOR POLICY PREMIUMS IN EXCESS
OF THE ANNUAL CUTOFF POLICY PREMIUM, THE SALES LOAD WILL BE 1% FOR ALL POLICY
YEARS.
THEREFORE, NET PREMIUM WILL BE:
[90.0%] OF PREMIUM PAID MINUS THE SUM OF (1) A PERCENTAGE EQUAL TO THE
APPLICABLE STATE PREMIUM TAX RATE, AND (2) A PERCENTAGE REPRESENTING THE
AMORTIZED FEDERAL DEFERRED ACQUISITION COST TAX OF PREMIUMS UP TO THE ANNUAL
CUTOFF POLICY PREMIUM PAID IN EACH SUCH POLICY YEAR, AND
1
CONTINUED
<PAGE>
[99.0%] OF PREMIUM PAID MINUS THE SUM OF (1) A PERCENTAGE EQUAL TO THE
APPLICABLE STATE PREMIUM TAX RATE, AND (2) A PERCENTAGE REPRESENTING THE
AMORTIZED FEDERAL DEFERRED ACQUISITION COST TAX OF PREMIUMS OVER THE ANNUAL
CUTOFF POLICY PREMIUMS PAID IN EACH SUCH POLICY YEAR.
FOR THE EIGHTH POLICY YEAR AND THEREAFTER, NET PREMIUM WILL BE [97.5%] OF THE
PREMIUM PAID MINUS THE SUM OF (1) A PERCENTAGE EQUAL TO THE APPLICABLE STATE
PREMIUM TAX RATE, AND (2) A PERCENTAGE REPRESENTING THE AMORTIZED FEDERAL
DEFERRED ACQUISITION COST TAX OF PREMIUMS UP TO THE ANNUAL CUTOFF POLICY
PREMIUMS PAID IN THAT POLICY YEAR, AND
[99.0%] OF THE PREMIUM PAID MINUS THE SUM OF (1) A PERCENTAGE EQUAL TO THE
APPLICABLE STATE PREMIUM TAX RATE, AND (2) A PERCENTAGE REPRESENTING THE
AMORTIZED FEDERAL DEFERRED ACQUISITION COST TAX OF PREMIUMS OVER THE ANNUAL
CUTOFF POLICY PREMIUMS PAID IN THAT POLICY YEAR, AND
SALES LOAD REFUND UPON FULL SURRENDER
- -------------------------------------
POLICY YEAR 1: [65%] of the FIRST POLICY YEAR SALES LOAD COLLECTED
POLICY YEAR 2: [30%] of the FIRST POLICY YEAR SALES LOAD COLLECTED
POLICY YEAR 3 AND THEREAFTER: [0%]
[LIMIT ON TOTAL PREMIUM PAYMENT:
- -------------------------------
AS OF ANY DATE, THE MAXIMUM LIMIT ON THE SUM OF PREMIUMS PAID UNDER THIS POLICY
IS THE GREATER OF ITEMS A AND B BELOW. THIS LIMIT MAY BE REVISED IF THE POLICY
IS CHANGED. THESE CHANGES INCLUDE, BUT ARE NOT LIMITED TO, WITHDRAWALS, CHANGING
THE SELECTED FACE AMOUNT OR DEATH BENEFIT OPTION, AND ADDING OR DELETING RIDERS.
IF THE LIMIT IS REVISED, NEW POLICY SPECIFICATIONS WILL BE SENT.
A. $ 14,632.72
B. $1,326.48 MULTIPLIED BY THE RESULT OF ONE (1) PLUS THE NUMBER OF FULL
POLICY YEARS ELAPSED.
WE HAVE THE RIGHT TO PROMPTLY REFUND ANY AMOUNT OF PREMIUM PAID IN A POLICY YEAR
THAT EXCEEDS THE LIMIT ON TOTAL PREMIUM PAYMENT.]
1
CONTINUED
<PAGE>
NET PREMIUM ALLOCATION LIMITATIONS
- ----------------------------------
[NET PREMIUM ALLOCATIONS ARE ONLY ALLOWED AMONG EIGHT DIVISIONS OF THE SEPARATE
ACCOUNT AND THE GUARANTEED PRINCIPAL ACCOUNT AT ANY ONE TIME. TO ALLOCATE NET
PREMIUM TO ONE OR MORE OF THE OTHER DIVISIONS, THERE MUST FIRST BE A TRANSFER OF
100% OF THE ACCOUNT VALUE FROM ONE OR MORE OF THE DIVISIONS TO WHICH ALLOCATIONS
ARE CURRENTLY MADE.]
- --------------------------------------------------------------------------------
LIMITATIONS ON TRANSFERS
- ------------------------
TRANSFERS MAY ONLY BE IN WHOLE NUMBER PERCENTAGES OR DOLLAR AMOUNTS.
THERE IS NO LIMIT ON THE NUMBER OF TRANSFERS ALLOWED AMONG THE DIVISIONS OF THE
SEPARATE ACCOUNT BUT WE RESERVE THE RIGHT TO CHARGE A MAXIMUM FEE OF $10 PER
TRANSFER IF THERE ARE MORE THAN SIX TRANSFERS IN A POLICY YEAR. ONLY ONE
TRANSFER MAY BE MADE FROM THE GUARANTEED PRINCIPAL ACCOUNT IN ANY POLICY YEAR
AND ANY TRANSFER FROM THE GUARANTEED PRINCIPAL ACCOUNT CANNOT BE MORE THAN 25%
OF THE ACCOUNT VALUE OF THE GUARANTEED PRINCIPAL ACCOUNT OF THIS POLICY
(EXCLUDING POLICY LOANS) ON THE DATE THE TRANSFER IS MADE. HOWEVER, IF IN EACH
OF THE PREVIOUS THREE POLICY YEARS 25% OF THE ACCOUNT VALUE OF THE GUARANTEED
PRINCIPAL ACCOUNT HAS BEEN TRANSFERRED AND THERE HAVE BEEN NO PREMIUM PAYMENTS
OR TRANSFERS TO THE GUARANTEED PRINCIPAL ACCOUNT (EXCEPT AS THE RESULT OF A
LOAN), 100% OF THE ACCOUNT VALUE OF THE GUARANTEED PRINCIPAL ACCOUNT OF THIS
POLICY (EXCLUDING POLICY LOANS) MAY BE TRANSFERRED TO THE SEPARATE ACCOUNT.
TRANSFERS OUT OF THE GUARANTEED PRINCIPAL ACCOUNT ARE ONLY ALLOWED DURING THE 31
DAY PERIOD FOLLOWING THE POLICY ANNIVERSARY DATE.
ALL VALUES MAY BE TRANSFERRED TO THE GUARANTEED PRINCIPAL ACCOUNT AT ANY TIME,
REGARDLESS OF THE NUMBER OF TRANSFERS PREVIOUSLY MADE.
THESE LIMITATIONS DO NOT APPLY TO TRANSFERS RESULTING FROM A POLICY LOAN.
AT ANY ONE TIME, THE POLICY ACCOUNT VALUE MAY BE ALLOCATED TO NO MORE THAN EIGHT
DIVISIONS OF THE SEPARATE ACCOUNT AND THE GUARANTEED PRINCIPAL ACCOUNT. TO
TRANSFER ACCOUNT VALUE TO A NINTH DIVISION OF THE SEPARATE ACCOUNT, A TRANSFER
OF 100% OF THE ACCOUNT VALUE FROM ONE OR MORE OF THE EIGHT DIVISION(S) TO WHICH
ALLOCATIONS ARE CURRENTLY MADE WILL BE REQUIRED.
- --------------------------------------------------------------------------------
1
CONTINUED
<PAGE>
OTHER INFORMATION
- -----------------
MONTHLY FACE AMOUNT CHARGE IS [$0.00] FOR TOTAL AMOUNT OF COVERAGE PROVIDED
UNDER THIS POLICY, INCLUDING ANY RIDERS. SEE MONTHLY CHARGES IN PART 3.
AN ADMINISTRATIVE CHARGE IS DEDUCTED FROM THE ACCOUNT VALUE ON EACH MONTHLY
CALCULATION DATE. IT WILL NOT BE MORE THAN [$9.00] PER MONTH.
THIS IS A [NON-TOBACCO] POLICY.
THIS POLICY WAS ISSUED ON A [GUARANTEED ISSUE] UNDERWRITING BASIS.
MINIMUM AMOUNT OF INCREASE ALLOWED ON THE POLICY'S SELECTED FACE AMOUNT IS
[$10,000].
OWNER AND BENEFICIARY - SEE APPLICATION ATTACHED TO AND MADE A PART OF THIS
POLICY.
- --------------------------------------------------------------------------------
BASIS OF COMPUTATION - FOR MAXIMUM MONTHLY MORTALITY CHARGES, AND MINIMUM ANNUAL
- --------------------
INTEREST RATE FOR THE GUARANTEED PRINCIPAL ACCOUNT.
MORTALITY TABLE - [125% TIMES THE COMMISSIONER'S 1980 STANDARD ORDINARY
NON-SMOKER MORTALITY TABLE - MALE].
MINIMUM ANNUAL INTEREST RATE ON THE GUARANTEED PRINCIPAL ACCOUNT VALUE--3% PER
YEAR.
NET INVESTMENT FACTOR ASSET CHARGE - NOT MORE THAN [.000027262] FOR EACH DAY OF
VALUATION PERIOD. SEE NET INVESTMENT FACTOR IN PART 7.]
1
CONTINUED
<PAGE>
[SEPARATE ACCOUNT INFORMATION
- -----------------------------
THE SEPARATE ACCOUNT REFERRED TO IN THIS POLICY IS MASSACHUSETTS MUTUAL
VARIABLE LIFE SEPARATE ACCOUNT I.
THE DIVISIONS OF THE SEPARATE ACCOUNT AVAILABLE UNDER THIS POLICY ARE
MML SMALL CAP VALUE EQUITY DIVISION
MML EQUITY DIVISION
MML EQUITY INDEX DIVISION
MML BLEND DIVISION
MML MANAGED BOND DIVISION
OPPENHEIMER GLOBAL SECURITIES DIVISION
OPPENHEIMER SMALL CAP GROWTH DIVISION
OPPENHEIMER AGGRESSIVE GROWTH DIVISION
OPPENHEIMER GROWTH DIVISION
OPPENHEIMER GROWTH & INCOME DIVISION
OPPENHEIMER MULTIPLE STRATEGIES DIVISION
OPPENHEIMER HIGH INCOME DIVISION
OPPENHEIMER STRATEGIC BOND DIVISION
OPPENHEIMER BOND DIVISION
OPPENHEIMER MONEY DIVISION
PANORAMA INTERNATIONAL EQUITY DIVISION
PANORAMA GROWTH DIVISION
PANORAMA TOTAL RETURN DIVISION
MFS NEW DISCOVERY DIVISION
MFS EMERGING GROWTH DIVISION
MFS RESEARCH DIVISION
T. ROWE PRICE E.S. MID-CAP GROWTH DIVISION
T. ROWE PRICE E.S. NEW AMERICA GROWTH DIVISION
T. ROWE PRICE LIMITED-TERM BOND DIVISION
GOLDMAN SACHS INTERNATIONAL EQUITY DIVISION
GOLDMAN SACHS CAPITAL GROWTH DIVISION
GOLDMAN SACHS MID CAP EQUITY DIVISION
GOLDMAN SACHS CORE U.S. EQUITY DIVISION
GOLDMAN SACHS GROWTH AND INCOME DIVISION
FIDELITY VIP FUND II CONTRAFUND DIVISION]
1
CONTINUED
<PAGE>
THE SCHEDULE PAGE
WAIVER OF MONTHLY CHARGES RIDER
INSURED: [JOHN A DOE]
AGE: [35]
POLICY NUMBER: [0 000 000]
RIDER ISSUE DATE: [DEC 01 1998]
RIDER EFFECTIVE DATE: [DEC 01 1998]
THE WAIVER OF MONTHLY CHARGES RATES ARE FOR EACH $100 OF TOTAL MONTHLY CHARGES.
<TABLE>
<CAPTION>
WAIVER OF WAIVER OF
MONTHLY CHARGES MONTHLY CHARGES
ATTAINED AGE RATE ATTAINED AGE RATE
------------ ---- ------------ ----
<S> <C> <C> <C>
35 5.48387 50 11.63344
36 5.88290 51 11.80917
37 6.28194 52 11.98492
38 6.84105 53 11.79319
39 7.40017 54 11.60146
40 7.95928 55 11.40974
41 8.51840 56 11.21801
42 9.07751 57 11.02628
43 9.48325 58 10.28333
44 9.88899 59 9.54038
45 10.29473 60 8.79743
46 10.70047 61 8.05447
47 11.10621 62 7.31152
48 11.28195 63 7.31152
49 11.45769 64 7.31152
</TABLE>
1
CONTINUED
<PAGE>
THE SCHEDULE PAGE
SUPPLEMENTAL MONTHLY TERM INSURANCE RIDER
INSURED: [JOHN A DOE]
AGE: [35]
POLICY NUMBER: [0 000 000]
TERM RIDER SELECTED
FACE AMOUNT: $[000000]
RIDER ISSUE DATE: [DEC 01 1998]
RIDER EFFECTIVE DATE: [DEC 01 1998]
RIDER EXPIRATION DATE: [DEC 01 2033]
MINIMUM AMOUNT OF INCREASE ALLOWED ON THE TERM RIDER SELECTED FACE AMOUNT IS
[$10,000].
THESE MAXIMUM MONTHLY TERM RIDER CHARGES ARE FOR EACH $1,000 OF INSURANCE WHICH
REQUIRES A CHARGE.
<TABLE>
<CAPTION>
POLICY MAXIMUM POLICY MAXIMUM
YEAR MONTHLY YEAR MONTHLY
---- TERM RIDER ---- TERM RIDER
BEGINNING ---------- BEGINNING ----------
--------- CHARGE --------- CHARGE
------ ------
<S> <C> <C> <C>
DEC 01 1998 0.17624 DEC 01 2018 0.81893
DEC 01 1999 0.18460 DEC 01 2019 0.90425
DEC 01 2000 0.19608 DEC 01 2020 0.99495
DEC 01 2001 0.20862 DEC 01 2021 1.09314
DEC 01 2002 0.22324 DEC 01 2022 1.20416
DEC 01 2003 0.23891 DEC 01 2023 1.32806
DEC 01 2004 0.25772 DEC 01 2024 1.46596
DEC 01 2005 0.27654 DEC 01 2025 1.62325
DEC 01 2006 0.29850 DEC 01 2026 1.80325
DEC 01 2007 0.32046 DEC 01 2027 2.00719
DEC 01 2008 0.34461 DEC 01 2028 2.23312
DEC 01 2009 0.37487 DEC 01 2029 2.47692
DEC 01 2010 0.40523 DEC 01 2030 2.74200
DEC 01 2011 0.43770 DEC 01 2031 3.02749
DEC 01 2012 0.47438 DEC 01 2032 3.34015
DEC 01 2013 0.51317
DEC 01 2014 0.55932
DEC 01 2015 0.61285
DEC 01 2016 0.67272
DEC 01 2017 0.74211
</TABLE>
1
CONTINUED
<PAGE>
TABLE OF MAXIMUM MONTHLY MORTALITY CHARGES
THESE MAXIMUM MONTHLY MORTALITY CHARGES ARE FOR EACH $1,000 OF
INSURANCE WHICH REQUIRES A CHARGE.
<TABLE>
<CAPTION>
POLICY POLICY MAXIMUM
YEAR MAXIMUM YEAR MONTHLY
---- MONTHLY ---- MORTALITY
BEGINNING MORTALITY CHARGE BEGINNING CHARGE
--------- ---------------- --------- ------
<S> <C> <C> <C>
DEC 01 1998 0.17624 DEC 01 2033 3.69450
DEC 01 1999 0.18460 DEC 01 2034 4.16365
DEC 01 2000 0.19608 DEC 01 2035 4.56601
DEC 01 2001 0.20862 DEC 01 2036 5.10725
DEC 01 2002 0.22324 DEC 01 2037 5.71958
DEC 01 2003 0.23891 DEC 01 2038 6.38205
DEC 01 2004 0.25772 DEC 01 2039 7.09361
DEC 01 2005 0.27654 DEC 01 2040 7.84867
DEC 01 2006 0.29850 DEC 01 2041 8.64026
DEC 01 2007 0.32046 DEC 01 2042 9.48947
DEC 01 2008 0.34461 DEC 01 2043 10.43146
DEC 01 2009 0.37487 DEC 01 2044 11.49371
DEC 01 2010 0.40523 DEC 01 2045 12.71170
DEC 01 2011 0.43770 DEC 01 2046 14.10759
DEC 01 2012 0.47438 DEC 01 2047 15.66266
DEC 01 2013 0.51317 DEC 01 2048 17.34956
DEC 01 2014 0.55932 DEC 01 2049 19.14157
DEC 01 2015 0.61285 DEC 01 2050 21.02873
DEC 01 2016 0.67272 DEC 01 2051 22.9775
DEC 01 2017 0.74211 DEC 01 2052 25.01935
DEC 01 2018 0.81893 DEC 01 2053 27.18899
DEC 01 2019 0.90425 DEC 01 2054 29.53388
DEC 01 2020 0.99495 DEC 01 2055 32.14810
DEC 01 2021 1.09314 DEC 01 2056 35.17233
DEC 01 2022 1.20416 DEC 01 2057 39.19368
DEC 01 2023 1.32806 DEC 01 2058 45.31279
DEC 01 2024 1.46596 DEC 01 2059 56.12244
DEC 01 2025 1.62325 DEC 01 2060 79.40467
DEC 01 2026 1.80325 DEC 01 2061 83.33333
DEC 01 2027 2.00719 DEC 01 2062 83.33333
DEC 01 2028 2.23312 DEC 01 2063 -0-
DEC 01 2029 2.47692
DEC 01 2030 2.74200
DEC 01 2031 3.02749
DEC 01 2032 3.34015
</TABLE>
2
<PAGE>
TABLE OF MINIMUM FACE AMOUNT PERCENTAGES
CASH VALUE ACCUMULATION TEST
THE MINIMUM FACE AMOUNT ON ANY DATE IS A PERCENTAGE OF THE ACCOUNT
VALUE ON THAT DATE. THE PERCENTAGES WHICH APPLY ARE SHOWN BELOW.
<TABLE>
<CAPTION>
POLICY YEAR MINIMUM FACE POLICY YEAR MINIMUM FACE
BEGINNING AMOUNT PERCENTAGE BEGINNING AMOUNT PERCENTAGE
--------- ----------------- --------- -----------------
<S> <C> <C> <C>
DEC 01 1998 438% DEC 01 2033 155%
DEC 01 1999 424 DEC 01 2034 152
DEC 01 2000 410 DEC 01 2035 148
DEC 01 2001 396 DEC 01 2036 145
DEC 01 2002 383 DEC 01 2037 143
DEC 01 2003 370 DEC 01 2038 140
DEC 01 2004 358 DEC 01 2039 138
DEC 01 2005 347 DEC 01 2040 135
DEC 01 2006 335 DEC 01 2041 133
DEC 01 2007 324 DEC 01 2042 131
DEC 01 2008 314 DEC 01 2043 129
DEC 01 2009 304 DEC 01 2044 127
DEC 01 2010 294 DEC 01 2045 126
DEC 01 2011 285 DEC 01 2046 124
DEC 01 2012 276 DEC 01 2047 123
DEC 01 2013 268 DEC 01 2048 121
DEC 01 2014 259 DEC 01 2049 120
DEC 01 2015 251 DEC 01 2050 119
DEC 01 2016 244 DEC 01 2051 118
DEC 01 2017 236 DEC 01 2052 117
DEC 01 2018 229 DEC 01 2053 116
DEC 01 2019 223 DEC 01 2054 115
DEC 01 2020 216 DEC 01 2055 114
DEC 01 2021 210 DEC 01 2056 112
DEC 01 2022 204 DEC 01 2057 111
DEC 01 2023 199 DEC 01 2058 110
DEC 01 2024 193 DEC 01 2059 109
DEC 01 2025 188 DEC 01 2060 107
DEC 01 2026 183 DEC 01 2061 106
DEC 01 2027 179 DEC 01 2062 104
DEC 01 2028 174 DEC 01 2063 100
DEC 01 2029 170
DEC 01 2030 166
DEC 01 2031 162
DEC 01 2032 158
</TABLE>
3
<PAGE>
TABLE OF MINIMUM FACE AMOUNT PERCENTAGES
GUIDELINE PREMIUM TEST
THE MINIMUM FACE AMOUNT ON ANY DATE IS A PERCENTAGE OF THE ACCOUNT
VALUE ON THAT DATE. THE PERCENTAGES WHICH APPLY ARE SHOWN BELOW.
<TABLE>
<CAPTION>
POLICY YEAR MINIMUM FACE POLICY YEAR MINIMUM FACE
BEGINNING AMOUNT PERCENTAGE BEGINNING AMOUNT PERCENTAGE
--------- ----------------- --------- -----------------
<S> <C> <C> <C>
DEC 01 1998 250% DEC 01 2033 115%
DEC 01 1999 250 DEC 01 2034 113
DEC 01 2000 250 DEC 01 2035 111
DEC 01 2001 250 DEC 01 2036 109
DEC 01 2002 250 DEC 01 2037 107
DEC 01 2003 250 DEC 01 2038 105
DEC 01 2004 243 DEC 01 2039 105
DEC 01 2005 236 DEC 01 2040 105
DEC 01 2006 229 DEC 01 2041 105
DEC 01 2007 222 DEC 01 2042 105
DEC 01 2008 215 DEC 01 2043 105
DEC 01 2009 209 DEC 01 2044 105
DEC 01 2010 203 DEC 01 2045 105
DEC 01 2011 197 DEC 01 2046 105
DEC 01 2012 191 DEC 01 2047 105
DEC 01 2013 185 DEC 01 2048 105
DEC 01 2014 178 DEC 01 2049 105
DEC 01 2015 171 DEC 01 2050 105
DEC 01 2016 164 DEC 01 2051 105
DEC 01 2017 157 DEC 01 2052 105
DEC 01 2018 150 DEC 01 2053 105
DEC 01 2019 146 DEC 01 2054 104
DEC 01 2020 142 DEC 01 2055 103
DEC 01 2021 138 DEC 01 2056 102
DEC 01 2022 134 DEC 01 2057 101
DEC 01 2023 130 DEC 01 2058 100
DEC 01 2024 128 DEC 01 2059 100
DEC 01 2025 126 DEC 01 2060 100
DEC 01 2026 124 DEC 01 2061 100
DEC 01 2027 122 DEC 01 2062 100
DEC 01 2028 120 DEC 01 2063 100
DEC 01 2029 119
DEC 01 2030 118
DEC 01 2031 117
DEC 01 2032 116
</TABLE>
3
<PAGE>
Part l. The Basics Of This Policy
In this Part we discuss some insurance concepts that are
necessary to understand this policy.
The Parties Involved - The Owner is the person who owns this policy, as shown
Owner, Insured, on our records.
Irrevocable
Beneficiary Insured is the person whose life this policy insures.
The Insured may be the Owner of this policy, or someone
else may be the Owner.
Example: Your employer buys a policy that insures
your life and names you as Owner. In this case,
you are both the Insured and Owner. If your
employer names itself as Owner, then the
Insured and Owner are different people.
A Beneficiary is any person named on our records to
receive insurance proceeds after the Insured dies. There
may be different classes of Beneficiaries, such as
primary and secondary. These classes set the order of
payment. There may be more than one Beneficiary in a
class.
Example: Debbie is named as primary (first)
Beneficiary. Anne and Scott are named as
Beneficiaries in the secondary class. If Debbie
is alive when the Insured dies, she receives the
death benefit. But if Debbie is dead and Anne
and Scott are alive when the Insured dies, Anne
and Scott receive the death benefit.
Any Beneficiary may be named an Irrevocable Beneficiary.
An Irrevocable Beneficiary is one whose consent is
needed to change that Beneficiary. Also, this
Beneficiary must consent to the exercise of certain
other rights.
Dates - Policy Date, The Policy Date is shown on the Schedule Page. It is the
Policy Anniversary starting point for determining Policy Anniversary Dates
Date, Policy Year, and Policy Years. The first Policy Anniversary Date is
Issue Date, Paid-up one year after the Policy Date. The period from the
Policy Date, Monthly Policy Date to the first Policy Anniversary Date, or
Calculation Date, form one Policy anniversary Date to the next, is called
Valuation Date, a Policy Year.
Valuation Period,
Valuation Time, Example: The Policy Date is June 10, 19X1. The
Register Date first Policy Anniversary Date is June 10, 19X2.
The period from June 10, 19X1 through June 9,
19X2 is a Policy Year.
The Issue Date is also shown on the Schedule Page. The
Issue Date is the date from which this policy is in
force if the First Premium has been paid. It is used to
determine the start of the suicide exclusion and
contestability periods. See this Part for a discussion
of the suicide exclusion and contestability periods.
4
<PAGE>
The Paid-up Policy Date is also shown on the Schedule
Page. It is the Policy Anniversary Date nearest the
Insured's 100th birthday. On this Date, the Selected
Face Amount changes to equal the account value
multiplied by a factor. This factor is guaranteed to be
not less than one. On this Date and thereafter, the
Death Benefit Option will be Death Benefit Option #1. As
of this date and thereafter, monthly charges will
continue to be deducted from the account value of this
Policy but mortality charges will equal $0. Premium
payments will no longer be accepted. The payment of
Planned Annual Premiums does not guarantee that this
policy will continue in force to the Paid-up Policy
Date.
The Monthly Calculation Date is the monthly date on
which monthly charges for this policy are due. The first
Monthly Calculation Date is the Policy Date. Subsequent
Monthly Calculation Dates are the same day of each month
thereafter.
A Valuation Date is any date on which the New York Stock
Exchange (or its successor) is open for trading. A
Valuation Period is the period of time from the end of
one Valuation Date to the end of the next Valuation
Date. A Valuation Time is the time the New York Stock
Exchange (or its successor) closes on a Valuation Date.
All actions will be performed as of the Valuation Time.
The Register Date is the date on which the first Net
Premium payment for this policy is allocated to the
Separate Account or the Guaranteed Principal Account. It
is the Valuation Date which is on, or next follows, the
later of:
. The date on which we receive a completed Part 1
of the application for this policy together with
all other required information at our Home Office
in a form satisfactory to Us; and
. The date on which we receive the First Premium
for this policy at our Home Office.
Safety Test Period
The Safety Test Period is a period of time where we
guarantee that this Policy will stay in force subject to
the conditions described in Part 3 of this policy. The
Safety Test Period expiration date is shown on the
Schedule Page of this policy. This date is the later of
the Policy Anniversary Date nearest insured's 70th
birthday, or the tenth Policy Anniversary Date.
Monthly Safety Test
Premium The Monthly Safety Test Premium is a premium measurement
used in the Safety Test. The Safety Test is described in
Part 3 of this policy. The Monthly Safety Test Premium
is shown on the Schedule Page of this policy.
5
<PAGE>
Policy Is A Legal This policy is a legal contract between the Owner
Contract and Us. The entire contract consists of the application
and the policy, which includes any applicable riders
attached to the policy. We have issued this policy in
return for the application and the payment of the First
Premium. Any changes or waiver of its terms must be in
writing and signed by our Secretary or an Assistant
Secretary to be effective.
Representations And We rely on all statements made by or for the Insured in
Contestability the application(s). Those statements are considered to
be representations and not warranties. We reserve the
right to bring legal action to contest the validity of
this policy, or any increase in the Selected Face Amount
applied for after the Issue Date, for any material
misrepresentation of a fact. To do so, however, the
misrepresentation must have been made in the
application, or in a supplemental application to
increase the Selected Face Amount, and a copy of the
application must have been attached to this policy when
issued, or made a part of this policy when the increase
in the Selected Face Amount became effective.
Except for any increase in the Selected Face Amount
applied for after the Issue Date, we can not contest the
validity of this policy after it has been in force
during the lifetime of the Insured for a period of two
years from its Issue Date. We can not contest the
validity of any increase in the Selected Face Amount
applied for after the Issue Date once it has been in
effect during the lifetime of the Insured for a period
of two years. We can not contest the validity of any
reinstatement of this policy once it has been in force
during the lifetime of the Insured for a period of two
years after the date of reinstatement
Suicide Exclusion If the Insured commits suicide, while sane or insane,
within 2 years after the Issue Date of this policy and
while this policy is in force, this policy will
terminate. In this case, we will pay a limited death
benefit equal to the amount of premiums paid for this
policy, less any policy debt and amounts withdrawn.
If the Insured commits suicide, while sane or insane,
within 2 years after this policy is reinstated and while
this policy is in force, this policy will terminate. In
this case, we will pay a limited death benefit equal to
the amount of premiums paid to reinstate this policy and
any premiums paid thereafter, less any policy debt and
amounts withdrawn.
If the Insured commits suicide, while sane or insane,
within 2 years after the effective date of any increase
in the Selected Face Amount, the increase will
terminate. In this case, we will pay a limited death
benefit equal to the monthly charges made for that
increase. However, if a limited benefit as described in
either of the two preceding paragraphs is payable, there
will be no death benefit for the increase.
Any limited death benefit will be paid in one sum to the
Beneficiary.
6
<PAGE>
Misstatement Of Age If the Insured's date of birth or gender as given in the
Or Gender application is not correct, an adjustment will be made.
If the adjustment is made after the Insured dies, the
death benefit will reflect the amount provided by the
most recent mortality charge according to the correct
age and gender. If the adjustment is made before the
Insured dies, then future monthly deductions will be
based on the correct age and gender.
Meaning Of In "In force" means that the insurance provided by this
Force policy has not terminated. This policy will be in force
from its Issue Date or, if later, the date the First
Premium is paid.
This policy will continue in force until the death of
the Insured if:
. The account value less any policy debt is
sufficient to cover the monthly charges due on
each Monthly Calculation Date, or this policy
meets the Safety Test; and
. Policy debt does not exceed the account value;
and
. This policy is not surrendered.
The factors which can affect this policy's account
value include:
. The amount and timing of premium payments.
. Any withdrawals or transfers of values.
. Any changes in any riders.
. Any changes in the Selected Face Amount.
. Any outstanding policy debt.
. Any changes in the Death Benefit Option.
. The monthly charges deducted from the
account value.
. The interest earned on the account value
of the Guaranteed Principal Account.
. The net investment experience of the
Separate Account for this policy.
. Any dividends allocated to this policy.
Each of these factors is discussed in detail elsewhere
in this policy.
Home Office Our Home Office is shown on the front cover of this
policy.
7
<PAGE>
Part 2. Premium Payments
Premiums are the payments that may be paid to Us
to increase the account value of this policy.
The First Premium, Minimum The First Premium for this policy is shown on
Net First Premium the Schedule Page. This premium is due on the
Policy Date. The Minimum Net First Premium
equals twelve times the sum of the first monthly
charges. This policy will not be in force until
an amount equal to or in excess of the Minimum
Net First Premium has been paid.
Planned Annual Premiums The Planned Annual Premium for
this policy is shown on the Schedule Page. The
payment of Planned Annual Premiums does not
guarantee that this policy will continue in
force.
Premium Flexibility After the First Premium has been paid, there is
And Premium Notices no requirement that any amount of premium be
paid on any date. Subject to the Limit on Total
Premium Payment shown on the Schedule Page and
while this policy is in force, and subject to
the Right To Refund Premiums provision, any
amount of premium may be paid at any time while
the Insured is living. However, each premium
paid must be at least $100 or, if greater, the
amount needed to prevent termination, as
discussed in the Grace Period And Termination
provision in Part 3.
We will send premium notices for the Planned
Annual Premium. We will stop sending these
notices if no premium has been paid for 36
consecutive months. However, if a premium is
paid after that time, we will send notices for
the Planned Annual Premium again.
We will also send notice of any premium needed
to prevent termination of this policy. Premium
notices will be sent only while this policy is
in force.
Where To Pay Premiums All premiums are payable to Us at our Home
Office or at the place shown for payment on the
premium notice. Upon request, a receipt signed
by our Secretary or an Assistant Secretary will
be given for any premium payment.
Right To Refund Premiums We have the right to promptly refund any amount
of premium paid if application of that premium
to the account value would increase the amount
of insurance which requires a charge.
This policy provides that certain values
(referred to as the variable account values) are
based on the investment performance of the
Separate Account and are not guaranteed as to a
dollar amount.
8
<PAGE>
This policy also provides that other values
(referred to as the account value of the
Guaranteed Principal Account) are based on the
interest credited to the Guaranteed Principal
Account. The account value of this policy is the
variable account value plus the account value of
the Guaranteed Principal Account. This Part
gives information about the Separate Account,
the Guaranteed Principal Account, and the value
and charges connected with them.
Part 3. Accounts, Values, And Charges
Net Premium, A Net Premium is a premium We receive for this
Premium Load policy less the Premium Load charges we deduct
at that time. The Premium Load is the sum of
three components: (1) a Sales Load; (2) the
state premium tax load, and (3) the federal
Deferred Acquisition Cost Tax load. Net Premium,
expressed as a percentage of a premium we
receive, is shown on the Schedule Page.
Allocation Of Net Premiums The allocation of each Net Premium we receive
will be in whole percentages and will be subject
to any Net Premium allocation limitations stated
on the Schedule Page.
Each Net Premium we receive before the Right To
Return period expires, or, if later, the date we
receive written notice that the Owner received
this policy, will be allocated to the
[Oppenheimer Money Division of the Separate
Account.] The Right To Return period is
explained on the front cover of this policy.
Upon the later of the date we receive written
notice that the Owner has received this policy
and the expiration of the Right To Return
period, we will allocate this policy's Account
Value among the Guaranteed Principal Account and
the divisions of the Separate Account. This
allocation will be in accordance with the Net
Premium allocation in effect and subject to the
allocation limitations stated on the Schedule
Page.
Each Net Premium we receive after the Right To
Return period expires, or, if later, the date we
receive written notice that the Owner received
this policy, will be allocated among the
Guaranteed Principal Account and the divisions
of the Separate Account. This allocation will be
in accordance with the Net Premium allocation in
effect and subject to the allocation limitations
stated on the Schedule Page.
The Net Premium allocation initially specified
at the time of application will remain in effect
until changed by any later written election
satisfactory to Us and received at our Home
Office. Any change in the allocation initially
specified at the time of application will be
subject to the allocation limitations stated on
the Schedule Page.
We will allocate the first Net Premium payment
as of the Register Date.
9
<PAGE>
The amount of each Net Premium We receive for
this policy for allocation to each division of
the Separate Account will be applied to purchase
accumulation units for this policy in that
division.
The Separate Account The Separate Account shown on the Schedule Page
is a separate investment account.
The Separate Account has several divisions
available to the Owner. Each division invests in
shares of an investment fund. The divisions and
investment funds available to the Owner are
shown on the Schedule Page.
The values of the assets in the divisions are
variable and are not guaranteed. They depend on
the investment results of the Separate Account
shown on the Schedule Page.
We own the assets of the Separate Account. Those
assets will only be used to support variable
life insurance policies. A portion of the assets
equal to the reserves and other liabilities of
the Separate Account will not be charged with
liabilities that arise from any other business
we may conduct. However, we may transfer assets
which exceed the reserves and other liabilities
of the Separate Account to our general account.
Income, gains, and losses, whether or not
realized, from each division of the Separate
Account are credited to or charged against that
division without regard to any of our other
income, gains, or losses.
Changes In The Separate We have the right to establish additional
Account divisions of the Separate Account, and to
establish other investment options from time to
time. Amounts credited to any additional
divisions established would be invested in
shares of other Funds. For any division, we have
the right to substitute new Funds, merge
existing Funds, or close any divisions to new
investments.
We also reserve the following rights to:
. Create new segments of the Separate
Account;
. Combine any two or more Separate
Accounts;
. Substitute or merge two or more
Divisions or Separate Accounts;
. De-register the Separate Account under
the Investment Company Act of 1940, as
amended, if registration is no longer
required; and
. Change the name of the Separate Account.
We also have the right to close any division of
the Separate Account or any other investment
option.
Subject to applicable law, we have the right to
change the investment policy of any division of
the Separate Account.
We have the right to operate the Separate
Account as a managed investment company under
the Investment Company Act of 1940 or in any
other form permitted by law.
10
<PAGE>
Accumulation Units Accumulation units are used to measure the
variable account value of this policy. The value
of a unit is determined as of the Valuation Time
on each Valuation Date for valuation of the
Separate Account. The value of any unit can vary
from Valuation Date to Valuation Date. That
value reflects the investment performance of the
division of the Separate Account applicable to
that unit.
Purchase And Sale Of Accumulation units will be purchased or sold at
Accumulation Units the unit value as of the Valuation Time on the
Valuation Date of purchase or sale. Accumulation
unit value is discussed in Part 7.
Example: The amount applied is $550. The
date of purchase is June 10, 19X4.
The accumulation unit value on that
date is $10. The number of units
purchased would be 55 ($550 divided
by $10 = 55). If, instead, the unit
value was $11, then the amount
applied would purchase 50 units
($550 divided by $11 = 50).
If we receive a premium or a written request
that causes Us to purchase or sell accumulation
units, and we receive that premium or request
before the Valuation Time on a Valuation Date,
accumulation units will be purchased or sold as
of that Valuation Date. Otherwise, accumulation
units will be purchased or sold as of the next
following Valuation Date.
At the Owner's request, we will purchase or sell
accumulation units as of a later Valuation Date.
In no case will accumulation units be purchased
before the Register Date.
Account Value Of Policy The account value of this policy on any date is
the variable account value of this policy plus
the account value of the Guaranteed Principal
Account of this policy, both determined as of
that date.
Variable Account Value Of The variable account value of this policy
Policy reflects:
. The Net Premiums allocated to the
Separate Account for this policy;
. Any amounts transferred to the Separate
Account for this policy from the
Guaranteed Principal Account;
. Any amounts transferred and withdrawn
from the Separate Account for this
policy;
. Any monthly charges deducted from the
Separate Account for this policy; and
. The net investment experience of the
Separate Account for this policy.
11
<PAGE>
Net Premiums, transfers, withdrawals, and monthly
deductions are all reflected in the variable
account value through the purchase or sale of
accumulation units. The net investment experience
is reflected in the value of the accumulation
units. Net Premiums and monthly deductions are
discussed in this Part. Transfers and withdrawals
are discussed in Part 4.
The value of this policy's accumulation units in a
division of the Separate Account is equal to the
accumulation unit value in that division on the
date the value is determined, multiplied by the
number of those units in that division. How
accumulation unit values are determined is
discussed in Part 7.
The variable account value of this policy on any
date is the total of the values of this policy's
accumulation units in each division of the
Separate Account.
The Guaranteed Principal The Guaranteed Principal Account is part of our
Account general investment account. It has no connection
with, and does not depend on, the investment
performance of the Separate Account.
We have the right to establish additional
guaranteed principal accounts from time to time.
Interest On Account Value The account value of the Guaranteed Principal
Of The Guaranteed Principal Account of this policy earns interest at a rate
Account not less than the minimum annual interest rate
for the Guaranteed Principal Account shown in
the Basis Of Computation section on the Schedule
Page. Interest is earned daily.
For any account value of Guaranteed Principal
Account equal to any policy loan, the interest
rate we use will be the daily equivalent of the
greater of:
. The minimum annual rate; and
. The annual loan interest rate in effect
on the preceding Monthly Calculation
Date less not more than [3.00%].
For any account value of Guaranteed Principal
Account in excess of an amount equal to any
policy loan, the interest rate we use will be the
daily equivalent of the greater of:
. The minimum annual rate; and
. An alternate annual rate established by
Us.
<PAGE>
Monthly Charges Monthly Charges will be deducted from the
account value of this policy. The charges are
due on each Monthly Calculation Date.
The charges will be taken from the divisions of
the Separate Account and from the Guaranteed
Principal Account in proportion to the values of
this policy in each of those divisions and in the
Guaranteed Principal Account (excluding
outstanding policy loans). For each Monthly
Calculation Date, deductions will be made, and
values will be determined, on the Valuation Date
which is on, or next follows, the latest of:
. The Register Date;
. The Monthly Calculation Date; or
. The date We receive the amount of
premium needed to prevent termination in
accordance with the Grace Period And
Termination provision in this Part.
Deductions from the Separate Account are made by
selling accumulation units at their value on the
Valuation Date determined above.
We assess monthly charges of four types:
1. Administrative Charge. The amount of this
charge will be determined by Us. In no case,
however, will it be greater than the maximum
charge shown in the Other Information
section of the Schedule Page.
2. Face Amount Charge. The amount of this
charge is shown in the Other Information
section of the Schedule Page. The charge is
based on the greater of the initial Selected
Face Amount, or the First Premium multiplied
by the applicable Minimum Face Amount
Percentage as shown on the Schedule Page.
This charge will not be based on an amount
greater than $10 million dollars.
3. Mortality Charge. The maximum monthly
mortality charges for each $1,000 of
insurance which requires a charge are shown
in the Table Of Maximum Monthly Mortality
Charges.
We may charge less than the maximum charges
shown in the Table. Any change in these
charges will apply to all policies in the
same class as this policy. The amount of
insurance which requires a charge is
determined as follows. This computation is
made as of the date the charge is due. All
amounts are computed as of that date.
a. We compute the account value after all
additions and deductions other than the
deduction of the mortality charge.
b. We determine the amount of benefit
under the Death Benefit Option in
effect (as discussed in the Death
Benefit Options provision in Part 5).
The Minimum Face Amount used here is
based on the account value computed in
(a) above plus the refund of any Sales
Load that may apply.
<PAGE>
c. We divide the amount of benefit
determined in (b) above by 1 plus the
monthly equivalent (expressed as a
decimal fraction) of the minimum annual
interest rate for the Guaranteed
Principal Account shown in the Basis Of
Computation section on the Schedule
Page.
d. We subtract the account value computed
in (a) above from the amount determined
in (c) above. The result is the amount
of insurance which requires a charge.
4. Rider Charge. The monthly charges for any
rider are shown in a table of charges for
that rider.
Grace Period And Termination This policy may terminate without value if its
account value less any policy debt on a Monthly
Calculation Date cannot cover the monthly
charges due and the Safety Test is not met on
that Date. However, We allow a grace period for
payment of the amount of premium (not less than
$100) needed to avoid termination.
The grace period begins on the date the monthly
charges are due. It ends 61 days after the date or
if later, 31 days after we mail a written notice
to the Owner and to any assignee shown in our
records at their last known addresses. This notice
will state the amount of premium needed to avoid
termination.
During the grace period, this policy will remain
in force. If the insured dies during the grace
period, any unpaid premium amount needed to avoid
termination will be deducted from the death
benefit (see the Amount of Death Benefit provision
in Part 5). This policy will terminate without
value if we do not receive payment of the required
amount by the end of the grace period.
While there is a loan outstanding on this policy,
our right to terminate this policy under the terms
of the Policy Debt Limit provision (See Part 4)
applies in addition to our right under this
provision.
If the account value less policy debt on a Monthly
Calculation Date cannot cover the monthly charges
due, but the Safety Test is met on the Monthly
Calculation Date, then the account value will be
reduced to zero and all monthly charges due and
unpaid will be deducted from your next premium
payment.
Safety Test The Safety Test is met on any given Monthly
Calculation Date provided that the sum of
premiums paid, less any amounts withdrawn, less
any rider charges if applicable, equals or
exceeds the sum of the Monthly Safety Test
Premiums on that Monthly Calculation Date and
all prior Monthly Calculation Dates during the
Safety Test Period. The Safety Test only applies
during the Safety Test Period, which starts on
the Policy Date and expires on the date shown on
the Schedule Page.
During the period in which the Safety Test is met,
this policy will remain
<PAGE>
in force even if there is insufficient account
value to cover the monthly charges provided
that:
. Death Benefit Option 2 or 3 is never
elected; and
. The Insured is not in a substandard
rating class.
If the sum of the premiums paid does not equal or
exceed the Safety Test Premium on any given
Monthly Calculation Date, this Safety Test
provision will expire 31 days after We mail
written notice to the Owner and to any assignee
shown in our records at their last known
addresses. This notice will state the amount of
premium needed to prevent termination of the
Safety Test.
If the premium payment is not received within 31
days, the Safety Test terminates and cannot be
reinstated.
Even if the Safety Test is met, this policy will
terminate if Policy Debt exceeds the account
value. See "Borrowing On This Policy" in Part 4
for a discussion of policy debt.
In accumulating premiums paid, We exclude any
premium amounts refunded under the Right to Refund
Premiums provision in Part 2. Also, We assume in
this test that Safety Test Premiums are calculated
from each Monthly Calculation Date.
Example: On the 6th Monthly Calculation Date, the
monthly charges are $100, but the account value
(during the first 10 Policy Years, the account
value before the deduction for monthly charges,
less any outstanding policy debt) is only $95.
There is no policy debt. The policy is in the
Safety Period, and the Monthly Safety Test Premium
is calculated to be $25. Premium payments of $35
were made on each Monthly Calculation Date
including the current one. There were no
withdrawals. In this case, the Safety Test is met.
We deduct the $95 in monthly charges which reduces
your account value to zero, the remaining $5 in
charges will be deducted on the date of your next
premium payment.
Part 4. Life Benefits
A life insurance policy provides a death benefit
if the Insured dies while this policy is in force.
There are also rights and benefits that are
available before the Insured dies. These "Life
Benefits" are discussed in this Part.
Policy Ownership
Rights Of Owner While the Insured is living, the Owner may
exercise all rights given by this policy or
allowed by Us. These rights include assigning
this policy, changing Beneficiaries, changing
Ownership, taking advantage of all policy
benefits and exercising all policy options.
The consent of any Irrevocable Beneficiary is
needed to exercise any policy right except:
<PAGE>
. The right to exercise dividend rights;
and
. The right to reinstate this policy after
termination.
Assigning This Policy This policy may be assigned. But for any
assignment to be binding on Us, we must receive
a signed copy of it at our Home Office in a form
satisfactory to Us. We will not be responsible
for the validity of any assignment.
Once we receive a signed satisfactory copy, the
rights of the Owner and the interest of any
Beneficiary or any other person will be subject to
the assignment. An assignment is subject to any
policy debt. See "Borrowing On This Policy" in
this Part for a discussion of policy debt.
Changing The Owner Or The Owner or Beneficiary may be changed during
Beneficiary the Insured's lifetime. We do not limit the
number of changes that may be made. To make a
change, a written request satisfactory to Us
must be received at our Home Office. The change
will take effect as of the date the request is
signed, even if the Insured dies before we
receive it. Each change will be subject to any
payment we made or other action we took before
receiving the request.
Transfers Of Values Transfers of values are subject to the
limitations stated on the Schedule Page. Subject
to those limitations, transfers may be made upon
written direction satisfactory to Us received at
our Home Office. These transfers are:
. Transfers of values between divisions of the
Separate Account. These transfers will be
made by selling all or part of the
accumulation units in a division and applying
the value of the units sold to purchase units
in any other division.
. Transfers of values from one or more
divisions of the Separate Account to the
Guaranteed Principal Account. These transfers
will be made by selling all or part of the
accumulation units in a division and applying
the value of the units sold to the Guaranteed
Principal Account.
. Transfers of values from the Guaranteed
Principal Account to one or more divisions of
the Separate Account. These transfers will be
made by applying all or part of the value in
the Guaranteed Principal Account to purchase
accumulation units in one or more divisions
of the Separate Account.
Transfers will be as of the Valuation Date
specified in the Purchase And Sale Of Accumulation
Units provision in Part 3. All transfers made on
one Valuation Date will be considered one
transfer.
This Policy's Share In Dividends
This policy is participating, which means it may
Policy Is Participating share in any dividends we pay.
<PAGE>
Each year we determine how much money can be paid
as dividends. This is called divisible surplus.
We then determine how much of this divisible
surplus is to be allocated to this policy. This
determination is based on this policy's
contribution to divisible surplus. Since we do
not expect this policy to contribute to divisible
surplus, we do not expect that any of that
surplus will be available for allocation to this
policy. If any dividends are allocated to this
policy, they will be payable on Policy
Anniversary Dates.
How Dividends May be Used Dividends may be used in a number of ways. These
are called dividend options. A dividend option
may be elected in the application. It may be
changed at a later time. Although we do not
expect that any dividends will be payable on this
policy, there are four basic dividend options.
Cash - Dividends will be paid in cash.
Dividend Accumulations - Dividends will be
added to the account value. Dividends will be
allocated among the Guaranteed Principal
Account and the divisions of the Separate
Account as directed for Net Premiums.
Paid-Up Additions - Dividends will be used to
buy additional level paid-up insurance.
Reduce Monthly Deductions - Dividends will be
used to reduce the monthly deductions we make
from the account value to pay the monthly
charges.
Dividends will be applied as paid-up additions if
no option is elected.
Dividend After Death If the Insured dies after the first Policy Year,
the death benefit will include a pro rata share
of any dividend allocated to this policy for the
Year death occurs.
Surrendering This Policy And Making Withdrawals
Right To Surrender This policy may be surrendered for its Cash
Surrender Value at any time while the Insured is
living. Surrender will be effective on the date
we receive this policy and a written surrender
request satisfactory to Us at our Home Office. A
later effective date may be elected in the
surrender request.
Cash Surrender Value The Cash Surrender Value is equal to the account
value less any policy debt. If this policy is
surrendered within the first two Policy Years, a
portion of the Sales Load will be refunded to
the Owner as part of the Cash Surrender Value.
The amount of the Sales Load refund is shown on
the Schedule Page.
<PAGE>
Making Withdrawals While the Insured is living, withdrawals may be
made on any Monthly Calculation Date after six
months from the Policy Date. The request for a
withdrawal must be in writing and satisfactory
to Us. It must state the Account (or Accounts)
from which the withdrawal will be made. For any
withdrawal from the Separate Account, the
request must also state the division (or
divisions) from which the withdrawal will be
made. If the Owner does not indicate otherwise,
we will withdraw the amount in proportion to the
values in this policy in each division of the
Separate Account and in the Guaranteed Principal
Account (excluding any outstanding policy loans
on the date of the withdrawal).
The amount of a withdrawal includes the
withdrawal charge that applies. Withdrawals from
the Guaranteed Principal Account will be made by
reducing the value in that Account to provide the
amount of the withdrawal. Withdrawals from a
division (or divisions) of the Separate Account
will be made by selling a sufficient number of
accumulation units to provide the amount of the
withdrawal. Each withdrawal will be subject to
the following rules:
. The minimum amount of a withdrawal is
$100.
. A withdrawal charge of 2% of the amount
withdrawn, but not more than $25, will
be deducted from the amount of the
withdrawal.
. The amount of a withdrawal can never
exceed the Account Value less any policy
debt of this policy, less an amount
equal to 12 multiplied by the most
recent monthly charge made for this
policy.
Unless we receive evidence of insurability
satisfactory to Us, the Selected Face Amount will
be reduced upon withdrawal as needed to prevent
an increase in the amount of insurance that
requires a charge.
Example: You make a withdrawal without furnishing
Us satisfactory evidence of
insurability. Just before the
withdrawal, your policy has a Selected
Face Amount of $50,000 and an account
value of $20,000. The Minimum Face
Amount Percentage for the current Policy
Year is 200%. Under Death Benefit Option
#1, the amount of insurance which
requires a charge is $50,000 minus
$20,000, or $30,000. If you make a
withdrawal of $5,000, the account value
would be reduced to $15,000. The amount
of insurance which requires a charge
would otherwise be increased to $35,000
($50,000 - $15,000). However, the
Selected Face Amount will be reduced
instead to $45,000 and the amount of
insurance which requires a charge will
remain at $30,000. (For simplicity, in
this example the minimum annual interest
rate is assumed to be zero.)
<PAGE>
How We Pay Any withdrawal made will be paid in one sum.
However, if the entire policy is surrendered,
the Cash Surrender Value may be paid in one sum,
or it may be applied under any payment option
elected. See Part 6.
We may delay paying any surrender or withdrawal
value from the Guaranteed Principal Account for
up to six months from the date the request (and
this policy, if needed) is received at our Home
Office.
We may delay paying any surrender or withdrawal
value from the Separate Account during any period
that:
. The New York Stock Exchange (or its
successor) is closed, except for normal
weekend or holiday closings, or trading
is restricted; or
. The Securities and Exchange Commission
(or its successor) determines that a
state of emergency exists; or
. The Securities and Exchange Commission
(or its successor) permits Us to delay
payment.
We will add interest to the surrender or
withdrawal value payment if:
. The payment is delayed for more than ten
working days from the effective date of
surrender or withdrawal; and
. The reason for the delay is other than a
reason stated in the third paragraph of
this provision; and
. The amount of such interest is at least
$25.
If interest is added, the amount of interest will
be the same as would be paid under Option D for
the same period of time. See Part 6 for a
description of Option D.
Borrowing On This Policy
Right To Make Loans Loans can be made on this policy at any time
while the Insured is living. However, this
policy must be properly assigned to Us before
the loan is made. No other collateral is needed.
We refer to all outstanding loans plus accrued
interest as "policy debt."
Effect Of Loan A loan is attributed to each division of the
Separate Account and to the Guaranteed Principal
Account in proportion to the values of this
policy in each of those divisions and in the
Guaranteed Principal Account (excluding any
outstanding policy loans) on the date at the
time of the loan. The amount of the loan
attributed to each division of the Separate
Account will be transferred to the Guaranteed
Principal Account. Any such transfer is made by
selling accumulation units in the division and
applying the value of those units to the
Guaranteed Principal Account on the date the
loan is made. Any interest added to the loan
will be treated as a new loan under this
provision.
The amount equal to any outstanding policy loans
will be held in the Guaranteed Principal Account,
and will earn interest as described in the
Interest On Account Value Of The Guaranteed
Principal Account provision.
<PAGE>
Maximum Loan Available There is a maximum amount that can be borrowed.
It is the account value on the date the loan is
to be made reduced by:
. Any outstanding policy debt; and
. Interest on the loan being made and on
any outstanding policy debt to the next
Policy Anniversary Date; and
. An amount equal to the most recent
monthly charge made for this policy,
multiplied by the number of Monthly
Calculation Dates from the date the loan
is made to and including the next Policy
Anniversary Date.
Interest The interest rate on any loan is 6% per
year. Interest is not due in advance. This
interest accrues (builds up) each day and
becomes part of this policy debt as it accrues.
Interest is due on each Policy Anniversary Date.
If interest is not paid when due, it will be
added to the loan and will bear interest at the
rate payable on the loan.
Example: You have a loan of $1,000. The
interest due on this policy
Anniversary Date is $60. If it is
not paid on that date, we will add
it to the existing loan. The loan
will then be $1,060 and interest
will be charged on this amount from
then on.
Policy Debt Limit Policy debt (which includes accrued interest)
may not exceed the account value. If this limit
is reached, we can terminate this policy, even
if the Safety Test is satisfied. To terminate
for this reason we must mail written notice to
the Owner and any assignee shown on our records
at their last known addresses. This notice will
state an amount that will bring this policy debt
back within the limit. If we do not receive
payment within 31 days after the date we mailed
the notice, this policy will terminate without
value at the end of those 31 days.
Repayment Of Policy Debt All or part of any policy debt may be repaid at
any time while this policy is in force and the
Insured is living.
Any repayment of policy debt will result in the
transfer of values equal to the repayment out of
the Guaranteed Principal Account and the
application of those values to each division of
the Separate Account and to the Guaranteed
Principal Account in proportion to the values of
this policy in each of those divisions and in
the Guaranteed Principal Account (excluding any
outstanding policy loans) at the time of the
repayment.
<PAGE>
Other Borrowing Rules We may delay the granting of any loan
attributable to the Guaranteed Principal Account
for up to six months.
We may delay the granting of any loan
attributable to the Separate Account during any
period that:
. The New York Stock Exchange (or its
successor) is closed, except for normal
weekend or holiday closings, or trading
is restricted; or
. The Securities and Exchange Commission
(or its successor) determines that a
state of emergency exists; or
. The Securities and Exchange Commission
(or its successor) permits Us to delay
payment.
Reinstating This Policy
When Reinstatement Can Be After this policy has terminated, it may be
Made reinstated - that is, put back in force.
However, this policy cannot be reinstated if it
has been surrendered for its Cash Surrender
Value. Reinstatement must be made within five
years after the date of termination and during
the Insured's lifetime.
Requirements To Reinstate Evidence of insurability satisfactory to Us is
required to reinstate. A premium is also
required as a cost to reinstate. That premium
must be no less than the amount necessary to
produce an account value equal to three times
the monthly charges due on the Monthly
Calculation Date which is on, or next follows,
the date of reinstatement.
Change In The Selected Face Amount
Increases In The Selected While this policy is in force, the Selected Face
Face Amount Amount may be increased upon written
application. Evidence of insurability,
satisfactory to Us, may be required for each
increase. Any increase must be at least for the
amount shown on the Schedule Page.
Any increase in the Selected Face Amount will be
effective on the Monthly Calculation Date which
is on, or next follows, the later of:
. The date 15 days after a written request
for such change has been received and
approved by Us; or
. The requested effective date of the
change.
Mortality charges for each increase are
determined and deducted from the account value
in accordance with the Monthly Charges
provision. These charges will be deducted from
the account value beginning on the effective
date of the increase.
<PAGE>
Limitations On Increases No increase in the Selected Face Amount can
become effective:
. Within six months after the Policy Date;
or
. Within six months after any previous
increase; or
. After the Policy Anniversary Date
nearest the Insured's 85th birthday.
Evidence Of Increases If the Selected Face Amount is increased we will
send a copy of the application for the increase
and an amended Schedule Page reflecting that
increase. We will also send any updates to the
Tables pages that may be required. However, we
have the right to require that this policy be
sent to Us so that the increase can be made.
Decreases in the While this policy is in force, the Selected Face
Selected Face Amount Amount may be decreased upon written application
satisfactory to Us. The resulting Selected Face
Amount after decrease must be at least $50,000.
Any requested decrease in the Selected Face
Amount will be effective on the Monthly
Calculation Date which is on, or next follows,
the later of:
. The date 15 days after a written request
for such change has been received and
approved by Us; or
. The requested effective date of the
change
A requested decrease in the Selected Face Amount
is allowed only once per Policy Year.
Right To Transfer This Policy To A Substitute
Insured
Transferring This Policy This policy may be transferred to the life of a
substitute insured. Transfer will be effective
on the Transfer Date discussed in the next
provision. Transfer will be subject to the
following conditions.
. This policy must be in force on the
Transfer Date;
. A written application for the transfer
and payment of any required cost to
transfer must be received by Us at our
Home Office;
. Evidence of insurability of the
substitute insured, satisfactory to Us,
will be required;
. The substitute insured must not have
been under 20 years of age on the
birthday nearest the Policy Date of this
policy;
. The substitute insured must not be over
65 years of age on the birthday nearest
the Transfer Date; and
. The Owner of this policy after it has
been transferred must have an insurable
interest in the life of the substitute
insured.
After transfer, the Policy Date will be the same
as it was before transfer.
<PAGE>
Transfer Date The Transfer Date will be the Policy Anniversary
Date which is on, or next follows, the later of:
. The date we approve the application for
transfer; and
. The date any required cost to transfer
is paid.
The insurance on the previous insured will
continue to, but not including, the Transfer
Date. The insurance on the substitute insured
will take effect on the Transfer Date.
When this policy has been transferred, it will
be modified to show that the contestable and
suicide exclusion periods, as they apply to the
substitute insured, will be measured from the
Transfer Date.
Transfer Method The Selected Face Amount for the substitute
insured will be determined as for a new Insured
under a new policy.
Upon transfer, if the amount of insurance that
requires a charge is greater than the Selected
Face Amount, we will adjust the amount of
insurance that requires a charge to equal the
Selected Face Amount by refunding a portion of
the account value.
The account value immediately after transfer
will be equal to:
. The account value immediately before
transfer; plus
. Any Net Premium necessary to make the
Cash Surrender Value, immediately before
the monthly charges are deducted on the
Transfer Date, at least 12 times the
monthly charges; minus
. Any amount which must be refunded as
discussed in the second paragraph of
this provision; minus
. The monthly charges deducted on the
Transfer Date.
Any charges we deduct on or after the transfer
will be based on the life of the substitute
insured.
Cost To Transfer The cost to transfer is the sum of:
. An administrative fee of $75; and
. Any premium necessary to effect the
transfer method described above; and
. Any excess policy debt as discussed in
the Policy Debt After Transfer
provision.
Policy Debt After Transfer Any policy debt on the Transfer Date will, if
not repaid at that time, remain after transfer.
However, if the amount of that debt is more than
the maximum loan available after transfer, the
excess must be repaid on or before the Transfer
Date.
Assignment Upon Transfer Any assignment of this policy which is in effect
on the Transfer Date will continue to apply
after that Date.
<PAGE>
Reports To Owner
Annual Report Each year, within 30 days after the Policy
Anniversary Date, we will mail a report to the
Owner. There will be no charge for this report.
This report will show the account value at the
beginning of the previous Policy Year and all
premiums paid during that Year. It will also
show the additions to, and deductions from, the
account value during that Year, and the account
value, death benefit, Cash Surrender Value, and
policy debt as of the last Policy Anniversary
Date.
This report will also include any additional
information required by applicable law or
regulation.
Illustrative Report In addition to the annual report, we will, upon
request after the first Policy Year, send an
illustrative report of projected values to the
Owner. We will not charge a fee for providing an
illustrative report on an annual basis. However,
if the Owner requests illustrative reports more
frequently, we may charge a reasonable fee, but
only for those additional reports.
Part 5. The Death Benefit
Amount Of Death Benefit The death benefit is the amount of money we will
pay when we receive due proof at our Home Office
that the Insured died while this policy was in
force. We discuss the death benefit in this
Part.
If the Insured dies while this policy is in
force, the death benefit will be the amount of
benefit provided by the Death Benefit Option in
effect on the date of death, with these
adjustments:
. We add the part of any monthly charge
that applies to a period beyond the date
of death; and
. We deduct:
. Any policy debt outstanding on the date
of death; and
. Any unpaid monthly charges to the date
of death.
Death Benefit Options Three Death Benefit Options, described below,
are available under this policy. The Death
Benefit Option is shown on the Schedule Page and
the Selected Face Amount is shown in the Table
of Selected Face Amounts. The Minimum Face
Amount is discussed in the next provision.
Death Benefit Option #1 - Under this Option, the
amount of benefit is the greater of:
. The Selected Face Amount in effect on
the date of death; or
. The Minimum Face Amount in effect on the
date of death.
<PAGE>
Death Benefit Option #2 - Under this Option, the
amount of benefit is the greater of:
. The Selected Face Amount in effect on
the date of death plus the account value
on the date of death; or
. The Minimum Face Amount in effect on the
date of death.
Death Benefit Option #3 - Under this Option, the
amount of benefit is the greater of:
. The Selected Face Amount in effect on
the date of death plus the sum of all
premiums paid (and not refunded under
the Right To Refund Premiums provision
in Part 2), less any withdrawals to that
date; or
. The Selected Face Amount in effect on
the date of death; or
. The Minimum Face Amount in effect on the
date of death.
Minimum Face Amount In order to qualify as life insurance under the
federal tax laws in effect on the Issue Date,
this policy has a Minimum Face Amount. The
Minimum Face Amount on any date is a percentage
of the account value, plus a refund of Sales
Loads, if applicable, on that date. The
percentage for each Policy Year is shown in the
Table Of Minimum Face Amount Percentages in this
policy.
Example: The Minimum Face Amount is determined
on June 10, 19X1. The account value on
that date is $50,000. The last Policy
Anniversary Date was May 2, 19X1. If
the applicable Minimum Face Amount
Percentage for the Policy Year
beginning May 2, 19X1 is 260%, then the
Minimum Face Amount is 260% of $50,000,
or $130,000.
Changes In The Death Benefit While this policy is in force, the Death Benefit
Option Option may be changed upon written request. We
may require a written application and evidence
of insurability satisfactory to Us for any Death
Benefit Option change.
Any change in the Death Benefit Option will take
effect on the Policy Anniversary Date on or next
following the later of:
. The date 15 days after a written request
for such change has been received and
approved by Us; or
. The requested effective date of the
change.
If the Death Benefit Option or the Selected Face
Amount is changed, we will send the Owner any
revised or additional Schedules Pages for
attachment to this policy.
<PAGE>
When We Pay The death benefit will be paid within seven days
after the date we receive due proof of the
Insured's death, and any other requirements
necessary for Us to make payment, at our Home
Office. However, we may delay payment of the
death benefit during any period that:
. The New York Stock Exchange (or its
successor) is closed, except for normal
weekend or holiday closings, or trading
is restricted; or
. The Securities and Exchange Commission
(or its successor) determines that a
state of emergency exists; or
. The Securities and Exchange Commission
(or its successor) permits Us to delay
payment.
Interest On Death Benefit If the death benefit is paid in one sum, we will
add interest from the date of death to the date
of payment. The amount of interest will be the
same as would be paid under Option D of the
payment options for that period of time but not
less than that required by law. See Part 6 for a
description of Option D.
If the death benefit is applied under a payment
option, interest will be paid from the date of
death to the effective date of that option. It
will be paid in one sum to the Beneficiary
living on that effective date. The amount of
interest will be the same as would be paid under
Option D for that period of time but not less
than that required by law.
Part 6. Payment Options
These are Optional Methods of Settlement. They
provide alternate ways in which payment can be
made.
Upon death or full surrender, all or part of the
Availability Of Options death benefit or Cash Surrender Value may be
applied under any payment option. If this policy
is assigned, any amount due to the assignee will
be paid in one sum. The balance, if any, may be
applied under any payment option.
Minimum Amounts If the amount to be applied under any option for
any one person is less than $2,000, we may pay
that amount in one sum instead. If the payments
under any option come to less than $20 each, we
have the right to make payments at less frequent
intervals.
Description Of Options Our payment options are described below. Any
other payment option agreed to by Us may be
elected. The payment options are described in
terms of monthly payments. Annual, semiannual,
or quarterly payments may be requested instead.
The amount of these payments will be determined
in a way which is consistent with monthly
payments and will be quoted on request.
If the Schedule Page shows that this policy was
issued on a unisex rate basis, the female rates
shown in the Option C, E and F Tables apply in
all cases. The male rates in those tables do not
apply to unisex rate policies.
<PAGE>
Option A Fixed Amount Payment Option. Each monthly
payment will be for an agreed fixed amount. The
amount of each payment may not be less than $10
for each $1,000 applied. Interest will be
credited each month on the unpaid balance and
added to it. This interest will be at a rate
determined by Us, but not less than the
equivalent of 3% per year. Payments continue
until the amount we hold runs out. The last
payment will be for the balance only.
Option B Fixed Time Payment Option. Equal monthly
payments will be made for any period selected,
up to 30 years. The amount of each payment
depends on the total amount applied, the period
selected and the monthly payment rates we are
using when the first payment is due. The rate of
any payment will not be less than shown in the
Option B Table.
- --------------------------------------------------------------------------------
Option B Table
Minimum Monthly Payment Rates For Each $1,000 Applied
Years Monthly Payment Monthly Payment Years
----- --------------- --------------- -----
1 $84.47 16 $6.53
2 42.86 17 6.23
3 28.99 18 5.96
4 22.06 19 5.73
5 17.91 20 5.51
6 15.14 21 5.32
7 13.16 22 5.15
8 11.68 23 4.99
9 10.53 24 4.84
10 9.61 25 4.71
11 8.86 26 4.59
12 8.24 27 4.47
13 7.71 28 4.37
14 7.26 29 4.27
15 6.87 30 4.18
For quarterly payment, multiply the monthly payment by 2.993. For
Semiannual payment, multiply the monthly payment by 5.963. For annual payment,
multiply by 11.839.
- --------------------------------------------------------------------------------
<PAGE>
Option C Lifetime Payment Option. Equal monthly payments
are based on the life of a named person.
Payments will continue for the lifetime of that
person. The three variations are:
(1) Payments for life only. No specific number
of payments is guaranteed. Payments stop
when the named person dies.
(2) Payments guaranteed for amount applied.
Payments stop when they equal the amount
applied or when the named person dies,
whichever is later.
(3) Payments guaranteed for 5, 10 or 20 years.
Payments stop at the end of the selected
guaranteed period or when the named person
dies, whichever is later.
The Option C Table shows the minimum monthly
payment for each $1,000 applied. The actual
payments will be based on the monthly payment
rates we are using when the first payment is due.
They will not be less than shown in the Table.
- --------------------------------------------------------------------------------
Option C Table
Minimum Monthly Payment Rates For Each $1,000 Applied
Payments Payments Guaranteed For
Age* For Life Amount 5 10 20
Male Female Only Applied Years Years Years
35 40 $3.30 $3.25 $3.29 $3.28 $3.27
40 45 3.47 3.41 3.46 3.45 3.43
45 50 3.69 3.60 3.68 3.67 3.62
50 55 3.96 3.83 3.95 3.93 3.85
55 60 4.31 4.13 4.30 4.27 4.14
60 65 4.77 4.49 4.75 4.70 4.44
65 70 5.41 4.96 5.38 5.26 4.77
70 75 6.30 5.56 6.21 5.96 5.07
75 80 7.50 6.31 7.30 6.77 5.30
80 85 9.16 7.29 8.72 7.64 5.43
85 11.48 8.54 10.46 8.44 5.49
* Age on birthday nearest due date of the first payment.
Monthly payment rates for ages not shown will be furnished on request.
Monthly payment rates for ages over 85 are the same as those for 85.
- --------------------------------------------------------------------------------
Option D Interest Payment Option. We will hold any amount
applied under this option. Interest on the
unpaid balance will be paid each month at a rate
determined by Us. This rate will be not less
than the equivalent of 3% per year.
<PAGE>
Option E Joint Lifetime Payment Option. Equal monthly
payments are based on the lives of two named
persons. While both are living, one payment will
be made each month. When one dies, the same
payment will continue for the lifetime of the
other. The two variations are:
(1) Payments for two lives only. No specific
number of payments is guaranteed. Payments
stop when both named persons have died.
(2) Payments guaranteed for 10 years. Payments
stop at the end of 10 years, or when both
named persons have died, whichever is
later.
The Option E Table shows the minimum monthly
payment for each $1,000 applied. The actual
payments will be based on the monthly payment
rates we are using when the first payment is due.
They will not be less than shown in the Table.
<PAGE>
- --------------------------------------------------------------------------------
Option E Table
Minimum Monthly Payment Rates For Each $1,000 Applied
Payments For Two Lives Only
M50 M55 M60 M65 M70 M75
Age* F55 F60 F65 F70 F75 F80
M F
50 55 $3.53 $3.64 $3.72 $3.80 $3.85 $3.89
55 60 3.64 3.78 3.91 4.03 4.12 4.18
60 65 3.72 3.91 4.10 4.27 4.42 4.54
65 70 3.80 4.03 4.27 4.52 4.76 4.97
70 75 3.85 4.12 4.42 4.76 5.11 5.44
75 80 3.89 4.18 4.54 4.97 5.44 5.92
80 85 3.91 4.23 4.63 5.12 5.71 6.36
Payments Guaranteed For 10 Years
M50 M55 M60 M65 M70 M75
Age* F55 F60 F65 F70 F75 F80
M F
50 55 $3.52 $3.63 $3.71 $3.79 $3.84 $3.88
55 60 3.63 3.77 3.90 4.02 4.11 4.17
60 65 3.71 3.90 4.09 4.26 4.41 4.53
65 70 3.79 4.02 4.26 4.51 4.75 4.94
70 75 3.84 4.11 4.41 4.75 5.08 5.38
75 80 3.88 4.17 4.53 4.94 5.38 5.82
80 85 3.90 4.22 4.61 5.08 5.62 6.19
* Age on birthday nearest the due date of the first payment. Monthly payment
rates for ages not shown will be furnished on request. Monthly payment rates for
ages over 85 are the same as those for 85.
- --------------------------------------------------------------------------------
Option F Joint Lifetime Payment Option With Reduced
Payments. Monthly payments are based on the
lives of two named persons. Payments will
continue while both are living. When one dies,
payments are reduced by one-third and will
continue for the lifetime of the other. Payments
stop when both persons have died.
The Option F Table shows the minimum monthly
payment for each $1,000 applied. The actual
payments will be based on the monthly payment
rates we are using when the first payment is
due. They will not be less than shown in the
Table.
<PAGE>
- --------------------------------------------------------------------------------
Option F Table
Minimum Monthly Payment Rates For Each $1,000 Applied
M50 M55 M60 M65 M70 M75
Age* F55 F60 F65 F70 F75 F80
M F
50 55 $3.80 $3.94 $4.10 $4.28 $4.47 $4.66
55 60 3.94 4.11 4.30 4.51 4.73 4.96
60 65 4.10 4.30 4.52 4.77 5.05 5.33
65 70 4.28 4.51 4.77 5.08 5.42 5.77
70 75 4.47 4.73 5.05 5.42 5.85 6.30
75 80 4.66 4.96 5.33 5.77 6.30 6.88
80 85 4.86 5.19 5.61 6.13 6.77 7.51
* Age on birthday nearest the due date of the first payment. Monthly
payment rates for ages not shown will be furnished on request. Monthly
payment rates for ages over 85 are the same as those for 85.
- --------------------------------------------------------------------------------
Electing A Payment Option To elect any option, we require that a written
request, satisfactory to Us, be received at our
Home Office. The Owner may elect an option
during the Insured's lifetime. If the death
benefit is payable in one sum when the Insured
dies, the Beneficiary may elect an option with
our consent. Options for any amount payable to
an association, corporation, partnership or
fiduciary are available with our consent.
However, a corporation or partnership may apply
any amount payable to it under Option C, E, or F
if the option payments are based on the life or
lives of the Insured, the Insured's spouse, any
child of the Insured, or any other person agreed
to by Us.
Effective Date And Payment The effective date of an option is the date the
Dates amount is applied under that option. For a death
benefit, this is the date that due proof of the
Insured's death is received at our Home Office.
For the Cash Surrender Value, it is the
effective date of surrender.
The first payment is due on the effective date,
except the first payment under Option D is due
one month later. A later date for the first
payment may be requested in the payment option
election. All payment dates will fall on the
same day of the month as the first one. No
payment will become due until a payment date. No
part payment will be made for any period shorter
than the time between payment dates.
Example: Monthly payments of $100 are being
made to your son on the 1st of each
month. He dies on the 10th. No part
payment is due to your son or his
estate for the period between the
1st and the 10th.
<PAGE>
Withdrawals And If provided in the payment option election, all
Changes or part of the unpaid balance under Options A or
D may be withdrawn or applied under any other
option changes.
If the Cash Surrender Value is applied under
Option A or D, we may delay payment of any
withdrawal for up to six months. Interest at the
rate in effect for Option D during this period
will be paid on the amount withdrawn.
Income Protection To the extent permitted by law, each option
payment and any withdrawal shall be free from
legal process and the claim of any creditor of
the person entitled to them. No option payment
and no amount held under an option can be taken
or assigned in advance of its payment date,
unless the Owner's written consent is given
before the Insured dies. This consent must be
received at our Home Office.
Part 7. Notes On Our Computations
Net Investment Factor This Part covers some technical points about
this policy.
The Net Investment Factor for each division of
the Separate Account is determined by dividing A
by B and subtracting C where:
A equals:
. the net asset value per share of each
Fund held by a Division for the current
Valuation Period; plus
. any dividend per share declared on
behalf of such Fund that has an
ex-dividend date within the current
Valuation Period; less
. the cumulative charge or credit for
taxes reserved which is determined by Us
to have resulted from the operation or
maintenance of the Division; and
B equals:
. the net asset value per share of the
Fund held by the Division for the
immediately preceding Valuation Period;
and
C equals:
. the cumulative unpaid charge for the net
investment factor asset charge shown on
the Schedule Page of this policy.
Accumulation Unit Value The value of an accumulation unit in each
division was set at $1.000000 on the first
Valuation Date selected by Us. The value on any
date thereafter is equal to the product of the
Net Investment Factor for that division for the
Valuation Period which includes that date and
the accumulation unit value on the preceding
Valuation Date.
The Accumulation Unit Value may increase or
decrease from Valuation Period to Valuation
Period.
Adjustments Of Units We have the right to split or consolidate the
number of accumulation
<PAGE>
And Values units credited to this policy, with a
corresponding increase or decrease in the unit
values. We may exercise this right whenever we
consider an adjustment of units to be desirable.
However, strict equity will be preserved in
making any adjustment. No adjustment will have
any material effect on the benefits, provisions
or investment return of this policy, or on the
Owner, Insured, any Beneficiary, any assignee or
other person, or on Us.
Basis Of Computation The Basis Of Computation is the mortality table
and interest rate we use to determine:
. The maximum monthly mortality charges;
. The minimum annual interest earned on
the fixed account value of this policy;
and
. The minimum payments under Payment
Options C, E, and F.
The Basis Of Computation for the Cash Surrender
Values, for the maximum monthly mortality
charges, and for the minimum interest earned on
the account value of the Guaranteed Principal
Account of this policy is shown on the Schedule
Page. The mortality table is specified on the
Schedule Page.
In computing the minimum payments under Payment
Options C, E, and F, we use mortality rates from
the 1983 Table "A" with Projection G for 30
years and with female rates set back five years.
The interest used is at an annual rate of 3%.
Method Of Computing Values When required by the state where this policy was
delivered, we filed a detailed statement of the
method we use to compute this policy benefits
and values. These benefits and values are not
less than those required by the laws of that
state.
<PAGE>
WHERE TO FIND IT
- --------------------------------------------------------------------------------
Page No.
The Schedule Page........................................................1
Table of Maximum Monthly Mortality Charges...............................2
Table of Minimum Face Amount Percentages.................................3
Part 1. - The Basics of This Policy.........................................4
The Parties Involved - Owner, Insured, Beneficiary, Irrevocable
Beneficiary...........................................................4
Dates - Policy Date, Policy Anniversary Date, Policy Year,
Issue Date, Paid-up Policy Date, Monthly Calculation Date,
Valuation Date, Valuation Period, Valuation Time, Register Date.......4
Safety Test Period.......................................................5
Monthly Safety Test Premium..............................................5
Policy Is A Legal Contract...............................................6
Representations and Contestability.......................................6
Suicide Exclusion........................................................6
Misstatement of Age or Gender............................................7
Meaning Of In Force......................................................7
Home Office..............................................................7
Part 2. - Premium Payments..................................................8
The First Premium, Minimum Net First Premium.............................8
Planned Annual Premiums..................................................8
Premium Flexibility and Premium Notices..................................8
Where To Pay Premiums....................................................8
Right To Refund Premiums.................................................8
Part 3. - Accounts, Values, And Charges.....................................9
Net Premium, Premium Load................................................9
Allocation of Net Premiums...............................................9
The Separate Account....................................................10
Changes In the Separate Account.........................................10
Accumulation Units......................................................10
Purchase and Sale of Accumulation Units.................................11
Account Value of Policy.................................................11
Variable Account Value of Policy........................................11
The Guaranteed Principal Account........................................12
Interest On Account Value Of The Guaranteed Principal Account...........12
Monthly Charges.........................................................13
Grace Period and Termination............................................14
Safety Test.............................................................14
Part 4. - Life Benefits....................................................15
Policy Ownership........................................................15
Rights of Owner.........................................................15
Assigning This Policy...................................................16
Changing the Owner or Beneficiary.......................................16
Transfers Of Values.....................................................16
This Policy's Share in Dividends........................................16
Policy Is Participating.................................................16
How Dividends May Be Used...............................................17
Dividend After Death....................................................17
Surrendering This Policy And Making Withdrawals.........................17
Right To Surrender......................................................17
Cash Surrender Value....................................................17
Making Withdrawals......................................................18
How We Pay..............................................................19
Borrowing On This Policy................................................19
Right To Make Loans.....................................................19
Effect Of Loan..........................................................19
Maximum Loan Available..................................................20
Interest................................................................20
Policy Debt Limit.......................................................20
Repayment of Policy Debt................................................20
Other Borrowing Rules...................................................21
Reinstating This Policy.................................................21
When Reinstatement Can Be Made..........................................21
Requirements to Reinstate...............................................21
Changes In The Selected Face Amount.....................................21
Increases In The Selected Face Amount...................................21
Limitations On Increases................................................22
Evidence Of Increases...................................................22
Decreases In Selected Face Amount.......................................22
Right To Transfer This Policy To A Substitute Insured...................22
Transferring This Policy................................................22
Transfer Date...........................................................23
Transfer Method.........................................................23
Cost To Transfer........................................................23
Policy Debt After Transfer..............................................23
Assignment Upon Transfer................................................23
Reports To Owner........................................................24
Annual Report...........................................................24
Illustrative Report.....................................................24
Part 5. - The Death Benefit................................................24
Amount Of Death Benefit.................................................24
Death Benefit Options...................................................24
Minimum Face Amount.....................................................25
Changes In the Death Benefit Option.....................................25
When We Pay.............................................................26
Interest On Death Benefit...............................................26
Part 6. - Payment Options..................................................26
Availability of Options.................................................26
Minimum Amounts.........................................................26
Description of Options..................................................26
Electing A Payment Option...............................................30
Effective Date and Payment Dates........................................31
Withdrawals and Changes.................................................31
Income Protection.......................................................31
Part 7. - Notes on Our Computations........................................31
Net Investment Factor...................................................31
Accumulation Unit Value.................................................32
Adjustments of Units and Values.........................................32
Basis of Computation....................................................32
Method of Computing Values..............................................32
- --------------------------------------------------------------------------------
Any Riders and Endorsements, and a Copy of The Application for The Policy,
Follow Page 32.
<PAGE>
Massachusetts Mutual Life Insurance Company
Springfield, MA 01111-0001
Flexible Premium Variable Adjustable Life Insurance Policy
This Policy provides that:
Insurance is payable when the Insured dies.
Within specified limits, flexible premiums may be paid
during the Insured's lifetime. Annual dividends may be
paid.
Notice of Annual Meeting
The Insured is hereby notified that by virtue of this
policy he or she is a member of Massachusetts Mutual Life
Insurance Company and is entitled to vote either in person
or by proxy at any and all meetings of said Company. The
annual meetings are held at its Home Office, in
Springfield, Massachusetts, on the second Wednesday of
April in each year at 2 o'clock p.m.
-35-
<PAGE>
Exhibit 1(A)(11)
Description of Issuance, Transfer, and Redemption Procedures
and
Method of Computing Adjustments on Payments and Account Value Conversion
to Fixed Benefit Policies
for
Flexible Premium Variable Adjustable Life Insurance Policies
Offered by
Massachusetts Mutual Variable Life Separate Account I
of
Massachusetts Mutual Life Insurance Company
This document sets forth, as required by Rule 6e-3(T)(b)(12)(iii), the
administrative procedures that will be followed by Massachusetts Mutual Life
Insurance Company ("MassMutual") in connection with the issuance of the Policy
described in this Registration Statement, the transfer of assets held
thereunder, and the redemption by Policyowners of their interests in the
Policies. This document also describes the method that MassMutual will use in
adjusting the payments and account values when a Policy is exchanged for a fixed
benefit insurance policy.
Massachusetts Mutual Variable Life Separate Account I (the "Separate Account")
of MassMutual is registered under the Investment Company Act of 1940 (the "1940
Act") as a unit investment trust. A segment of the Separate Account has been
designated to receive and invest premium payments from owners of Flexible
Premium Variable Adjustable Life Insurance Policies (the "Policy"). Within the
designated segment of the Separate Account are thirty (30) Divisions. Each
Division invests in shares of a corresponding series of MML Series Investment
Trust ("MML Trust"), Oppenheimer Variable Account Funds ("Oppenheimer Fund"),
Panorama Series Fund, Inc. ("Panorama Fund"), T. Rowe Price Equity Series, Inc.
(T. Rowe Price Equity Series"), T. Rowe Price Fixed Income Series, Inc. ("T.
Rowe Price Fixed Income Series"), MFS Variable Insurance Trust ("MFS Trust"),
Goldman Sachs Variable Insurance Trust ("Goldman Sachs Trust"), and Fidelity
Variable Insurance Products Fund II ("Fidelity VIP Fund II"), each of which is a
series type mutual fund registered under the 1940 Act. The investment experience
of a Division of the Separate Account depends upon the market performance of the
corresponding series in which it invests.
1. "Public Offering Price": Purchase and Related Transactions
-----------------------------------------------------------
Set out below is a summary of the principal Policy provisions and administrative
procedures which might be deemed to constitute, either directly or indirectly, a
"purchase" transaction. The summary shows that, because of the insurance nature
of the Policies, the procedures involved necessarily differ in certain
significant respects from the purchase procedures for mutual funds and annuity
contracts. The chief differences revolve around the structure of the cost of
insurance charges and the insurance underwriting process. Certain Policy
provisions, such as reinstatement and loan repayment, do not result in the
issuance of a Policy, but require certain payments by the Policyowner and
involve a transfer of assets supporting Policy reserves into the Separate
Account.
(a) Premium Schedules and Underwriting Standards
--------------------------------------------
The minimum case premium is $250,000 of first year annualized premium for all
policies in a case. The minimum first policy premium for a Policy is an amount,
which after deductions for sales load, state premium tax, and deferred
acquisition cost tax charge, is sufficient (disregarding investment performance)
to fund 12 times the first monthly deduction.
-36-
<PAGE>
A premium payment schedule may be selected at the time of application and may be
changed at any time. The planned annual premium may be subject to minimum and
maximum amounts which depend upon the selected face amount of the Policy, the
Insured's age, gender and tobacco class and the amount of the first premium
paid.
A Policyowner may make additional premium payments at any time before the death
of the Insured while the Policy is still in force, but such payments cannot be
less than $100.00. MassMutual has the right to refund premium paid if
application of that premium increases the net amount at risk. The amount and
frequency of any additional premium payments will affect the account value and
may ultimately affect the amount of the death benefit and the period that the
Policy will remain in force.
The Policies will be offered and sold pursuant to established underwriting
standards and in accordance with state insurance laws. State insurance laws
prohibit unfair discrimination among Insureds but recognize that mortality
charges must be based upon factors such as age, gender, health and tobacco use,
and occupation.
(b) Application and Initial Premium Processing
------------------------------------------
Upon receipt of a completed application and all other required forms, MassMutual
will follow certain insurance underwriting (i.e., evaluation of risks)
procedures designated to determine whether the applicant is insurable. This
process may involve such verification procedures as medical examinations and may
require that further information be provided by the proposed Insured before a
determination can be made. A Policy will not be issued until this underwriting
procedure has been completed.
The register date is the date MassMutual allocates the first premium less
certain deductions to the Separate Account. This date is the Valuation Date
which is on, or next follows the later of the date on which we receive a
completed Part I of the application for this Policy and all other required forms
at our home office or the date we receive an amount equal to or in excess of the
minimum first policy premium payment at our home office. On the register date,
MassMutual will allocate the first Policy premium less certain deductions to the
Oppenheimer Money Division until the later of: (1) the end of the free look
period or (2) the date we receive proper notice that the Policyowner has
received the Policy. Subject to the allocation rules in the Policy, the account
value is then allocated among the Separate Account Divisions and the General
Principal Account ("GPA") in accordance with the Policyowner's instructions. At
any one time, only eight Divisions of the Separate Account plus the GPA are
available to a Policyowner. Subsequent premium payments will be similarly
allocated upon receipt. Allocation instructions can be changed for any future
premium payments. The allocation must be in whole percentage points or in
dollars.
Insurance coverage begins when a completed application and all other required
forms have been submitted, the applicant has been judged to be insurable, and an
amount equal to or in excess of the minimum net first premium has been paid.
Otherwise, coverage begins when the Policy has been issued and MassMutual has
received an amount equal to or in excess of the minimum net first policy
premium. This usually corresponds with the date the Policy is delivered.
(c) Free Look Provision
-------------------
A Policy may be returned at the election of the Policyowner within 10 days (or
longer if required by state law) after receipt of the issued Policy by the
Policyowner. The Policy may be returned by delivering or mailing it to
MassMutual's home office or to any of its agency offices or to the agent who
sold the Policy.
-37-
<PAGE>
MassMutual will refund: (a) any premium paid for the Policy; plus (b) interest
credited to this Policy under the GPA; plus or minus (c) an amount that reflects
the investment experience of the Divisions of the Separate Account under this
Policy to the date the Policy is received by MassMutual; minus (d) any amounts
borrowed or withdrawn. The Policy will then be deemed void from the beginning or
where required by state law.
(d) Repayment of Indebtedness
-------------------------
A loan made under the Policy will bear interest at the rate of 6% per year or
the Policyowner, where permitted, may select an adjustable loan rate. For
Policies under which an adjustable loan rate is selected, MassMutual will set
the rate that will apply for the next Policy Year. The maximum adjustable rate
is based on the monthly average of the composite yield on seasoned corporate
bonds as published by Moody's Investor Service or, if it is no longer published,
a substantially similar average. The maximum adjustable rate is the published
monthly average for the calendar month ending two months before the Policy Year
begins, or 5%, whichever is higher. If the maximum limit is not at least 1/2 %
higher than the rate in effect for the previous year, we will not increase the
rate. If the maximum limit is at least 1/2% lower than the rate in effect for
the previous year, we will decrease the rate.
Interest accrues daily and becomes part of the Policy debt. It is due on each
Policy Anniversary Date. If not paid when due, the interest will be added to the
loan and, as part of the loan, will bear interest at the same rate. Any interest
capitalized on a Policy Anniversary Date will be treated the same as a new loan
and will be taken from the Separate Account Divisions and the GPA in proportion
to the non-loaned account value in each. If the Policy debt exceeds the account
value, MassMutual may terminate the Policy even if the safety test has been
satisfied. Prior to termination we must notify the Policyowner in writing of the
amount necessary to bring the Policy debt back within the limit. If we do not
receive payment within 31 days after the date we mailed the notice, the Policy
will terminate without value at the end of those 31 days.
Any Policy debt may be repaid in full or in part at any time while the Insured
is living and the Policy is in force. Any repayments will result in the transfer
of values equal to the repayment from the loaned portion of the GPA to the
non-loaned portion of the GPA and the Divisions of the Separate Account. The
transfer will be made in proportion to the non-loaned value in each investment
account at the time of repayment. If the loan is not repaid, we will deduct the
amount due from any amount payable from a full surrender or upon the death of
the Insured.
(e) Correction of Misstatement of Age or Gender
-------------------------------------------
If MassMutual discovers that the Insured's date of birth or gender as given in
the application is not correct, an adjustment will be made. If the adjustment is
made when the Insured dies, the death benefit will reflect the amount provided
by the most recent mortality charge according to the correct age and gender. If
the adjustment is made before the Insured dies, then future monthly deductions
will be based on the correct age and gender.
(f) Policy Reinstatement
--------------------
For a period of five years after termination, a Policyowner can request that
MassMutual reinstate the Policy during the Insured's lifetime. MassMutual will
not reinstate the Policy if it has been surrendered for its Cash Surrender
Value. Before MassMutual will reinstate the Policy, it must receive the
following: (1) a premium payment equal to three times the monthly deduction for
the Policy on the Monthly Calculation Date which is on, or next follows, the
date of reinstatement; (2) evidence of insurability that
-38-
<PAGE>
is satisfactory to MassMutual; and (3) where necessary, a signed acknowledgement
that the policy has become a modified endowment contract. If a Policy is
reinstated, the death benefit for the reinstated Policy will be the same as it
would have been if the Policy had not been terminated.
(g) Contestability
--------------
MassMutual will not contest the validity of a Policy after it has been in force
during the Insured's lifetime for two years from the date of issue. MassMutual
will not contest the validity of any increase in the selected face amount after
such increase has been in effect during the lifetime of the Insured for a period
of two years. If the Policy is reinstated, the amount insured cannot be
contested after the Policy has been in force during the Insured's lifetime for
two years from the date of reinstatement.
(h) Change in Selected Face Amount or in Death Benefit Option
---------------------------------------------------------
A Policyowner's selected face amount may be increased upon request by the
Policyowner, subject to MassMutual's then current guidelines regarding
guaranteed issue, simplified issue, and full underwriting. Evidence of
insurability satisfactory to MassMutual, is required for each increase. Any
increase must be for at least $10,000. Any increase in the selected face amount
will become effective on the Monthly Calculation Date which is on, or next
follows, the later of: (1) the date 15 days after a written request for such
change has been received and approved by us; or (2) the requested effective date
of the change.
No increase in the selected face amount can become effective: (1) within six
months after the Policy Date; (2) within six months after any previous increase;
or (3) after the Policy Anniversary Date nearest the Insured's 85th birthday.
While the Policy is in force, the selected face amount may be decreased upon
written application satisfactory to MassMutual. The selected face amount after
decrease must be at least $50,000. Any decrease in the selected face amount will
become effective on the Monthly Calculation Date which is on, or next follows,
the later of: (1) the date 15 days after a written request for such change has
been received and approved by us; or (2) the requested effective date of the
change.
While the Policy is in force, a Policyowner may change the death benefit option
by written request submitted to MassMutual. MassMutual may require a written
application and evidence of insurability satisfactory to MassMutual for any
death benefit option change. Any change in the death benefit option will take
effect on the Policy Anniversary Date on or next following the later of: (1) the
date 15 days after a written request for such change has been received and
approved by us; or (2) the requested effective date of the change.
(i) Supplemental Monthly Term Rider
-------------------------------
This Policy provides an option to purchase monthly term insurance on the life of
the Insured to supplement the selected face amount (the "Term Rider"). The Term
Rider provides a level amount of insurance which will be in force from the
Monthly Calculation Date on which it is purchased to the later of the Policy
Anniversary Date nearest the Insured's 70th birthday or the 10th Policy
Anniversary Date. The safety test will not be applicable to the Term Rider. The
Policy's selected face amount plus the Term Rider's selected face amount cannot
be less than $50,000. If the Term Rider is purchased, the Policy to which it is
attached may have a lower annual cutoff policy premium and, as a result, a lower
overall sales load than a Policy having the same total selected face amount, but
with no Term Rider.
2. "Redemption Procedures": Surrender and Related Transactions
------------------------------------------------------------
-39-
<PAGE>
This section outlines those procedures which might be deemed to constitute
redemptions under the Policy. These procedures differ in certain significant
respects from the redemption procedures for mutual funds and annuity contracts.
(a) Surrender for Cash Surrender Value
----------------------------------
At any time while the Insured is still living the Policyowner may surrender the
Policy for its full cash surrender value. Unless a later effective date is
selected, surrender is effective on the date MassMutual receives the policy and
a written request in proper form at its Home Office. The Policy and a written
request for surrender are deemed received on the date on which they are received
by mail at MassMutual's Home Office. If, however, the day on which they are
received is not a day on which the net asset value of the underlying funds, in
which the Divisions of the Separate Account invest is determined (i.e., the New
York Stock Exchange is not open for trading), or if they are received other than
through the mail after a certain time (currently 4:00 p.m. New York time), then
they are deemed received on the next day the net asset value of the underlying
funds is determined. MassMutual will normally pay the full cash surrender value
within seven days after receipt of the Policy and written request in proper
form.
The cash surrender value is the account value less any Policy debt, plus a
refund of sales load, if applicable. If the Policy is surrendered within the
first two Policy Years, a portion of the sales load will be refunded to the
Policyowner as part of the cash surrender value. If the Policy is surrendered in
the first Policy Year, 65% of the sales load collected for that year will be
refunded as part of the cash surrender value. If the Policy is surrendered in
the second Policy Year, 30% of the sales load collected in the first Policy Year
will be refunded as part of the cash surrender value.
The cash surrender value of a Policy is affected by the investment performance
of the Divisions of the Separate Account in which the Policy has account value,
and the interest credited on the amount of value held in the GPA.
The cash surrender value may increase or decrease daily.
The account value is determined by the amount and frequency of premium payments,
the investment experience of the Divisions of the Separate Account chosen by the
Policyowner, the interest earned on value allocated to the GPA, and any
withdrawals or charges imposed in connection with the Policy. MassMutual will
deduct a charge for sales load, state premium taxes, and DAC taxes from each
premium payment. MassMutual will also make the following monthly deductions from
the Policy: (1) cost of insurance charge, (2) administrative charge, (3) face
amount charge, and (4) rider charge, if applicable. Other possible deductions
from the Policy (which occur on a Policy specific basis) include a charge for
partial withdrawals, a charge for transfers (although there currently is no such
charge), a charge for loans, and increases in selected face amount which require
simplified or full underwriting.
(b) Partial Withdrawals
-------------------
Subject to certain conditions, withdrawals may be made on any Monthly
Calculation Date, while the Insured is living, by sending a written request in
proper form to MassMutual's Home Office after the Policy has been in force for 6
months. The minimum amount of any withdrawal is $100. A withdrawal charge of 2%
of the amount of the withdrawal, not to exceed $25, will be deducted from the
withdrawal. The maximum amount of any withdrawal is the cash surrender value,
less an amount equal to 12 times the most recent monthly charge made for the
Policy. The withdrawal is deducted from the Policy's account value at the end of
the valuation period applicable to the Monthly Calculation Date on which the
withdrawal is made. Withdrawals may be made from the GPA or from any division as
the Policyowner directs but may not exceed the non-loaned account value of that
Division or GPA. If the Policyowner does not indicate from where the withdrawal
should be taken, MassMutual will withdraw the amount pro
-40-
<PAGE>
rata for the Divisions of the Separate Account and the GPA. Unless MassMutual
receives satisfactory evidence of insurability, the selected face amount will be
reduced upon withdrawal as needed to prevent an increase in the amount of
insurance that requires a charge. Withdrawals from the Separate Account will
generally be paid within 7 days of receipt of the written request./1/
(c) Death Claims
------------
As long as the Policy remains in force, MassMutual will pay a death benefit to
the named Beneficiary in accordance with the designated settlement option
generally within 7 days after MassMutual receives due proof of death of the
Insured and verifies the validity of the claim. Payment of death benefits may,
however, be postponed under certain circumstances./2/ In particular, during the
first two Policy Years and in other circumstances in which MassMutual may have a
basis for contesting the claim, there can be a delay beyond the 7 day period.
The death benefit is the amount payable to the named Beneficiary when the
Insured dies. A choice of death benefits is available under the Policy (referred
to as "Death Benefit Option 1 ", "Death Benefit Option 2", and "Death Benefit
Option 3"). Death Benefit Option 1 equals the greater of the selected face
amount in effect on the date of death or the minimum face amount in effect on
the date of death. Death Benefit Option 2 equals the greater of the selected
face amount in effect on the date of death plus the Account Value on the date of
death or the minimum face amount in effect on the date of death. Death Benefit
Option 3 equals the greater of the selected face amount in effect on the date of
death plus the sum of all premiums paid (and not refunded), less any withdrawals
to that date or the selected face amount in effect on the date of death or the
minimum face amount in effect on the date of death. Death benefit proceeds under
any option will be reduced by any outstanding Policy debt, plus or minus any
unearned or unpaid monthly deductions.
The minimum face amount is determined using one of two allowable definitions of
life insurance: (1) the Cash Value Accumulation Test or (2) the Guideline
Premium Test. The Policyowner chooses which test to use prior to the issuance of
the policy. Once the Policyowner chooses which test to use, the Policyowner
cannot change to the other test after the policy is issued. The Cash Value
Accumulation Test determines the minimum face amount by multiplying the account
value plus the refund of sales load, if applicable, by the minimum face amount
percentage. The percentage depends upon the Insured's age, gender and tobacco
use classification. Under the Guideline Premium Test, the minimum face amount is
also equal to an applicable percentage of the account value, but the percentage
varies only by the age of the Insured.
Any Policy debt outstanding on the date of death and any monthly deduction
unpaid as of the date of death are deducted from the death benefit. MassMutual
pays interest on the death benefit from the date of death to the date the death
benefit is paid or a payment option becomes effective.
- ---------------
/1/ Payment from the Separate Account may be postponed whenever: (i) the New
York Stock Exchange (or its successor) is closed other than for customary
weekend and holiday closings, or trading on the New York Stock Exchange (or its
successor) is restricted as determined by the SEC or (ii) an emergency exists,
as determined by the SEC, as a result of which disposal of securities is no
reasonably practicable or it is not reasonably practicable to determine the
value of the Separate Account's net assets. Payment from the portion of the
account value held in the GPA may be postponed up to six months. Payments under
the Policy of any amount paid to MassMutual by check may be postponed until such
time as the check has cleared the Policyowner's bank.
/2/ See note 1. supra.
-----
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<PAGE>
(d) Policy Loans
------------
Loans can be made at any time while the Insured is living. The maximum loan is
an amount equal to the account value at the time of the loan less any
outstanding Policy debt, interest on the loan being made and on any outstanding
Policy Debt to the next Policy Anniversary Date and an amount equal to the most
recent monthly charge for the Policy multiplied by the number of Monthly
Calculation Dates remaining until the next Policy Anniversary Date. The Policy
must be properly assigned as collateral for the loan.
The Policy debt is equal to the amount of all loans under the Policy plus
interest which accrues daily. Interest payments are due on each Policy
Anniversary. If not paid when due, interest will be added to the Policy debt
and, as part of the loan, will bear interest on the same terms. The loan amount
requested will be secured by amounts taken from the Separate Account Divisions
and the GPA in proportion to the non-loaned account value in each on the date of
the loan. Shares taken from the Divisions will be liquidated and the resulting
dollar amounts will be transferred to the GPA/3/. That portion of the account
value held in the GPA to secure a loan will accrue earnings at a rate which is
the greater of 3% and the Policy loan rate less a charge for expenses and taxes
declared by MassMutual. The current charge varies by Policy Year as follows:
Policy Years 1-15, 0.75%; Policy Years 16-30, 0.55%; and Policy Years 31 and
thereafter, 0.45%. This charge is guaranteed not to exceed 3%. If the Policy
debt equals or exceeds the account value, we may terminate the Policy, even if
the safety test is satisfied. Prior to termination we must notify the
Policyowner in writing of the amount necessary to bring the Policy debt back
within the limit. If we do not receive payment within 31 days after the date we
mail the notice, the Policy will then terminate without value at the end of
those 31 days.
The Policy debt will bear interest at the rate of 6% per year or the
Policyowner, where permitted, may select an adjustable loan rate. For Policies
under which an adjustable loan rate is selected, MassMutual will set the rate
that will apply for the next year. The maximum adjustable rate is based on the
monthly average of the composite yield on seasoned corporate bonds as published
by Moody's Investors Service or, if it is no longer published, a substantially
similar average. The maximum adjustable rate is the published monthly average
for the calendar month ending two months before the Policy Year begins, or 5%,
whichever is higher. If the maximum limit is not at least 1/2% higher than the
rate in effect for the previous year, we will not increase the rate. If the
maximum limit is at least 1/2% lower than the rate in effect for the previous
year, we will decrease the rate.
Any Policy debt may be repaid in full or in part at any time while the Insured
is living and the Policy is in force. Any repayment will result in the transfer
of values equal to the repayment from the loaned portion of the GPA to the
non-loaned portion of the GPA and the Divisions of the Separate Account. The
transfer will be made in proportion to the non-loaned value in each investment
account at the time of repayment. If the loan is not repaid, we will deduct the
amount due from any amount payable from a full surrender or upon the death of
the Insured.
A Policy loan, whether or not repaid, will have a permanent effect on the
Policyowner's account value to the extent that the investment results of the
division(s) or the rate of return on funds in the GPA not securing a loan differ
from the rate credited on funds which secure a loan. The effect could be
favorable or unfavorable. If the division(s) or the GPA earn interest at a rate
greater than the rate credited on funds which secure a loan, a Policyowner's
account value will be less than it would have been had no loan been
- -----------------
/3/ MassMutual may delay the granting of any loan attributable to the GPA for up
to six months. MassMutual may also delay the granting of any loan attributable
to the Separate Account during any period that (i) the New York stock Exchange
(or its successor) is closed other than for customary weekend and holiday
closings, or trading on the New York Stock Exchange (or its successor) is
restricted as determined by the SEC or (ii) an emergency exists, as determined
by the SEC, or (iii) the SEC permits MassMutual to delay payment.
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<PAGE>
made. If the Division(s) earn interest at a rate less than the rate credited on
funds which secure a loan, the Policyowner's account value will be greater than
it would have been had no loan been made.
(e) Policy Termination
------------------
If the account value less any Policy debt is not sufficient to pay certain
monthly deductions under the Policy on the Monthly Calculation Date, and the
safety test is not satisfied, the Policy will terminate without value after a
grace period of 61 days. The Policy will stay in force during the grace period.
Notice of the amount required to continue the Policy in force will be mailed to
the addressee of record at his last known address and, if required, to any
assignee of record. If a sufficient payment is not received by MassMutual during
the grace period, the Policy will terminate without value on the later of the 61
days or 30 days after the notice is mailed. If a sufficient payment is received
during the grace period, the payment will be allocated among the GPA and the
Division(s) in accordance with the Policyowner's then current instructions. If
the Insured dies during a grace period, the death benefit proceeds will be
reduced by any due and unpaid monthly deductions to the date of death.
If the account value less Policy debt on a Monthly Calculation Date cannot cover
the monthly charges due, but the safety test is satisfied on that date, then the
account value will be reduced to zero and all monthly charges due and unpaid
will be deducted on the date of the next premium payment.
(f) Safety Test
-----------
The safety test is a test which, if satisfied, allows a Policy to stay in force
even if there is insufficient account value to cover the monthly charges during
the safety test period. The safety test is only available if: Death Benefit
Options 2 or 3 are never in effect and the Insured is not in a substandard
rating class. The safety test period expires on the later of the Policy
Anniversary Date nearest the Insured's 70th birthday or the tenth Policy
Anniversary Date.
The safety test is satisfied on any given Monthly Calculation Date provided that
the sum of premiums paid, less any amounts withdrawn, less any rider charges, if
applicable, equals or exceeds the sum of monthly safety test premiums on that
Monthly Calculation Date and all prior Monthly Calculation Dates during the
safety test period. Safety test premium is a premium measurement used in the
safety test. Even if the safety test is satisfied, the Policy will terminate if
Policy debt exceeds account value.
If the sum of the premiums paid does not equal or exceed the safety test premium
on any given Monthly Calculation Date, the safety test will expire 31 days after
we mail written notice to the Policyowner and to any assignee shown in our
records at their last known address. This notice will state the amount of
premium needed to prevent termination of the safety test. If the necessary
premium payment is not received within 31 days, the safety test terminates and
cannot be reinstated.
3. Account Value Transfers
-----------------------
The Separate Account currently has thirty Divisions, each of which invests
exclusively in shares of a corresponding series of MML Trust, Oppenheimer Fund,
Panorama Fund, T. Rowe Price Equity Series, T. Rowe Price Fixed Income Series,
MFS Trust, Goldman Sachs Trust, and Fidelity VIP Fund II, each of which is a
series type mutual fund registered under the 1940 Act. There is no limit to the
number of transfers in a Policy Year. However, MassMutual reserves the right to
charge a fee not to exceed $10 per transfer if there are more than six transfers
in a Policy Year.
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<PAGE>
Policyowners may transfer all funds in the Separate Account to the GPA and to
other Separate Account Divisions at any time. At any one time, however, only
eight Divisions of the Separate Account plus the GPA are available to a
Policyowner.
Transfers from the GPA to the Separate Account may be made only once each Policy
Year within the 31 day period following the Policy Anniversary date. Each such
transfer may not exceed 25% of the value in the GPA (excluding policy debt) at
the time of the transfer. A transfer of 100% of the value in the GPA will be
allowed if: (1) in each of the 3 prior policy years a maximum transfer (i.e.,
25% of the value in the GPA) was made from the GPA, and (2) no premiums have
been allocated to the GPA nor transfers made to the GPA (except as the result of
a loan) during the 3 prior Policy Years. Any transfer will be effective as of
the Valuation Date and all transfers made on one Valuation Date will be
considered one transfer.
4. Exchange Procedure
------------------
The Policyowner may transfer the entire account value under the Policy to the
GPA at any time. This transfer converts the Policy into a fixed benefit policy.
The transfer will take effect when we receive a written request.
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<PAGE>
Exhibit 1(A)(8)(a)
THIRD AMENDED AND RESTATED
--------------------------
PARTICIPATION AGREEMENT
-----------------------
Among
OPPENHEIMER VARIABLE ACCOUNT FUNDS,
-----------------------------------
OPPENHEIMERFUNDS, INC.,
-----------------------
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY,
--------------------------------------------
MML BAY STATE LIFE INSURANCE COMPANY
------------------------------------
and
C.M. LIFE INSURANCE COMPANY
---------------------------
THIS AMENDED AND RESTATED AGREEMENT (the "Agreement"), made
and entered into as of the ___ day of February, 1998 by and among Massachusetts
Mutual Life Insurance Company and MML Bay State Life Insurance Company and C.M.
Life Insurance Company (hereinafter collectively the "Companies"), on their own
behalf and on behalf of Massachusetts Mutual Variable Life Separate Account I,
Massachusetts Mutual Variable Annuity Separate Account 1, Massachusetts Mutual
Variable Annuity Separate Account 2, Massachusetts Mutual Variable Annuity
Separate Account 3, Massachusetts Mutual Variable Annuity Separate Account 4,
MML Bay State Variable Annuity Separate Account 1, MML Bay State Variable Life
Separate Account I, C.M. Life Variable Life Separate Account I, C.M.
Multi-Account A, CML Accumulation Annuity Account E, CML/OFFITBANK Separate
Account, Panorama Plus Separate Account, Panorama Separate Account and
Connecticut Mutual Variable Life Separate Account I (hereinafter collectively
the "Accounts"), Oppenheimer Variable Account Funds (hereinafter the "Fund") and
OppenheimerFunds, Inc. (hereinafter the "Adviser").
WHEREAS, the Fund is an open-end management investment company
and is available to act as the investment vehicle for separate accounts now in
existence or to be established at any date hereafter for variable life insurance
policies and variable annuity contracts (collectively, the "Variable Insurance
Products") offered by insurance companies (hereinafter "Participating Insurance
Companies");
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<PAGE>
WHEREAS, the beneficial interests in the Fund is divided into
several series of shares, each series being designated a "Portfolio", and each
Portfolio being a particular managed pool of securities and other assets;
WHEREAS, the Fund has obtained an order from the Securities
and Exchange Commission (hereinafter the "SEC"), dated July 16, 1986 (File No.
812-6324) granting Participating Insurance Companies and variable annuity and
variable life insurance separate accounts exemptions from the provisions of
sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as
amended, (hereinafter the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies (hereinafter the
"Shared Funding Exemptive Order")
WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and its shares are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act");
WHEREAS, the Adviser is duly registered as an investment
adviser under the federal Investment Advisers Act of 1940;
WHEREAS, the Companies have registered or will register
certain variable annuity and/or life insurance contracts under the 1933 Act
(hereinafter "Contracts");
WHEREAS, the Accounts are duly organized, validly existing
segregated asset accounts, established by resolution of the Board of Directors
of the Companies, to set aside and invest assets attributable to the aforesaid
variable contracts (the Contract(s) and the Account(s) covered by the Agreement
are specified in Schedule B attached hereto, as may be modified from time to
time);
WHEREAS, the Companies have registered or will register the
Accounts as unit investment trusts under the 1940 Act;
WHEREAS, to the extent permitted by applicable insurance laws
and regulations, the Companies intend to purchase shares in the Portfolios (the
Portfolios covered by this Agreement are specified in Schedule A attached hereto
as may be modified from time to time), on behalf of the Accounts (which are also
described on Schedule A, as may be modified from time to time) to fund the
Contracts and the Fund is authorized to sell such shares to unit investment
trusts such as the Accounts at net asset value; and
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<PAGE>
WHEREAS, the Companies, the Fund and the Adviser are parties
to an agreement (the "Prior Agreement") dated December 15, 1993, amended on
September 15, 1994 and July 1, 1995, and an agreement dated January 12, 1996
("Prior Agreement") pursuant to which shares of certain Portfolios of the Fund
are made available as the underlying investment for one of the Accounts, and the
parties wish to have this Agreement replace the Prior Agreement(s);
NOW, THEREFORE, in consideration of their mutual promises, the
Fund, the Adviser and the Companies agree as follows:
ARTICLE I. Sale of Fund Shares
-------------------
1.1. The Fund agrees to sell to the Companies those shares of the
Fund which the Companies order on behalf of the Accounts, executing such orders
on a daily basis at the net asset value next computed after receipt by the Fund
or its designee of the order for the shares of the Fund. For purposes of this
Section 1.1, the Companies shall be the designee of the Fund for receipt of such
orders from each Account and receipt by such designee shall constitute receipt
by the Fund; provided that the Fund receives written (or facsimile) notice of
such order by 9:30 a.m. New York time on the next following Business Day.
"Business Day" shall mean any day on which the New York Stock Exchange is open
for trading and on which the Fund calculates its net asset value pursuant to the
rules of the SEC.
1.2. The Companies shall pay for Fund shares on the same Business Day
that they place an order to purchase Fund shares in accordance with Section 1.1
hereof. Payment shall be in federal funds transmitted by wire net of any credit
for any shares redeemed by that Company.
1.3. The Fund agrees to make an indefinite number of Fund shares
available for purchase at the applicable net asset value per share by the
Companies for their separate accounts listed in Schedule B, on those days on
which the Fund calculates its net asset value pursuant to rules of the SEC;
provided, however, that the Board of Trustees of the Fund (hereinafter the
"Trustees") may refuse to sell shares of any Portfolio to any person, or suspend
or terminate the offering of shares of any Portfolio if such action is required
by law or by regulatory authorities having jurisdiction or is, in the sole
discretion of the Trustees, acting in good faith and in light of their fiduciary
duties under federal and any applicable state laws, in the best interests of the
shareholders of any Portfolio.
-47-
<PAGE>
1.4. The Fund agrees that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts, qualified pension
and retirement plans or such other persons as are permitted under applicable
provisions of the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code"), and regulations promulgated thereunder, the sale of which will
not impair the tax treatment currently afforded the contracts.
1.5. The Fund shall not sell Fund shares to any insurance company or
separate account unless a contractual obligation is in effect with respect to
such sales to abide by the conditions of the Mixed and Shared Funding Exemptive
Order that are addressed in Section 3.4 and Article VII of this Agreement.
1.6. The Fund agrees to redeem for cash, upon a Company's request,
any full or fractional shares of the Fund held by that Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption. For purposes of this
Section 1.6, the Companies shall be the designee of the Fund for receipt of
requests for redemption and receipt by such designee shall constitute receipt by
the Fund; provided that the Fund receives written (or facsimile) notice of such
request for redemption by 9:30 a.m. New York time on the next following Business
Day. Payment shall be made within the time period specified in the Fund's
prospectus or statement of additional information, in federal funds transmitted
by wire to that Company's account as designated by the Companies in writing from
time to time.
1.7. The Companies shall pay for the Fund shares on the next Business
Day after an order to purchase shares is made in accordance with the provisions
of Section 1.6 hereof. Payment shall be in federal funds transmitted by wire
pursuant to the instructions of the Fund's treasurer or by a credit for any
shares redeemed.
1.8. The Companies agree to purchase and redeem the shares of the
Portfolios named in Schedule A offered by the then current prospectus and
statement of additional information of the Fund in accordance with the
provisions of such prospectus and statement of additional information. The
Companies shall not permit any person other than a Contract owner to give
instructions to that Company which would require that Company to redeem or
exchange shares of the Fund.
1.9. Issuance and transfer of the Funds' shares will be by book entry
only. Stock certificates will not be issued to the Company or the Account.
Purchase and redemption orders for
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<PAGE>
Fund shares will be recorded in an appropriate title for each Account or the
appropriate subaccount of each Account.
1.10. The Fund shall furnish notice as soon as reasonably practicable
to the Companies of any income, dividends or capital gain distributions payable
on the Portfolio's shares. The Company hereby elects to receive all such
dividends and distributions as are payable on the Portfolio shares in additional
shares of that Portfolio. The Companies reserve the right to revoke this
election on 10 business days notice and thereafter to receive all such dividends
and distributions in cash. The Fund shall notify the Companies of the number of
shares so issued as payment of such dividends and distributions.
1.11. The Fund shall make the net asset value per share for each
Portfolio available to the Companies on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 5:30 p.m. New
York time.
ARTICLE II. Sales Material, Prospectuses and Other Reports
----------------------------------------------
2.1. The Companies shall furnish, or shall cause to be furnished, to
the Fund or its designee, each piece of sales literature or other promotional
material in which the Fund or the Adviser is named, at least ten Business Days
prior to its use. No such material shall be used if the Fund or its designee
reasonably object to such use within ten Business Days after receipt of such
material.
2.2. The Companies shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sale literature or other promotional material approved by the Fund or its
designee, except with the permission of the Fund.
2.3. For purposes of this Article II, the phrase "sales literature
or other promotional material" means advertisements (such as material published,
or designed for use in, a newspaper, magazine, or other periodical, radio,
television, telephone or tape recording, videotape display, signs or billboards,
motion pictures, electronic media, or other public media), and sales literature
(including any written communication distributed or made generally available to
customers
-49-
<PAGE>
or the public, including brochures, circulars, market letters, form letters,
seminar texts, or excerpts of any other advertisement, sales literature or
published article), educational material or other communications, distributed or
made generally available to customers or the public.
2.4. The Fund shall provide one or more diskettes containing its
current prospectus in WordPerfect and EDGAR format, within a reasonable period
of its filing date, and provide other assistance as is reasonably necessary in
order for the Companies once each year (or more frequently if the prospectus for
the Fund is supplemented or amended) to have the prospectus for the Contracts
and the Fund's prospectus printed together in one document (such printing to be
at the Companies' expense). The Adviser shall be permitted to review and approve
the typeset form of the Fund's Prospectus prior to such printing.
2.5. The Fund or the Adviser shall provide the Companies with
either: (i) a diskette or modem transmission (or other automated transmission)
containing the Fund's proxy material, reports to shareholders, other information
relating to the Fund necessary to prepare financial reports, and other
communications to shareholders for printing and distribution to Contract owners
at the Companies' expense, or (ii) camera ready and/or printed copies, if
appropriate, of such material for distribution to Contract owners at the
Companies' expense, within a reasonable period of the filing date for definitive
copies of such material. The Adviser shall be permitted to review and approve
the typeset form of such proxy material and shareholder reports prior to such
printing provided such materials have been provided within a reasonable period.
ARTICLE III. Fees and Expenses
-----------------
3.1. The Fund and Adviser shall pay no fee or other compensation to
the Companies under this agreement, and the Companies shall pay no fee or other
compensation to the Fund or Adviser, except as provided herein.
3.2. All expenses incident to performance by each party of its
respective duties under this Agreement shall be paid by that party. The Fund
shall see to it that all its shares are registered and authorized for issuance
in accordance with applicable federal law and, if and to the extent advisable by
the Fund, in accordance with applicable state laws prior to their sale. The Fund
shall bear the expenses for the cost of registration and qualification of the
Fund's shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, and the preparation of all statements
and notices required by any applicable federal or state law.
3.3. Unless mutually agreed upon to the contrary in writing, the
Companies shall bear the expenses of typesetting, printing and distributing the
Fund's prospectus, proxy materials,
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<PAGE>
communications and reports to owners of Contracts issued by the Companies. The
Adviser agrees to use reasonable efforts to restrict the number of shareholder
meetings of the Fund that require the Company to bear the expenses of
typesetting, printing and distributing the Fund's proxy material to one per
fiscal year of the Fund.
3.4. In the event the Fund adds one or more additional Portfolios
and the Companies desire to make such Portfolios available to their respective
Contract owners as an underlying investment medium, a new Schedule A or an
amendment to this Agreement shall be executed by the parties authorizing the
issuance of shares of the new Portfolios to the particular Account. The
amendment may also provide for the sharing of expenses for the establishment of
new Portfolios among Participating Insurance Companies desiring to invest in
such Portfolios and the provision of funds as the initial investment in the new
Portfolios.
ARTICLE IV. Potential Conflicts
-------------------
4.1. The Board of Trustees of the Fund (the "Board") will monitor
the Fund for the existence of any material irreconcilable conflict between the
interests of the Contract owners of all separate accounts investing in the Fund.
An irreconcilable material conflict may arise for a variety of reasons,
including: (a) an action by any state insurance regulatory authority; (b) a
change in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any Portfolio
are being managed; (e) a difference in voting instructions given by variable
annuity contract and variable life insurance contract owners; or (f) a decision
by an insurer to disregard the voting instructions of Contract owners. The Board
shall promptly inform the Companies if it determines that an irreconcilable
material conflict exists and the implications thereof.
4.2. The Companies will each report any potential or existing
conflicts of which it is aware to the Board, and agrees to be bound by the
Shared Funding Exemptive Order. The Companies will assist the Board in carrying
out its responsibilities in monitoring such conflicts by providing the Board in
a timely manner with all information reasonably necessary for the Board to
consider any issues raised. This includes, but is not limited to, an obligation
by the Companies to inform the Board whenever Contract owner voting instructions
are disregarded and by confirming in writing, at the Fund's request, that the
Companies are unaware of any such potential or existing material irreconcilable
conflicts.
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<PAGE>
4.3. If it is determined by a majority of the Board, or a majority
of its disinterested Trustees, that a material irreconcilable conflict exists,
the Companies shall, at their expense and to the extent reasonably practicable
(as determined by a majority of the disinterested trustees), take whatever steps
are necessary to remedy or eliminate the irreconcilable material conflict, up to
an including: (1) withdrawing the assets allocable to some or all of the
separate accounts from the Fund or any Portfolio and reinvesting such assets in
a different investment medium, including (but not limited to) another Portfolio
of the Fund, or submitting the question whether such segregation should be
implemented to a vote of all affected Contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., annuity contract owners,
life insurance contract owners, or variable contract owners of one or more
Participating Insurance Companies) that votes in favor of such segregation, or
offering to the affected Contract owners the option of making such a change; and
(2) establishing a new registered management investment company or managed
separate account.
4.4. If a material irreconcilable conflict arises because of a
decision by either Company to disregard Contract owner voting instructions and
that decision represents a minority position or would preclude a majority vote,
such Company may be required, at the Fund's election, to withdraw the affected
Account's investment in the Fund and terminate this Agreement; provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Board. Any such withdrawal and
termination must take place within six (6) months after the Fund gives written
notice that this provision is being implemented, and until the end of the six
month period the Fund shall continue to accept and implement orders by such
Company for the purchase and redemption of shares of the Fund.
4.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to such Company
conflicts with the majority of other state regulators, then the affected Company
will withdraw such Account's investment in the Fund and terminate this Agreement
within six months after the Board informs such Company in writing that it has
determined that such decision has created an irreconcilable material conflict;
provided, however, that such withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable conflict as determined
by a majority of the disinterested members of the Board. Until the end of the
foregoing six month period, the Fund shall continue to accept and implement
orders
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<PAGE>
by such Company for the purchase and redemption of shares of the Fund, subject
to applicable regulatory limitation.
4.6. For purposes of Sections 4.3 through 4.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. In such case a Company shall not be required by Section 4.3 to
establish a new funding medium for Contracts if an offer to do so has been
declined by vote of a majority of Contract owners materially adversely affected
by the irreconcilable material conflict. In the event that the Board determines
that any proposed action does not adequately remedy any irreconcilable material
conflict, then such Company will withdraw the particular Account's investment in
the Fund and terminate this Agreement within six (6) months after the Board
informs the Company in writing of the foregoing determination, provided,
however, that such withdrawal and termination shall be limited to the extent
required by any such material irreconcilable conflict as determined by a
majority of the disinterested members of the Board.
ARTICLE V. Applicable Law
--------------
5.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of New York
5.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Securities and Exchange Commission may grant (including, but not limited to, the
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE VI. Termination
-----------
6.1 This Agreement shall terminate with respect to some or all
Portfolios:
(a) at the option of any party upon six month's advance written
notice to the other parties;
(b) at the option of either Company to the extent that shares
of Portfolios are not reasonably available to meet the requirements of its
Contracts or are not appropriate funding vehicles for such Contracts, as
determined by that Company reasonably and in good faith. Prompt
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<PAGE>
notice of the election to terminate for such cause and an explanation of such
cause shall be furnished by that Company; or
(c) as provided in Article IV 6.2. It is understood and agreed
that the right of any party hereto to terminate this Agreement pursuant to
Section 6.1(a) may be exercised for cause or for no cause.
ARTICLE VII. Notices
-------
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify to the
other party.
If to the Fund:
Oppenheimer Variable Account Funds
c/o OppenheimerFunds, Inc.
2 World Trade Center
New York, NY 10048-0203
Attn: Legal Department
If to the Adviser:
OppenheimerFunds, Inc.
2 World Trade Center
New York, NY 10048-0203
Attn: General Counsel
If to the Companies:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111-0001
Attn: Lawrence V. Burkett, Jr.
Executive Vice President & General Counsel
C.M. Life Insurance Company
1295 State Street
Springfield, MA 01111-0001
Attn: Lawrence V. Burkett, Jr.
Director, President and Chief Executive Officer
ARTICLE VIII. Miscellaneous
-------------
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<PAGE>
8.1. Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as confidential the names
and addresses of the owners of the Contracts and all information reasonably
identified as confidential in writing by any other party hereto and, except as
permitted by this Agreement, shall not disclose, disseminate or utilize such
names and addresses and other confidential information without the express
written consent of the affected party until such time as it may come into the
public domain.
8.2. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
8.3. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one and the
same instrument.
8.4. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
8.5. Each party hereto shall cooperate with, and promptly
notify each other party and all appropriate governmental authorities (including
without limitation the Securities and Exchange Commission, the NASD and state
insurance regulators) and shall permit such authorities reasonable access to its
books and records in connection with any investigation or inquiry relating to
this Agreement or the transactions contemplated hereby.
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<PAGE>
8.6. The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
8.7. It is understood by the parties that this Agreement is
not an exclusive arrangement in any respect.
8.8. The Companies and the Adviser each understand and agree
that the obligations of the Fund under this Agreement are not binding upon any
shareholder of the Fund personally, but bind only the Fund and the Fund's
property; the Companies and the Adviser each represent that it has notice of the
provisions of the Declaration of Trust of the Fund disclaiming shareholder
liability for acts or obligations of the Fund.
8.9. The parties agree that the Companies may, on behalf of
their respective Accounts and Contracts listed in Exhibits A and B, elect to
make additional Portfolios available to Accounts upon the approval of the
Adviser and the provision of reasonable notice to the Adviser. Any Portfolio so
added will be subject to all of the terms and conditions of this Agreement.
8.10. The prior Agreement is superseded in its entirety by
this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed as of the date specified
below.
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By its authorized officer,
By:
----------------------------------
Lawrence V. Burkett, Jr.
Title: Executive Vice President &
--------------------------
General Counsel
---------------
Date:
--------------------------------
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MML BAY STATE LIFE INSURANCE COMPANY
By its authorized officer,
By:
----------------------------------
Lawrence V. Burkett, Jr.
Title: Director, President & Chief
---------------------------
Executive Officer
-----------------
Date:
--------------------------------
C.M. LIFE INSURANCE COMPANY
By its authorized officer,
By:
----------------------------------
Lawrence B. Burkett, Jr.
Title: Director, President & Chief
---------------------------
Executive Officer
-----------------
OPPENHEIMER VARIABLE ACCOUNT
FUNDS
By its authorized officer,
By:
----------------------------------
Title:
-------------------------------
Date:
--------------------------------
OPPENHEIMERFUNDS, INC.
By its authorized officer,
By:
----------------------------------
Title:
-------------------------------
Date:
--------------------------------
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1(A)(8)(b)
PARTICIPATION AGREEMENT
-----------------------
Among
T. ROWE PRICE EQUITY SERIES, INC.,
T. ROWE PRICE INVESTMENT SERVICES, INC.,
and
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of this _________ day of
__________, 1998 by and among Massachusetts Mutual Life Insurance Company
(hereinafter, the "Company"), a Massachusetts insurance company, on its own
behalf and on behalf of each segregated asset account of the Company set forth
on Schedule A hereto as may be amended from time to time (each account
hereinafter referred to as the "Account" or "Accounts", as applicable ), and the
undersigned fund, a corporation organized under the laws of Maryland (each
hereinafter referred to as the "Fund") and T. Rowe Price Investment Services,
Inc. (hereinafter the "Underwriter"), a Maryland corporation.
WHEREAS, the Fund engages in business as an open-end management
investment company and is or will be available to act as the investment vehicle
for separate accounts established for variable life insurance and variable
annuity contracts (the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Fund and
Underwriter (hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each designated a "Portfolio" and representing the interest in
a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission ("SEC") granting Participating Insurance Companies and
variable annuity and variable life insurance separate accounts exemptions from
the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment
Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules
6e-2(b)(15) and 6e-3(T) (b)(15) thereunder, to the extent necessary to permit
shares of the Fund to be sold to and held by variable annuity and variable life
insurance separate accounts of both affiliated and unaffiliated life insurance
companies (hereinafter the "Shared Funding Exemptive Order"); and
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WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and shares of the Portfolios are
registered under the Securities Act of 1933, as amended (hereinafter the "1933
Act"); and
WHEREAS, T. Rowe Price Associates, Inc. and Rowe Price-Fleming
International, Inc. (each hereinafter referred to as the "Adviser") are each
duly registered as an investment adviser under the Investment Advisers Act of
1940, as amended, and any applicable state securities laws; and WHEREAS, the
Company has registered or will register certain variable life insurance or
variable annuity contracts supported wholly or partially by the Account (the
"Contracts") under the 1933 Act, and said Contracts are listed in Schedule A
hereto, as it may be amended from time to time by mutual written agreement; and
WHEREAS, the Account is duly established and maintained as a
segregated asset account, established by resolution of the Board of Directors of
the Company, on the date shown for such Account on Schedule A hereto, to set
aside and invest assets attributable to the aforesaid Contracts; and
WHEREAS, the Company has registered or will register the Account
as a unit investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with
the SEC under the Securities Exchange Act of 1934, as amended (hereinafter the
"1934 Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc. (hereinafter "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios listed in
Schedule A hereto, as it may be amended from time to time by mutual written
agreement (the "Designated Portfolios") on behalf of the Account to fund the
aforesaid Contracts, and the Underwriter is authorized to sell such shares to
unit investment trusts such as the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
-------------------
1.1 The Underwriter agrees to sell to the Company those shares of
the Designated Portfolios which the Account orders, executing such orders on a
daily basis at the net asset value next computed after receipt by the Fund or
its designee of the order for the shares of the Designated Portfolios.
1.2 The Fund agrees to make shares of the Designated Portfolios
available for purchase at the applicable net asset value per share by the
Company and the Account on those days on which the Fund calculates its net asset
value pursuant to rules of the SEC, and the Fund
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<PAGE>
shall use its best efforts to calculate such net asset value on each day which
the New York Stock Exchange is open for trading. Notwithstanding the foregoing,
the Board of Directors of the Fund (hereinafter the "Board") may refuse to sell
shares of any Designated Portfolio to any person, or suspend or terminate the
offering of shares of any Designated Portfolio if such action is required by law
or by regulatory authorities having jurisdiction, or is, in the sole discretion
of the Board acting in good faith and in light of their fiduciary duties under
federal and any applicable state laws, necessary in the best interests of the
shareholders of such Designated Portfolio.
1.3 The Fund and the Underwriter agree that shares of the Fund will be
sold only to Participating Insurance Companies and their separate accounts. No
shares of any Designated Portfolios will be sold to the general public. The Fund
and the Underwriter will not sell Fund shares to any insurance company or
separate account unless an agreement containing provisions substantially the
same as Articles I, III and VII of this Agreement is in effect to govern such
sales.
1.4 The Fund agrees to redeem, on the Company's request, any full or
fractional shares of the Designated Portfolios held by the Company, executing
such requests on a daily basis at the net asset value next computed after
receipt by the Fund or its designee of the request for redemption, except that
the Fund reserves the right to suspend the right of redemption or postpone the
date of payment or satisfaction upon redemption consistent with Section 22(e) of
the 1940 Act and any sales thereunder, and in accordance with the procedures and
policies of the Fund as described in the then current prospectus.
1.5 For purposes of Sections 1.1 and 1.4, the Company shall be the
designee of the Fund for receipt of purchase and redemption orders from the
Account, and receipt by such designee shall constitute receipt by the Fund;
provided that the Company receives the order by 4:00 p.m. Eastern time and the
Fund receives notice of such order by 9:30 a.m. Eastern time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the SEC.
1.6 The Company agrees to purchase and redeem the shares of each
Designated Portfolio offered by the then current prospectus of the Fund and in
accordance with the provisions of such prospectus.
1.7 The Company shall pay for Fund shares one Business Day after
receipt of an order to purchase Fund shares is made in accordance with the
provisions of Section 1.5 hereof. Payment shall be in federal funds transmitted
by wire by 3:00 p.m. Eastern time. If payment in Federal Funds for any purchase
is not received or is received by the Fund after 3:00 p.m. Eastern time on such
Business Day, the Company shall promptly, upon the Fund's request, reimburse the
Fund for any charges, costs, fees, interest or other expenses incurred by the
Fund in connection with any advances to, or borrowings or overdrafts by, the
Fund, or any similar expenses incurred by the Fund, as a result of portfolio
transactions effected by the Fund based upon such purchase request. For purposes
of Section 2.8 and 2.9 hereof, upon receipt by the Fund of the federal funds so
wired, such funds shall cease to be the responsibility of the Company and shall
become the responsibility of the Fund
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<PAGE>
1.8 Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
1.9 The Fund shall furnish same day notice (by electronic transmission
and/or facsimile as outlined in Section 1.10 hereof) to the Company of any
income, dividends or capital gain distributions payable on the Designated
Portfolios' shares. The Company hereby elects to receive all such income,
dividends, and capital gain distributions as are payable on Designated Portfolio
shares in additional shares of that Portfolio. The Company reserves the right to
revoke this election and to receive all such income dividends and capital gain
distributions in cash. The Fund shall notify the Company of the number of shares
so issued as payment of such dividends and distributions.
1.10 The Fund shall make the net asset value per share, including total
shares outstanding, for each Designated Portfolio available to the Company on a
daily basis as soon as reasonably practical after the net asset value per share
is calculated (normally each business day by 6:30 p.m. Eastern time via
electronic transmission and/or facsimile) and shall use its best efforts to make
such net asset value per share available by 7 p.m. Eastern time. If the net
asset value is materially incorrect through no fault of the Company, the Company
on behalf of each Account, shall be entitled to an adjustment to the number of
shares purchased or redeemed to reflect the correct net asset value in
accordance with Fund procedures, and the Company shall not bear the cost of such
correction. Any material error in the net asset value shall be reported to the
Company promptly upon discovery (via telephone followed by written documentation
of the error).
1.11 The Parties hereto acknowledge that the arrangement contemplated
by this Agreement is not exclusive; the Fund's shares may be sold to other
insurance companies (subject to Section 1.3 and Article VI hereof) and the cash
value of the Contracts may be invested in other investment companies.
ARTICLE II. Representations and Warranties
------------------------------
2.1 The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act; that the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws,
and that the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established the Account
prior to any issuance or sale thereof as a segregated asset account under the
Massachusetts insurance laws and has registered or, prior to any issuance or
sale of the Contracts, will register the Account as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Contracts.
2.2 The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of Massachusetts and
all applicable federal and state
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<PAGE>
securities laws and that the Fund is and shall remain registered under the 1940
Act. The Fund shall amend the Registration Statement for its shares under the
1933 Act and the 1940 Act from time to time as required in order to effect the
continuous offering of its shares. The Fund shall register and qualify the
shares for sale in accordance with the laws of the various states only if and to
the extent deemed advisable by the Fund or the Underwriter.
2.3 The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, although it may
make such payments in the future. To the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1, the Fund will undertake to have
the Board, a majority of whom are not interested persons of the Fund, formulate
and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance
distribution expenses.
2.4 The Fund makes no representations as to whether any aspect of its
operations, including but not limited to, investment policies, fees and
expenses, complies with the insurance and other applicable laws of the various
states, except that the Fund represents that the Fund's investment policies,
fees and expenses are and shall at all times remain in compliance with the laws
of the State of Massachusetts to the extent required to perform this Agreement.
2.5 The Fund represents that it is lawfully organized and validly
existing under the laws of the State of Maryland and that it does and will
comply in all material respects with the 1940 Act.
2.6 The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with the laws of the State of Massachusetts and any applicable
state and federal securities laws.
2.7 The Underwriter represents and warrants that the Adviser is and
shall remain duly registered under all applicable federal and state securities
laws and that the Adviser shall perform its obligations for the Fund in
compliance in all material respects with the laws of the State of Massachusetts
and any applicable state and federal securities laws.
2.8 The Fund and the Underwriter represent and warrant that all of
their directors, officers, employees, investment advisers, and other individuals
or entities dealing with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the Fund in an amount not less than the minimum
coverage as required currently by Rule 17g-1 of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
2.9 The Company represents and warrants that all of its directors,
officers, employees, and other individuals/entities employed or controlled by
the Company dealing with the money and/or securities of the Fund are covered by
a blanket fidelity bond or similar coverage in an amount not less than $5
million. The aforesaid bond includes coverage for larceny and embezzlement and
is issued by a reputable bonding company. The Company agrees that any
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<PAGE>
amounts received under such bond in connection with claims that arise from the
arrangements described in this Agreement will be held by the Company for the
benefit of the Fund. The Company agrees to make all reasonable efforts to see
that this bond or another bond containing these provisions is always in effect,
and agrees to notify the Fund and the Underwriter in the event that such
coverage no longer applies. The Company agrees to exercise its best efforts to
ensure that other individuals/entities not employed or controlled by the Company
and dealing with the money and/or securities of the Fund maintain a similar bond
or coverage in a reasonable amount.
ARTICLE III. Prospectuses, Statements of Additional Information, and Proxy
-------------------------------------------------------------
Statements; Voting
- ------------------
3.1 The Underwriter shall provide the Company with as many copies of
the Fund's current prospectus (describing only the Designated Portfolios listed
on Schedule A) as the Company may reasonably request for distribution to
existing owners of the Contracts. If requested by the Company, the Fund shall
provide the Company with, at the Company's option, camera ready or pdf files, of
fund prospectuses, Statements of Additional Information, proxy material, annual
reports and any similar material that is to be distributed to Contract owners
and other assistance as is reasonably necessary in order for the Company once
each year (or more frequently if the Fund prospectus is amended) to have the
prospectus for the Contracts and the Fund's prospectus printed together in one
document (such printing to be at the Company's expense). The Fund will use its
best efforts to provide such Fund prospectus or Statement of Additional
Information, in the format (camera ready or pdf files) selected by the Company,
within a reasonable period of the preparation of such material to ensure that
they can be integrated into Company material also being distributed to Contract
owners. The Company will give the Fund reasonable advance notice of the date
when such material is being prepared.
3.2 The Fund's prospectus shall state that the current Statement of
Additional Information ("SAI") for the Fund is available from the Company (or,
in the Fund's discretion, from the Fund), and the Underwriter (or the Fund), at
its expense, shall print, or otherwise reproduce, and provide a copy of such SAI
free of charge to the Company for itself and for any owner of a Contract who
requests such SAI.
3.3 The Fund, at its expense, shall provide the Company with copies of
its proxy material, reports to shareholders, and other communications to
shareholders in such quantity as the Company shall reasonably require for
distributing to Contract owners in the Fund. The Underwriter (at the Company's
expense) shall provide the Company with copies of the Fund's annual and
semi-annual reports to shareholders in such quantity as the Company shall
reasonably request for use in connection with offering the Variable Contracts
issued by the Company. If requested by the Company in lieu thereof, the
Underwriter shall provide such documentation to the Company with, at the
Company's option, camera ready or pfd files and other assistance as is
reasonably necessary in order for the Company (at the Company's expense) to
print such shareholder communications for distribution to Contract owners. The
Underwriter shall use its best efforts to notify the Company of any proxy
proposals for shareholders as soon as Underwriter is aware of such proposals and
provided that such notice is permissible under applicable state and federal
securities laws.
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3.4 The Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of
such Designated Portfolio for which instructions have
been received,
so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners or to the
extent otherwise required by law. The Company reserves the right to vote Fund
shares held in any segregated asset account in its own right, to the extent
permitted by law.
3.5 Participating Insurance Companies shall be responsible for assuring
that each of their separate accounts participating in a Designated Portfolio
calculates voting privileges as required by the Shared Funding Exemptive Order
and consistent with any reasonable standards that the Fund may adopt.
3.6 The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the Fund
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the SEC's interpretation of the requirements of Section 16(a)
with respect to periodic elections of directors or trustees and with whatever
rules the SEC may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
------------------------------
4.1 The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material that the Company develops or uses and in which the Fund (or a Portfolio
thereof) or the Adviser or the Underwriter is named, at least five business days
prior to its use. No such material shall be used if the Fund or its designee
reasonably object to such use within five business days after receipt of such
material. The Fund or its designee reserves the right to reasonably object to
the continued use of such material, and no such material shall be used if the
Fund or its designee so object. The review procedures of this paragraph shall
not apply to any advertising or sales literature produced by the Company if all
references in such literature regarding the Fund are identical to those that
appear in the Fund's prospectus or Statement of Additional Information.
4.2 The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or
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prospectus or SAI for the Fund shares, as such registration statement and
prospectus or SAI may be amended or supplemented from time to time, or in
reports or proxy statements for the Fund, or in sales literature or other
promotional material approved by the Fund or its designee or by the Underwriter,
except with the permission of the Fund or the Underwriter or the designee of
either.
4.3 The Fund, Underwriter, or its designee shall furnish, or shall
cause to be furnished, to the Company, each piece of sales literature or other
promotional material in which the Company, and/or its Account, is named at least
five business days prior to its use. No such material shall be used if the
Company reasonably objects to such use within five business days after receipt
of such material. The Company reserves the right to reasonably object to the
continued use of such material and no such material shall be used if the Company
so objects.
4.4. The Fund and the Underwriter shall not give any information or
make any representations on behalf of the Company or concerning the Company, the
Account, or the Contracts other than the information or representations
contained in a registration statement, prospectus, or SAI for the Contracts, as
such registration statement, prospectus or SAI may be amended or supplemented
from time to time, or in published reports for the Account which are in the
public domain or approved by the Company for distribution to Contract owners, or
in sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5 The Fund will provide to the Company at the Company's request, at
least one complete copy of all registration statements, prospectuses, SAIs,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Fund or its shares, within a reasonable
time after the filing of such document(s) with the SEC or other regulatory
authorities.
4.6 The Company will provide to the Fund, at the Fund's request, at
least one complete copy of all registration statements, prospectuses, SAIs,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Contracts or
the Account, within a reasonable time after the filing of such document(s) with
the SEC or other regulatory authorities.
4.7 For purposes of this Article IV, the phrase "sales literature and
other promotional materials" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
SAIs, shareholder reports, proxy materials, and any other communications
distributed or made generally available with regard to the Funds.
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ARTICLE V. Fees and Expenses
-----------------
5.1 The Fund and the Underwriter shall pay no fee or other compensation
to the Company under this Agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule 12b-1 to finance distribution
expenses, then the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the Underwriter in
writing, and such payments will be made out of existing fees otherwise payable
to the Underwriter, past profits of the Underwriter, or other resources
available to the Underwriter. No such payments shall be made directly by the
Fund. Currently, no such payments are contemplated.
5.2 All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund, except as otherwise provided herein. The
Fund shall see to it that all its shares are registered and authorized for
issuance in accordance with applicable federal law and, if and to the extent
deemed advisable by the Fund, in accordance with applicable state laws prior to
their sale. The Fund shall bear the expenses for the cost of registration and
qualification of the Fund's shares, preparation and filing of the Fund's
prospectus and registration statement, proxy materials and reports, setting the
prospectus in type, setting in type and printing the proxy materials and reports
to shareholders (including the costs of printing a prospectus that constitutes
an annual report), the preparation of all statements and notices required by any
federal or state law, and all taxes on the issuance or transfer of the Fund's
shares.
5.3 The Company shall bear the expenses of printing the Fund's
prospectus (in accordance with 3.1) and of distributing the Fund's prospectus,
proxy materials, and reports to Contract owners and prospective Contract owners.
ARTICLE VI. Diversification and Qualification
---------------------------------
6.1 The Fund will invest the assets of each Designated Portfolio in
such a manner as to ensure that the Contracts will be treated as annuity,
endowment, or life insurance contracts, whichever is appropriate, under the
Internal Revenue Code of 1986, as amended (the "Code") and the regulations
issued thereunder (or any successor provisions). Without limiting the scope of
the foregoing, each Designated Portfolio of the Fund will comply with Section
817(h) of the Code and Treasury Regulation (S)1.817-5, and any Treasury
interpretations thereof, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts, and any amendments or
other modifications or successor provisions to such Section or Regulations. In
the event of a breach of this Article VI by the Fund, it will take all
reasonable steps (a) to notify the Company of such breach and (b) to adequately
diversify the Fund so as to achieve compliance within the grace period afforded
by Regulation (S)1.817-5.
6.2 The Fund represents that each Designated Portfolio is or will be
qualified as a Regulated Investment Company under Subchapter M of the Code, and
that it will make every effort to maintain such qualification (under Subchapter
M or any successor or similar provisions) and that it will notify the Company
immediately upon having a reasonable basis for believing that it has ceased to
so qualify or that it might not so qualify in the future.
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6.3 The Company represents that the Contracts are currently, and at
the time of issuance shall be, treated as life insurance, endowment contracts,
or annuity insurance contracts, under applicable provisions of the Code, and
that it will make every effort to maintain such treatment, and that it will
notify the Fund and the Underwriter immediately upon having a reasonable basis
for believing the Contracts have ceased to be so treated or that they might not
be so treated in the future. The Company agrees that any prospectus offering a
contract that is a "modified endowment contract" as that term is defined in
Section 7702A of the Code (or any successor or similar provision), shall
identify such contract as a modified endowment contract.
ARTICLE VII. Potential Conflicts.
--------------------
7.1 The Board will monitor the Fund for the existence of any
material irreconcilable conflict between the interests of the contract owners of
all separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Board shall promptly inform the Company if
it determines that an irreconcilable material conflict exists and the
implications thereof.
7.2. The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order, by providing
the Board with all information reasonably necessary for the Board to consider
any issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever Contract owner voting instructions are
disregarded.
7.3 If it is determined by a majority of the Board, or a majority of
its disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested Board members), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2), establishing a new
registered management investment company or managed separate account.
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7.4 If a material irreconcilable conflict arises because of a
decision by the Company to disregard contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect to
such Account provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested members of the Board. Any such
withdrawal and termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented, and until the end
of that six month period the Fund shall continue to accept and implement orders
by the Company for the purchase (and redemption) of shares of the Fund.
7.5 If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.
Until the end of the foregoing six month period, the Fund shall continue to
accept and implement orders by the company for the purchase (and redemption) of
shares of the Fund.
7.6 For purposes of Section 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contract if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination; provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7 If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, 3.6, 7.1., 7.2, 7.3, 7.4, and 7.5 of this Agreement
shall continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in such Rule(s) as
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so amended or adopted.
ARTICLE VIII. Indemnification
---------------
8.1 Indemnification By the Company
------------------------------
8.1(a). The Company agrees to indemnify and hold harmless the
Fund and the Underwriter and each of their officers and directors and each
person, if any, who controls the Fund or the Underwriter within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes
of this Section 8.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Company)
or litigation (including legal and other expenses), to which the Indemnified
Parties may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact
contained in the Registration Statement, prospectus,
or statement of additional information ("SAI") for the
Contracts or contained in the Contracts or sales
literature or other promotional material for the
Contracts (or any amendment or supplement to any of
the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or
omission was made in reliance upon and in conformity
with information furnished to the Company by or on
behalf of the Fund for use in the Registration
Statement, prospectus or SAI for the Contracts or in
the Contracts or sales literature or other promotional
material (or any amendment or supplement) or otherwise
for use in connection with the sale of the Contracts
or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Registration
Statement, prospectus or sales literature or other
promotional material of the Fund not supplied by the
Company or persons under its control) or wrongful
conduct of the Company or persons under its
authorization or control, with respect to the sale or
distribution of the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
Registration Statement, prospectus, SAI, or sales
literature or other promotional material of the Fund
or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading if such a statement or omission was
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made in reliance upon information furnished to the
Fund by or on behalf of the Company; or
(iv) arise as a result of any material failure by the
Company to provide the services and furnish the
materials under the terms of this Agreement
(including a failure, whether unintentional or in
good faith or otherwise, to comply with the
qualification requirements specified in Article VI
of this Agreement); or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the
Company in this Agreement or arise out of or
result from any other material breach of this
Agreement by the Company,
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
8.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of its obligations or
duties under this Agreement.
8.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Company in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, the Company shall be entitled to participate, at
its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action and to settle the claim at its own expense; provided,
however, that no such settlement shall, without the Indemnified Parties' written
consent, include any factual stipulation referring to the Indemnified Parties or
their conduct. After notice from the Company to such party of the Company's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and the Company will
not be liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the Company
of the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund Shares or the Contracts or the operation
of the Fund.
8.2 Indemnification by the Underwriter
----------------------------------
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8.2(a). The Underwriter agrees to indemnify and hold harmless the
Company and each of it directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
shares or the Contracts; and
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any
material fact contained in the Registration
Statement or prospectus or SAI or sales literature
or other promotional material of the Fund (or any
amendment or supplement to any of the foregoing),
or arise out of or are based upon the omission or
the alleged omission to state therein a material
fact required to be stated therein or necessary to
make the statements therein not misleading,
provided that this agreement to indemnify shall
not apply as to any Indemnified Party if such
statement or omission or such alleged statement or
omission was made in reliance upon and in
conformity with information furnished to the
Underwriter or Fund by or on behalf of the Company
for use in the Registration Statement or
prospectus for the Fund or in sales literature or
other promotional material (or any amendment or
supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Registration
Statement, prospectus or sales literature or other
promotional material for the Contracts not
supplied by the Underwriter or persons under its
control) or wrongful conduct of the Fund or
Underwriter or persons under their control, with
respect to the sale or distribution of the
Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
Registration Statement, prospectus, SAI, or sales
literature or other promotional material of the
Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to
state therein a material fact required to be
stated therein or necessary to make the statement
or statements therein not misleading, if such
statement or omission was made in reliance upon
information furnished to the Company by or on
behalf of the Fund; or
(iv) arise as a result of any material failure by the
Fund to provide the
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<PAGE>
services and furnish the materials under the terms
of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to
comply with the diversification and other
qualification requirements specified in Article VI
of this Agreement); or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the
Underwriter in this Agreement or arise out of or
result from any other material breach of this
Agreement by the Underwriter;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance or such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to the Company or the Account, whichever is applicable.
8.2(c). The Underwriter shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Underwriter in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Party, the Underwriter will be entitled to participate,
at its own expense, in the defense thereof. The Underwriter also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action and to settle the claim at its own expense; provided,
however, that no such settlement shall, without the Indemnified Parties' written
consent, include any factual stipulation referring to the Indemnified Parties or
their conduct. After notice from the Underwriter to such party of the
Underwriter's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Underwriter will not be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.2(d). The Company agrees promptly to notify the Underwriter of
the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the Contracts
or the operation of the Account.
8.3 Indemnification By the Fund
---------------------------
8.3(a). The Fund agrees to indemnify and hold harmless the
Company and each
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of its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.3) against any and all losses, claims,
expenses, damages, liabilities (including amounts paid in settlement with the
written consent of the Fund) or litigation (including legal and other expenses)
to which the Indemnified Parties may be required to pay or may become subject
under any statute or regulation, at common law or otherwise, insofar as such
losses, claims, expenses, damages, liabilities or expenses (or actions in
respect thereof) or settlements, are related to the operations of the Fund and:
(i) arise as a result of any material failure by the
Fund to provide the services and furnish the
materials under the terms of this Agreement
(including a failure, whether unintentional or in
good faith or otherwise, to comply with the
diversification and other qualification
requirements specified in Article VI of this
Agreement); or
(ii) arise out of or result from any material breach of
any representation and/or warranty made by the
Fund in this Agreement or arise out of or result
from any other material breach of this Agreement
by the Fund;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company, the Fund, the Underwriter or the Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be entitled to
assume the expense thereof, with counsel satisfactory to the party named in the
action and to settle the claim at its own expense; provided, however, that no
such settlement shall, without the Indemnified Parties' written consent, include
any factual stipulation referring to the Indemnified Parties or their conduct.
After notice from the Fund to such party of the Fund's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Fund will not be liable to such party
under this Agreement for any legal or other
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<PAGE>
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
8.3(d). The Company and the Underwriter agree promptly to notify
the Fund of the commencement of any litigation or proceeding against it or any
of its respective officers or directors in connection with the Agreement, the
issuance or sale of the Contracts, the operation of the Account, or the sale or
acquisition of shares of the Fund.
ARTICLE IX. Applicable Law
--------------
9.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Maryland.
9.2 This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the SEC
may grant (including, but not limited to, any Shared Funding Exemptive Order)
and the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE X. Termination
-----------
10.1 This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party, for any reason with
respect to some or all Designated Portfolios, by
six (6) months' advance written notice delivered
to the other parties; or
(b) termination by the Company by written notice to
the Fund and the Underwriter with respect to any
Designated Portfolio based upon the Company's
determination that shares of the Fund are not
reasonably available to meet the requirements of
the Contracts; provided that such termination
shall apply only to the Designated Portfolio not
reasonably available; or
(c) termination by the Company by written notice to
the Fund and the Underwriter in the event any of
the Designated Portfolio's shares are not
registered, issued or sold in accordance with
applicable state and/or federal law or such law
precludes the use of such shares as the underlying
investment media of the Contracts issued or to be
issued by the Company; or
(d) termination by the Fund or Underwriter in the
event that formal administrative proceedings are
instituted against the Company by the NASD, the
SEC, the Insurance Commissioner or like official
of any state or any other regulatory body
regarding the Company's duties under this
Agreement or related to the sale of the Contracts,
the operation of any
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Account, or the purchase of the Fund shares;
provided, however, that the Fund or Underwriter
determines in its sole judgment exercised in good
faith, that any such administrative proceedings
will have a material adverse effect upon the
ability of the Company to perform its obligations
under this Agreement; or
(e) termination by the Company in the event that
formal administrative proceedings are instituted
against the Fund or Underwriter by the NASD, the
SEC, or any state securities or insurance
department or any other regulatory body; provided,
however, that the Company determines in its sole
judgment exercised in good faith, that any such
administrative proceedings will have a material
adverse effect upon the ability of the Fund or
Underwriter to perform its obligations under this
Agreement; or
(f) termination by the Company by written notice to
the Fund and the Underwriter with respect to any
Designated Portfolio in the event that such
Designated Portfolio ceases to qualify as a
Regulated Investment Company under Subchapter M or
fails to comply with the Section 817(h)
diversification requirements specified in Article
VI hereof, or if the Company reasonably believes
that such Designated Portfolio may fail to so
qualify or comply; or
(g) termination by the Fund or Underwriter by written
notice to the Company in the event that the
Contracts fail to meet the qualifications
specified in Section 6.3 hereof; or if the Fund or
Underwriter reasonably believes that such
Contracts may fail to so qualify; or
(h) termination by either the Fund or the Underwriter
by written notice to the Company, if either one or
both of the Fund or the Underwriter respectively,
shall determine, in their sole judgment exercised
in good faith, that the Company has suffered a
material adverse change in its business,
operations, financial condition, or prospects
since the date of this Agreement or is the subject
of material adverse publicity; or
(i) termination by the Company by written notice to
the Fund and the Underwriter, if the Company shall
determine, in its sole judgment exercised in good
faith, that the Fund or the Underwriter has
suffered a material adverse change in its
business, operations, financial condition or
prospects since the date of this Agreement or is
the subject of material adverse publicity.
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<PAGE>
10.2 Effect of Termination. Notwithstanding any termination of this
---------------------
Agreement, the Fund and the Underwriter shall, at the option of the Company,
continue to make available additional shares of the Fund pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, the owners of the Existing Contracts may be permitted
to reallocate investments in the Fund, redeem investments in the Fund and/or
invest in the Fund upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 10.2 shall not apply to
any termination under Article VII and the effect of such Article VII termination
shall be governed by Article VII of this Agreement. The parties further agree
that this Section 10.2 shall not apply to any termination under Section 10.1(g)
of this Agreement.
10.3 The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), or (iii) pursuant
to the terms of a substitution order issued by the SEC pursuant to Section 26(b)
of the 1940 Act. Upon request, the Company will promptly furnish to the Fund and
the Underwriter the opinion of counsel for the Company (which counsel shall be
reasonably satisfactory to the Fund and the Underwriter) to the effect that any
redemption pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the Contracts,
the Company shall not prevent Contract owners from allocating payments to a
Portfolio that was otherwise available under the Contracts without first giving
the Fund or the Underwriter 90 days notice of its intention to do so.
10.4 Notwithstanding any termination of this Agreement, each party's
obligation under Article VIII to indemnify the other parties shall survive.
ARTICLE XI. Notices
-------
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Fund:
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Attention: Henry H. Hopkins, Esq.
If to the Company:
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<PAGE>
Massachusetts Mutual Life Insurance Company
Office of the General Counsel
1295 State Street
Springfield, MA 01111- 0001
If to Underwriter:
T. Rowe Price Investment Services
100 East Pratt Street
Baltimore, Maryland 21202
Attention: Henry H. Hopkins, Esq.
ARTICLE XII. Miscellaneous
-------------
12.1 All references herein to the Fund are to each of the undersigned
Funds as if this agreement were between such individual Fund and the Underwriter
and the Company. All references herein to the Adviser relate solely to the
Adviser of such individual Fund, as appropriate. All persons dealing with a Fund
must look solely to the property of such Fund, and in the case of a series
company, the respective Designated Portfolio listed on Schedule A hereto as
though such Designated Portfolio had separately contracted with the Company and
the Underwriter for the enforcement of any claims against the Fund. The parties
agree that neither the Board, officers, agents or shareholders assume any
personal liability or responsibility for obligations entered into by or on
behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information may come into the
public domain.
12.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD, and state
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<PAGE>
insurance regulators) and shall permit such authorities reasonable access to its
books and records in connection with any investigation or inquiry relating to
this Agreement or the transactions contemplated hereby. Notwithstanding the
generality of the foregoing, each party hereto further agrees to furnish the
Massachusetts Insurance Commissioner with any information or reports in
connection with services provided under this Agreement which such Commissioner
may request in order to ascertain whether the variable annuity operations of the
Company are being conducted in a manner consistent with Massachusetts variable
annuity laws and regulations and any other applicable law or regulations.
12.7 The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies, and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
12.8 This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto.
12.9 The Company shall furnish or cause to be furnished, to the Fund or
its designee copies of the following reports:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under
generally accepted accounting principles ("GAAP"), if any), as
soon as practical and in any event within 90 days after the
end of each fiscal year.
(b) the Company's quarterly statements (statutory) (and GAAP, if
any), as soon as practical and in any event within 45 days
after the end of each quarterly period.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
COMPANY: MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
COMPANY
By its authorized officer
By:
Title:
Date:
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<PAGE>
FUND: T. ROWE PRICE EQUITY SERIES, INC.
By its authorized officer
By:
Title: Vice President
------------------
Date:
UNDERWRITER: T. ROWE PRICE INVESTMENT SERVICES, INC.
By its authorized officer
By:
Title: Vice President
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Date:
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Exhibit 1(A)(8)(C)
PARTICIPATION AGREEMENT
AMONG
MFS VARIABLE INSURANCE TRUST,
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
AND
MASSACHUSETTS FINANCIAL SERVICES COMPANY
THIS AGREEMENT, made and entered into this ____ day of ____ 1998, by
and among MFS VARIABLE INSURANCE TRUST, a Massachusetts business trust (the
"Trust"), MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, a Massachusetts
corporation (the "Company") on its own behalf and on behalf of each of the
segregated asset accounts of the Company set forth in Schedule A hereto, as may
be amended from time to time (the "Accounts"), and MASSACHUSETTS FINANCIAL
SERVICES COMPANY, a Delaware corporation ("MFS").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and its shares are registered or will be registered under the Securities Act of
1933, as amended (the "1933 Act");
WHEREAS, shares of beneficial interest of the Trust are divided into
several series of shares, each representing the interests in a particular
managed pool of securities and other assets;
WHEREAS, the series of shares of the Trust offered by the Trust to the
Company and the Accounts are set forth on Schedule A attached hereto (each, a
"Portfolio," and, collectively, the "Portfolios");
WHEREAS, MFS is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
law, and is the Trust's investment adviser;
WHEREAS, the Company will issue certain variable annuity and/or
variable life insurance contracts (individually, the "Policy" or, collectively,
the "Policies") which, if required by applicable law, will be registered under
the 1933 Act;
WHEREAS, the Accounts are duly organized, validly existing segregated
asset accounts, established by resolution of the Board of Directors of the
Company, to set aside and invest assets attributable to the aforesaid variable
annuity and/or variable life insurance contracts that are allocated to the
Accounts (the Policies and the Accounts covered by this Agreement, and each
corresponding Portfolio covered by this Agreement in which the Accounts invest,
is specified in Schedule A attached hereto as may be modified from time to
time);
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WHEREAS, the Company has registered or will register the Accounts as
unit investment trusts under the 1940 Act (unless exempt therefrom);
WHEREAS, MFS Fund Distributors, Inc. (the "Underwriter") is registered
as a broker-dealer with the Securities and Exchange Commission (the "SEC") under
the Securities Exchange Act of 1934, as amended (hereinafter the "1934 Act"),
and is a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD");
WHEREAS, MML Distributors, LLC, the principal underwriter for the
individual variable annuity and the variable life policies, and MML Investors
Services, Inc., the co-underwriter of the policies, are both registered as
broker-dealers with the SEC under the 1934 Act and are members in good standing
of the NASD; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in one or more of the
Portfolios specified in Schedule A attached hereto (the "Shares") on behalf of
the Accounts to fund the Policies, and the Trust intends to sell such Shares to
the Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Trust,
MFS, and the Company agree as follows:
ARTICLE I. SALE OF TRUST SHARES
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1.1. The Trust agrees to sell to the Company those Shares which the
Accounts order (based on orders placed by Policy holders on that
Business Day, as defined below) and which are available for purchase by
such Accounts, executing such orders on a daily basis at the net asset
value next computed after receipt by the Trust or its designee of the
order for the Shares. For purposes of this Section 1.1, the Company
shall be the designee of the Trust for receipt of such orders from
Policy owners and receipt by such designee shall constitute receipt by
the Trust; provided that the Trust receives notice of such orders by
9:30 a.m. New York time on the next following Business Day. "Business
Day" shall mean any day on which the New York Stock Exchange, Inc. (the
"NYSE") is open for trading and on which the Trust calculates its net
asset value pursuant to the rules of the SEC.
1.2. The Trust agrees to make the Shares available indefinitely for
purchase at the applicable net asset value per share by the Company and
the Accounts on those days on which the Trust calculates its net asset
value pursuant to rules of the SEC and the Trust shall calculate such
net asset value on each day which the NYSE is open for trading.
Notwithstanding the foregoing, the Board of Trustees of the Trust (the
"Board") may refuse to sell any Shares to the Company and the Accounts,
or suspend or terminate the offering of the Shares if such action is
required by law or by regulatory authorities having jurisdiction or is,
in the sole discretion of the Board acting in good faith and in light
of its fiduciary duties under federal and any applicable state laws,
necessary in the best interest of the Shareholders of such Portfolio.
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1.3. The Trust and MFS agree that the Shares will be sold only to
insurance companies which have entered into participation agreements
with the Trust and MFS (the "Participating Insurance Companies") and
their separate accounts, qualified pension and retirement plans and MFS
or its affiliates. The Trust and MFS will not sell Trust shares to any
insurance company or separate account unless an agreement containing
provisions substantially the same as Articles III and VII of this
Agreement is in effect to govern such sales. The Company will not
resell the Shares except to the Trust or its agents.
1.4. The Trust agrees to redeem for cash, on the Company's request, any
full or fractional Shares held by the Accounts (based on orders placed
by Policy owners on that Business Day), executing such requests on a
daily basis at the net asset value next computed after receipt by the
Trust or its designee of the request for redemption. For purposes of
this Section 1.4, the Company shall be the designee of the Trust for
receipt of requests for redemption from Policy owners and receipt by
such designee shall constitute receipt by the Trust; provided that the
Trust receives notice of such request for redemption by 9:30 a.m. New
York time on the next following Business Day.
1.5. Each purchase, redemption and exchange order placed by the Company
shall be placed separately for each Portfolio and shall not be netted
with respect to any Portfolio. However, with respect to payment of the
purchase price by the Company and of redemption proceeds by the Trust,
the Company and the Trust shall net purchase and redemption orders with
respect to each Portfolio and shall transmit one net payment for all of
the Portfolios in accordance with Section 1.6 hereof.
1.6. In the event of net purchases, the Company shall pay for the
Shares by 2:00 p.m. New York time on the next Business Day after an
order to purchase the Shares is made in accordance with the provisions
of Section 1.1. hereof. In the event of net redemptions, the Trust
shall pay the redemption proceeds by 2:00 p.m. New York time on the
next Business Day after an order to redeem the shares is made in
accordance with the provisions of Section 1.4. hereof. All such
payments shall be in federal funds transmitted by wire.
1.7. Issuance and transfer of the Shares will be by book entry only.
Stock certificates will not be issued to the Company or the Accounts.
The Shares ordered from the Trust will be recorded in an appropriate
title for the Accounts or the appropriate subaccounts of the Accounts.
1.8. The Trust shall furnish same day notice (by electronic
transmission and/or facsimile by 6:30p.m. New York time) to the Company
of any dividends or capital gain distributions payable on the Shares.
The Company hereby elects to receive all such dividends and
distributions as are payable on a Portfolio's Shares in additional
Shares of that Portfolio. The Trust shall notify the Company of the
number of Shares so issued as payment of such dividends and
distributions.
1.9. The Trust or its custodian shall make the net asset value per
share for each Portfolio available to the Company on each Business Day
as soon as reasonably practical after the net asset value per share is
calculated and shall use its best efforts to make such net asset value
per share available by 6:30 p.m. New York time via electronic
transmission and/or facsimile. In
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the event that the Trust is unable to meet the 6:30 p.m. time
stated herein, it shall provide additional time for the Company
to place orders for the purchase and redemption of Shares. Such
additional time shall be equal to the additional time which the
Trust takes to make the net asset value available to the Company.
If the Trust provides materially incorrect share net asset value
information, the Trust shall make an adjustment to the number of
shares purchased or redeemed for the Accounts to reflect the
correct net asset value per share. Any material error in the
calculation or reporting of net asset value per share, dividend
or capital gains information shall be reported promptly upon
discovery to the Company via telephone followed by written
documentation of the error.
ARTICLE II. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
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2.1. The Company represents and warrants that the Policies are or will
be registered under the 1933 Act or are exempt from or not subject to
registration thereunder, and that the Policies will be issued, sold,
and distributed in compliance in all material respects with all
applicable state and federal laws, including without limitation the
1933 Act, the Securities Exchange Act of 1934, as amended (the "1934
Act"), and the 1940 Act. The Company further represents and warrants
that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established
the Account as a segregated asset account under applicable law and has
registered or, prior to any issuance or sale of the Policies, will
register the Accounts as unit investment trusts in accordance with the
provisions of the 1940 Act (unless exempt therefrom) to serve as
segregated investment accounts for the Policies, and that it will
maintain such registration for so long as any Policies are outstanding.
The Company shall amend the registration statements under the 1933 Act
for the Policies and the registration statements under the 1940 Act for
the Accounts from time to time as required in order to effect the
continuous offering of the Policies or as may otherwise be required by
applicable law. The Company shall register and qualify the Policies for
sales in accordance with the securities laws of the various states only
if and to the extent deemed necessary by the Company.
2.2. The Company represents and warrants that the Policies are
currently and at the time of issuance will be treated as life
insurance, endowment or annuity contract under applicable provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), that it
will maintain such treatment and that it will notify the Trust or MFS
immediately upon having a reasonable basis for believing that the
Policies have ceased to be so treated or that they might not be so
treated in the future.
2.3. The Company represents and warrants that MML Distributors, LLC and
MML Investors Services, Inc., the underwriters for the individual
variable annuity and the variable life policies, are members in good
standing of the NASD and are registered broker-dealers with the SEC.
The Company represents and warrants that the Company, MML Distributors,
LLC and MML Investors Services, Inc. will sell and distribute such
policies in accordance in all material respects with all applicable
state and federal securities laws, including without limitation the
1933 Act, the 1934 Act, and the 1940 Act.
2.4. The Trust and MFS represent and warrant that the Shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in
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compliance with the laws of The Commonwealth of Massachusetts and
all applicable federal and state securities laws and that the
Trust is and shall remain registered under the 1940 Act. The
Trust shall amend the registration statement for its Shares under
the 1933 Act and the 1940 Act from time to time as required in
order to effect the continuous offering of its Shares. The Trust
shall register and qualify the Shares for sale in accordance with
the laws of the various states only if and to the extent deemed
necessary by the Trust.
2.5. MFS represents and warrants that the Underwriter is a member in
good standing of the NASD and is registered as a broker-dealer with the
SEC. The Trust and MFS represent that the Trust and the Underwriter
will sell and distribute the Shares in accordance in all material
respects with all applicable state and federal securities laws,
including without limitation the 1933 Act, the 1934 Act, and the 1940
Act.
2.6. The Trust represents that it is lawfully organized and validly
existing under the laws of The Commonwealth of Massachusetts and that
it does and will comply in all material respects with the 1940 Act and
any applicable regulations thereunder.
2.7. MFS represents and warrants that it is and shall remain duly
registered under all applicable federal securities laws and that it
shall perform its obligations for the Trust in compliance in all
material respects with any applicable federal securities laws and with
the securities laws of The Commonwealth of Massachusetts. MFS
represents and warrants that it is not subject to state securities laws
other than the securities laws of The Commonwealth of Massachusetts and
that it is exempt from registration as an investment adviser under the
securities laws of The Commonwealth of Massachusetts.
2.8. No less frequently than annually, the Company shall submit to the
Board such reports, material or data as the Board may reasonably
request so that it may carry out fully the obligations imposed upon it
by the conditions contained in the exemptive application pursuant to
which the SEC has granted exemptive relief to permit mixed and shared
funding (the "Mixed and Shared Funding Exemptive Order").
ARTICLE III. PROSPECTUS AND PROXY STATEMENTS; VOTING
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3.1. At least annually, the Trust or its designee shall provide the
Company, free of charge, with as many copies of the current prospectus
(describing only the Portfolios listed in Schedule A hereto) for the
Shares as the Company may reasonably request for distribution to
existing Policy owners whose Policies are funded by such Shares. The
Trust or its designee shall provide the Company, at the Company's
expense, with as many copies of the current prospectus for the Shares
as the Company may reasonably request for distribution to prospective
purchasers of Policies. If requested by the Company in lieu thereof,
the Trust or its designee shall provide such documentation (including a
"camera ready" copy of the new prospectus as set in type or, at the
request of the Company, as a diskette in the form sent to the financial
printer) and other assistance as is reasonably necessary in order for
the parties hereto once each year (or more frequently if the prospectus
for the Shares is supplemented or amended) to have the prospectus for
the Policies and the prospectus for the Shares printed together in one
document; the expenses of such printing to be apportioned between (a)
the
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Company and (b) the Trust or its designee in proportion to the number
of pages of the Policy and Shares' prospectuses, taking account of
other relevant factors affecting the expense of printing, such as
covers, columns, graphs and charts; the Trust or its designee to bear
the cost of printing the Shares' prospectus portion of such document
for distribution to owners of existing Policies funded by the Shares
and the Company to bear the expenses of printing the portion of such
document relating to the Accounts; provided, however, that the Company
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shall bear all printing expenses of such combined documents where used
for distribution to prospective purchasers or to owners of existing
Policies not funded by the Shares. In the event that the Company
requests that the Trust or its designee provides the Trust's prospectus
in a "camera ready" or diskette format, the Trust shall be responsible
for providing the prospectus in the format in which it or MFS is
accustomed to formatting prospectuses and shall bear the expense of
providing the prospectus in such format (e.g., typesetting expenses),
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and the Company shall bear the expense of adjusting or changing the
format to conform with any of its prospectuses.
3.2. The prospectus for the Shares shall state that the statement of
additional information for the Shares is available from the Trust or
its designee. The Trust or its designee, at its expense, shall print
and provide such statement of additional information to the Company (or
a master of such statement suitable for duplication by the Company) for
distribution to any owner of a Policy funded by the Shares. The Trust
or its designee, at the Company's expense, shall print and provide such
statement to the Company (or a master of such statement suitable for
duplication by the Company) for distribution to a prospective purchaser
who requests such statement or to an owner of a Policy not funded by
the Shares.
3.3. The Trust or its designee shall provide the Company free of charge
copies, if and to the extent applicable to the Shares, of the Trust's
proxy materials, reports to Shareholders and other communications to
Shareholders in such quantity as the Company shall reasonably require
for distribution to Policy owners. In lieu thereof, the Trust or its
designee shall provide such documentation to the Company, at the
Company's option, in camera ready format or pdf files and other
assistance as is reasonably necessary in order for the Company to print
such shareholder communications for distribution to Policy Owners, at
the expense of the Trust.
The Trust shall use its best efforts to notify the Company within a
reasonable time of any proxy proposals for shareholders.
All expenses associated with proxy solicitations shall be borne by the
Trust as appropriate, including, but not limited to, printing,
distribution and cost of tabulating the proxies.
3.4. Notwithstanding the provisions of Sections 3.1, 3.2, and 3.3
above, or of Article V below, the Company shall pay the expense of
printing or providing documents to the extent such cost is considered a
distribution expense. Distribution expenses would include by way of
illustration, but are not limited to, the printing of the Shares'
prospectus or prospectuses for distribution to prospective purchasers
or to owners of existing Policies not funded by such Shares.
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3.5. The Trust hereby notifies the Company that it may be appropriate
to include in the prospectus pursuant to which a Policy is offered
disclosure regarding the potential risks of mixed and shared funding.
3.6. If and to the extent required by law, the Company shall:
(a) solicit voting instructions from Policy owners;
(b) vote the Shares in accordance with instructions received
from Policy owners; and
(c) vote the Shares for which no instructions have been received
in the same proportion as the Shares of such Portfolio for
which instructions have been received from Policy owners;
so long as and to the extent that the SEC continues to interpret the
1940 Act to require pass through voting privileges for variable
contract owners. The Company will in no way recommend action in
connection with or oppose or interfere with the solicitation of proxies
for the Shares held for such Policy owners. The Company reserves the
right to vote shares held in any segregated asset account in its own
right, to the extent permitted by law. Participating Insurance
Companies shall be responsible for assuring that each of their separate
accounts holding Shares calculates voting privileges in the manner
required by the Mixed and Shared Funding Exemptive Order. The Trust and
MFS will notify the Company of any changes of interpretations or
amendments to the Mixed and Shared Funding Exemptive Order.
ARTICLE IV. SALES MATERIAL AND INFORMATION
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4.1. The Company shall furnish, or shall cause to be furnished, to the
Trust or its designee, each piece of sales literature or other
promotional material in which the Trust, MFS, any other investment
adviser to the Trust, or any affiliate of MFS are named, at least three
(3) Business Days prior to its use. No such material shall be used if
the Trust, MFS, or their respective designees reasonably objects to
such use within three (3) Business Days after receipt of such material.
These review procedures shall not apply to any sales literature or
other promotional material produced by the Company if all references in
such literature regarding the Trust, MFS, any other investment adviser
to the Trust or any affiliate of MFS are identical to those that appear
in the Trust's prospectus or Statement of Additional Information.
4.2. The Company shall not give any information or make any
representations or statement on behalf of the Trust, MFS, any other
investment adviser to the Trust, or any affiliate of MFS or concerning
the Trust or any other such entity in connection with the sale of the
Policies other than the information or representations contained in the
registration statement, prospectus or statement of additional
information for the Shares, as such registration statement, prospectus
and statement of additional information may be amended or supplemented
from time to time, or in reports or proxy statements for the Trust, or
in sales literature or other promotional material approved by the
Trust, MFS or their respective designees, except with the permission of
the Trust, MFS or their respective designees. The Trust, MFS or their
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respective designees each agrees to respond to any request for approval
on a prompt and timely basis. The Company shall adopt and implement
procedures reasonably designed to ensure that information concerning
the Trust, MFS or any of their affiliates which is intended for use
only by brokers or agents selling the Policies (i.e., information that
is not intended for distribution to Policy owners or prospective Policy
owners) is so used, and neither the Trust, MFS nor any of their
affiliates shall be liable for any losses, damages or expenses relating
to the improper use of such broker only materials.
4.3. The Trust or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company and/or
the Accounts is named, at least three (3) Business Days prior to its
use. No such material shall be used if the Company or its designee
reasonably objects to such use within three (3) Business Days after
receipt of such material.
4.4. The Trust and MFS shall not give, and agree that the Underwriter
shall not give, any information or make any representations on behalf
of the Company or concerning the Company, the Accounts, or the Policies
in connection with the sale of the Policies other than the information
or representations contained in a registration statement, prospectus,
or statement of additional information for the Policies, as such
registration statement, prospectus and statement of additional
information may be amended or supplemented from time to time, or in
reports for the Accounts, or in sales literature or other promotional
material approved by the Company or its designee, except with the
permission of the Company. The Company or its designee agrees to
respond to any request for approval on a prompt and timely basis. The
parties hereto agree that this Section 4.4. is neither intended to
designate nor otherwise imply that MFS is an underwriter or distributor
of the Policies.
4.5. The Company and the Trust (or its designee in lieu of the Company
or the Trust, as appropriate) will each provide to the other at least
one complete copy of all registration statements, prospectuses,
statements of additional information, reports, proxy statements, sales
literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any
of the above, that relate to the Policies, or to the Trust or its
Shares, prior to or contemporaneously with the filing of such document
with the SEC or other regulatory authorities. The Company and the Trust
shall also each promptly inform the other of the results of any
examination by the SEC (or other regulatory authorities) that relates
to the Policies, the Trust or its Shares, and the party that was the
subject of the examination shall provide the other party with a copy of
relevant portions of any "deficiency letter" or other correspondence or
written report regarding any such examination.
4.6. The Trust and MFS will provide the Company with as much notice as
is reasonably practicable of any proxy solicitation for any Portfolio,
and of any material change in the Trust's registration statement,
particularly any change resulting in change to the registration
statement or prospectus or statement of additional information for any
Account. The Trust and MFS will cooperate with the Company so as to
enable the Company to solicit proxies from Policy owners or to make
changes to its prospectus, statement of additional information or
registration statement, in an orderly manner. The Trust and MFS will
make reasonable efforts to attempt to have changes affecting Policy
prospectuses become effective simultaneously with the annual updates
for such prospectuses.
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4.7. For purpose of this Article IV and Article VIII, the phrase "sales
literature or other promotional material" includes but is not limited
to advertisements (such as material published, or designed for use in,
a newspaper, magazine, or other periodical, radio, television,
telephone or tape recording, videotape display, signs or billboards,
motion pictures, or other public media), and sales literature (such as
brochures, circulars, reprints or excerpts or any other advertisement,
sales literature, or published articles), distributed or made generally
available to customers or the public, educational or training materials
or communications distributed or made generally available to some or
all agents or employees.
ARTICLE V. FEES AND EXPENSES
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5.1. The Trust shall pay no fee or other compensation to the Company
under this Agreement, and the Company shall pay no fee or other
compensation to the Trust, except that if the Trust or any Portfolio
adopts and implements a plan pursuant to Rule 12b-1 under the 1940 Act
to finance distribution and Shareholder servicing expenses, then,
subject to obtaining any required exemptive orders or regulatory
approvals, the Trust may make payments to the Company or to the
underwriter for the Policies if and in amounts agreed to by the Trust
in writing. Each party, however, shall, in accordance with the
allocation of expenses specified in Articles III and V hereof,
reimburse other parties for expenses initially paid by one party but
allocated to another party. In addition, nothing herein shall prevent
the parties hereto from otherwise agreeing to perform, and arranging
for appropriate compensation for, other services relating to the Trust
and/or to the Accounts.
5.2. The Trust or its designee shall bear the expenses for the cost of
registration and qualification of the Shares under all applicable
federal and state laws, including preparation and filing of the Trust's
registration statement, and payment of filing fees and registration
fees; preparation and filing of the Trust's proxy materials and reports
to Shareholders; setting in type and printing its prospectus and
statement of additional information (to the extent provided by and as
determined in accordance with Article III above); setting in type and
printing the proxy materials and reports to Shareholders (to the extent
provided by and as determined in accordance with Article III above);
the preparation of all statements and notices required of the Trust by
any federal or state law with respect to its Shares; all taxes on the
issuance or transfer of the Shares; and the costs of distributing the
Trust's prospectuses and proxy materials to owners of Policies funded
by the Shares and any expenses permitted to be paid or assumed by the
Trust pursuant to a plan, if any, under Rule 12b-1 under the 1940 Act.
The Trust shall not bear any expenses of marketing the Policies.
5.3. The Company shall bear the expenses of distributing the Shares'
prospectus or prospectuses in connection with new sales of the Policies
and of distributing the Trust's Shareholder reports to Policy owners.
The Company shall bear all expenses associated with the registration,
qualification, and filing of the Policies under applicable federal
securities and state insurance laws; the cost of preparing, printing
and distributing the Policy prospectus and statement of additional
information; and the cost of preparing, printing and distributing
annual individual account statements for Policy owners as required by
state insurance laws.
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5.4 MFS will quarterly reimburse the Company certain of the
administrative costs and expenses incurred by the Company as a result
of operations necessitated by the beneficial ownership by Policy owners
of shares of the Portfolios of the Trust, equal to 0.20% per annum of
the net assets of the Trust attributable to variable life or variable
annuity contracts offered by the Company. In no event shall such fee be
paid by the Trust, its shareholders or by the Policy holders.
ARTICLE VI. DIVERSIFICATION AND RELATED LIMITATIONS
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6.1. The Trust and MFS represent and warrant that each Portfolio of the
Trust will meet the diversification requirements of Section 817 (h) (1)
of the Code and Treas. Reg. 1.817-5, relating to the diversification
requirements for variable annuity, endowment, or life insurance
contracts, as they may be amended from time to time (and any revenue
rulings, revenue procedures, notices, and other published announcements
of the Internal Revenue Service interpreting these sections), as if
those requirements applied directly to each such Portfolio.
6.2. The Trust and MFS represent that each Portfolio will elect to be
qualified as a Regulated Investment Company under Subchapter M of the
Code and that they will maintain such qualification (under Subchapter M
or any successor or similar provision).
ARTICLE VII. POTENTIAL MATERIAL CONFLICTS
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7.1. The Trust agrees that the Board, constituted with a majority of
disinterested trustees, will monitor each Portfolio of the Trust for
the existence of any material irreconcilable conflict between the
interests of the variable annuity contract owners and the variable life
insurance policy owners of the Company and/or affiliated companies
("contract owners") investing in the Trust. The Board shall have the
sole authority to determine if a material irreconcilable conflict
exists, and such determination shall be binding on the Company only if
approved in the form of a resolution by a majority of the Board, or a
majority of the disinterested trustees of the Board. The Board will
give prompt notice of any such determination to the Company.
7.2. The Company agrees that it will be responsible for assisting the
Board in carrying out its responsibilities under the conditions set
forth in the Trust's exemptive application pursuant to which the SEC
has granted the Mixed and Shared Funding Exemptive Order by providing
the Board, as it may reasonably request, with all information necessary
for the Board to consider any issues raised and agrees that it will be
responsible for promptly reporting any potential or existing conflicts
of which it is aware to the Board including, but not limited to, an
obligation by the Company to inform the Board whenever contract owner
voting instructions are disregarded. The Company also agrees that, if a
material irreconcilable conflict arises, it will at its own cost remedy
such conflict up to and including (a) withdrawing the assets allocable
to some or all of the Accounts from the Trust or any Portfolio and
reinvesting such assets in a different investment medium, including
(but not limited to) another Portfolio of the Trust, or submitting to a
vote of all affected contract owners whether to withdraw assets from
the Trust or any Portfolio and reinvesting such assets in a different
investment medium and, as appropriate, segregating the assets
attributable to any appropriate group of contract owners that
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votes in favor of such segregation, or offering to any of the
affected contract owners the option of segregating the assets
attributable to their contracts or policies, and (b) establishing
a new registered management investment company and segregating
the assets underlying the Policies, unless a majority of Policy
owners materially adversely affected by the conflict have voted
to decline the offer to establish a new registered management
investment company.
7.3. A majority of the disinterested trustees of the Board shall
determine whether any proposed action by the Company adequately
remedies any material irreconcilable conflict. In the event that the
Board determines that any proposed action does not adequately remedy
any material irreconcilable conflict, the Company will withdraw from
investment in the Trust each of the Accounts designated by the
disinterested trustees and terminate this Agreement within six (6)
months after the Board informs the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination
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shall be limited to the extent required to remedy any such material
irreconcilable conflict as determined by a majority of the
disinterested trustees of the Board.
7.4. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision
of the 1940 Act or the rules promulgated thereunder with respect to
mixed or shared funding (as defined in the Mixed and Shared Funding
Exemptive Order) on terms and conditions materially different from
those contained in the Mixed and Shared Funding Exemptive Order, then
(a) the Trust and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with
Rule 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable; and (b) Sections 3.5, 3.6, 7.1, 7.2,
7.3 and 7.4 of this Agreement shall continue in effect only to the
extent that terms and conditions substantially identical to such
Sections are contained in such Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
---------------
8.1. Indemnification by the Company
------------------------------
The Company agrees to indemnify and hold harmless the Trust,
MFS, any affiliates of MFS, and each of their respective
directors/trustees, officers and each person, if any, who controls the
Trust or MFS within the meaning of Section 15 of the 1933 Act, and any
agents or employees of the foregoing (each an "Indemnified Party," or
collectively, the "Indemnified Parties" for purposes of this Section
8.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Company) or expenses (including reasonable counsel fees) to which any
Indemnified Party may become subject under any statute, regulation, at
common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Shares or the Policies
and:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained
in the registration statement, prospectus or statement
of additional information for the Policies or contained
in the Policies or sales literature or other
promotional material for the Policies (or any
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amendment or supplement to any of the foregoing), or arise
out of or are based upon the omission or the alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reasonable reliance upon and in conformity with
information furnished to the Company or its designee by or
on behalf of the Trust or MFS for use in the registration
statement, prospectus or statement of additional information
for the Policies or in the Policies or sales literature or
other promotional material (or any amendment or supplement)
or otherwise for use in connection with the sale of the
Policies or Shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, statement of additional
information or sales literature or other promotional
material of the Trust not supplied by the Company or its
designee, or persons under its control and on which the
Company has reasonably relied) or wrongful conduct of the
Company or persons under its control, with respect to the
sale or distribution of the Policies or Shares; or
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the registration
statement, prospectus, statement of additional information,
or sales literature or other promotional literature of the
Trust, or any amendment thereof or supplement thereto, or
the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statement or statements therein not misleading, if such
statement or omission was made in reliance upon information
furnished to the Trust by or on behalf of the Company; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company; or
(e) arise as a result of any failure by the Company to provide
the services and furnish the materials under the terms of
this Agreement;
as limited by and in accordance with the provisions of this Article
VIII.
8.2. Indemnification by the Trust
----------------------------
The Trust agrees to indemnify and hold harmless the Company
and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act,
and any agents or employees of the foregoing (each an "Indemnified
Party," or collectively, the "Indemnified Parties" for purposes of this
Section 8.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Trust) or expenses (including reasonable counsel fees) to which
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any Indemnified Party may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of the Shares or the Policies and:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement, prospectus, statement of
additional information or sales literature or other
promotional material of the Trust (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statement therein not misleading,
provided that this agreement to indemnify shall not apply as
to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reasonable
reliance upon and in conformity with information furnished
to the Trust, MFS, the Underwriter or their respective
designees by or on behalf of the Company for use in the
registration statement, prospectus or statement of
additional information for the Trust or in sales literature
or other promotional material for the Trust (or any
amendment or supplement) or otherwise for use in connection
with the sale of the Policies or Shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, statement of additional
information or sales literature or other promotional
material for the Policies not supplied by the Trust, MFS,
the Underwriter or any of their respective designees or
persons under their respective control and on which any such
entity has reasonably relied) or wrongful conduct of the
Trust or persons under its control, with respect to the sale
or distribution of the Policies or Shares; or
(c) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the registration
statement, prospectus, statement of additional information,
or sales literature or other promotional literature of the
Accounts or relating to the Policies, or any amendment
thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statement or
statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to
the Company by or on behalf of the Trust, MFS or the
Underwriter; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this
Agreement (including a failure, whether unintentional or in
good faith or otherwise, to comply with the diversification
requirements specified in Article VI of this Agreement) or
arise out of or result from any other material breach of
this Agreement by the Trust; or
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(e) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset
value per share or dividend or capital gain distribution
rate; or
(f) arise as a result of any failure by the Trust to provide the
services and furnish the materials under the terms of the
Agreement;
as limited by and in accordance with the provisions of this Article
VIII.
8.3. In no event shall the Trust be liable under the indemnification
provisions contained in this Agreement to any individual or entity,
including without limitation, the Company, or any Participating
Insurance Company or any Policy holder, with respect to any losses,
claims, damages, liabilities or expenses that arise out of or result
from (i) a breach of any representation, warranty, and/or covenant made
by the Company hereunder or by any Participating Insurance Company
under an agreement containing substantially similar representations,
warranties and covenants; (ii) the failure by the Company or any
Participating Insurance Company to maintain its segregated asset
account (which invests in any Portfolio) as a legally and validly
established segregated asset account under applicable state law and as
a duly registered unit investment trust under the provisions of the
1940 Act (unless exempt therefrom); or (iii) the failure by the Company
or any Participating Insurance Company to maintain its variable annuity
and/or variable life insurance contracts (with respect to which any
Portfolio serves as an underlying funding vehicle) as life insurance,
endowment or annuity contracts under applicable provisions of the Code.
8.4. Neither the Company nor the Trust shall be liable under the
indemnification provisions contained in this Agreement with respect to
any losses, claims, damages, liabilities or expenses to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, willful misconduct, or gross
negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations
and duties under this Agreement.
8.5. Promptly after receipt by an Indemnified Party under this Section
8.5. of notice of commencement of any action, such Indemnified Party
will, if a claim in respect thereof is to be made against the
indemnifying party under this section, notify the indemnifying party of
the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any Indemnified Party otherwise than under this section. In
case any such action is brought against any Indemnified Party, and it
notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, assume the defense thereof, with counsel
satisfactory to such Indemnified Party. After notice from the
indemnifying party of its intention to assume the defense of an action,
the Indemnified Party shall bear the expenses of any additional counsel
obtained by it, and the indemnifying party shall not be liable to such
Indemnified Party under this section for any legal or other expenses
subsequently incurred by such Indemnified Party in connection with the
defense thereof other than reasonable costs of investigation.
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8.6. Each of the parties agrees promptly to notify the other parties of
the commencement of any litigation or proceeding against it or any of
its respective officers, directors, trustees, employees or 1933 Act
control persons in connection with the Agreement, the issuance or sale
of the Policies, the operation of the Accounts, or the sale or
acquisition of Shares.
8.7. A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this
Article VIII. The indemnification provisions contained in this Article
VIII shall survive any termination of this Agreement.
ARTICLE IX. APPLICABLE LAW
--------------
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.
9.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant and the terms hereof shall be
interpreted and construed in accordance therewith.
ARTICLE X. NOTICE OF FORMAL PROCEEDINGS
----------------------------
The Trust, MFS, and the Company agree that each such party shall promptly
notify the other parties to this Agreement, in writing, of the institution of
any formal proceedings brought against such party or its designees by the NASD,
the SEC, or any insurance department or any other regulatory body regarding such
party's duties under this Agreement or related to the sale of the Policies, the
operation of the Accounts, or the purchase of the Shares.
ARTICLE XI. TERMINATION
-----------
11.1. This Agreement shall terminate with respect to the Accounts, or
one, some, or all Portfolios:
(a) at the option of any party upon six (6) months' advance
written notice to the other parties; or
(b) at the option of the Company to the extent that the Shares
of Portfolios are not reasonably available to meet the
requirements of the Policies or are not "appropriate funding
vehicles" for the Policies, as reasonably determined by the
Company. Without limiting the generality of the foregoing,
the Shares of a Portfolio would not be "appropriate funding
vehicles" if, for example, such Shares did not meet the
diversification or other requirements referred to in Article
VI hereof; or if the Company would be permitted to disregard
Policy owner voting instructions pursuant to Rule 6e-2 or
6e-3(T) under the 1940 Act. Prompt notice of the election to
terminate for such cause and an explanation of such cause
shall be furnished to the Trust by the Company; or
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(c) at the option of the Trust or MFS upon institution of formal
proceedings against the Company by the NASD, the SEC, or any
insurance department or any other regulatory body regarding
the Company's duties under this Agreement or related to the
sale of the Policies, the operation of the Accounts, or the
purchase of the Shares; or
(d) at the option of the Company upon institution of formal
proceedings against the Trust by the NASD, the SEC, or any
state securities or insurance department or any other
regulatory body regarding the Trust's or MFS' duties under
this Agreement or related to the sale of the Shares; or
(e) at the option of the Company, the Trust or MFS upon receipt
of any necessary regulatory approvals and/or the vote of the
Policy owners having an interest in the Accounts (or any
subaccounts) to substitute the shares of another investment
company for the corresponding Portfolio Shares in accordance
with the terms of the Policies for which those Portfolio
Shares had been selected to serve as the underlying
investment media. The Company will give thirty (30) days'
prior written notice to the Trust of the Date of any
proposed vote or other action taken to replace the Shares;
or
(f) termination by either the Trust or MFS by written notice to
the Company, if either one or both of the Trust or MFS
respectively, shall determine, in their sole judgment
exercised in good faith, that the Company has suffered a
material adverse change in its business, operations,
financial condition, or prospects since the date of this
Agreement or is the subject of material adverse publicity;
or
(g) termination by the Company by written notice to the Trust
and MFS, if the Company shall determine, in its sole
judgment exercised in good faith, that the Trust or MFS has
suffered a material adverse change in this business,
operations, financial condition or prospects since the date
of this Agreement or is the subject of material adverse
publicity; or
(h) at the option of any party to this Agreement, upon another
party's material breach of any provision of this Agreement;
or
(i) upon assignment of this Agreement, unless made with the
written consent of the parties hereto, except that all
parties shall be permitted to assign this Agreement or any
interest therein to their ultimate parent holding company
and any affiliate or subsidiary thereof, upon notice but
without obtaining the consent of the other parties. All
assignees shall be appropriately licensed and shall comply
with all applicable securities and insurance laws and
regulations.
11.2. The notice shall specify the Portfolio or Portfolios, Policies
and, if applicable, the Accounts as to which the Agreement is to be
terminated.
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11.3. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 11.1(a) may be exercised
for cause or for no cause.
11.4. Except as necessary to implement Policy owner initiated
transactions, or as required by state insurance laws or regulations,
the Company shall not redeem the Shares attributable to the Policies
(as opposed to the Shares attributable to the Company's assets held in
the Accounts), and the Company shall not prevent Policy owners from
allocating payments to a Portfolio that was otherwise available under
the Policies, until thirty (30) days after the Company shall have
notified the Trust of its intention to do so.
11.5. Notwithstanding any termination of this Agreement, the Trust and
MFS shall, at the option of the Company, continue to make available
additional shares of the Portfolios pursuant to the terms and
conditions of this Agreement, for all Policies in effect on the
effective date of termination of this Agreement (the "Existing
Policies"), except as otherwise provided under Article VII of this
Agreement. Specifically, without limitation, the owners of the Existing
Policies shall be permitted to transfer or reallocate investment under
the Policies, redeem investments in any Portfolio and/or invest in the
Trust upon the making of additional purchase payments under the
Existing Policies.
ARTICLE XII. NOTICES
-------
Any notice shall be sufficiently given when sent by registered or
certified mail, overnight courier or facsimile to the other party at the address
of such party set forth below or at such other address as such party may from
time to time specify in writing to the other party.
If to the Trust:
MFS Variable Insurance Trust
500 Boylston Street
Boston, Massachusetts 02116
Facsimile No.: (617) 954-6624
Attn: Stephen E. Cavan, Secretary
If to the Company:
Massachusetts Mutual Life Insurance Company
Office of the General Counsel
1295 State Street
Springfield, Massachusetts 01111-0001
Facsimile No.: (860---__)987-2992
Attn: General Counsel
If to MFS:
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
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Facsimile No.: (617) 954-6624
Attn: Stephen E. Cavan, General Counsel
ARTICLE XIII. MISCELLANEOUS
-------------
13.1. Subject to the requirement of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the owners of the Policies and all information reasonably
identified as confidential in writing by any other party hereto and,
except as permitted by this Agreement or as otherwise required by
applicable law or regulation, shall not disclose, disseminate or
utilize such names and addresses and other confidential information
without the express written consent of the affected party until such
time as it may come into the public domain.
13.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
13.3. This Agreement may be executed simultaneously in one or more
counterparts, each of which taken together shall constitute one and the
same instrument.
13.4. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
13.5. The Schedule attached hereto, as modified from time to time, is
incorporated herein by reference and is part of this Agreement.
13.6. Each party hereto shall cooperate with each other party in
connection with inquiries by appropriate governmental authorities
(including without limitation the SEC, the NASD, and state insurance
regulators) relating to this Agreement or the transactions contemplated
hereby.
13.7. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled
to under state and federal laws.
13.8. A copy of the Trust's Declaration of Trust is on file with the
Secretary of State of The Commonwealth of Massachusetts. The Company
acknowledges that the obligations of or arising out of this instrument
are not binding upon any of the Trust's trustees, officers, employees,
agents or shareholders individually, but are binding solely upon the
assets and property of the Trust in accordance with its proportionate
interest hereunder. The Company further acknowledges that the assets
and liabilities of each Portfolio are separate and distinct and that
the obligations of or arising out of this instrument are binding solely
upon the assets or property of the Portfolio on whose behalf the Trust
has executed this instrument. The Company also agrees that the
obligations of each Portfolio hereunder shall be several and not joint,
in accordance with its proportionate interest hereunder, and the
Company agrees not to proceed against any Portfolio for the obligations
of another Portfolio.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified above.
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
-------------------------------------------
By its authorized officer,
By:
----------------------------------
Title:
-------------------------------
MFS VARIABLE INSURANCE TRUST,
on behalf of the Portfolios
By its authorized officer and not individually,
By:
----------------------------------
James R. Bordewick, Jr.
Assistant Secretary
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By its authorized officer,
By:
----------------------------------
Jeffrey L. Shames
Chairman and Chief Executive Officer
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Exhibit 1(A)(8)(d)
FORM OF PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into this __ day of ________,
1998 by and between GOLDMAN SACHS VARIABLE INSURANCE TRUST, an unincorporated
business trust formed under the laws of Delaware (the "Trust"), GOLDMAN, SACHS &
CO., a New York limited partnership (the "Distributor"), and MASSACHUSETTS
MUTUAL LIFE INSURANCE COMPANY, a Massachusetts life insurance company (the
"Company"), on its own behalf and on behalf of each separate account of the
Company identified herein.
WHEREAS, the Trust is a series-type mutual fund offering shares
of beneficial interest (the "Trust shares") consisting of one or more separate
series ("Series") of shares, each such Series representing an interest in a
particular investment portfolio of securities and other assets (a "Fund"), and
which Series may be subdivided into various classes ("Classes") with each such
Class supporting a distinct charge and expense arrangement; and
WHEREAS, the Trust was established for the purpose of serving as
an investment vehicle for insurance company separate accounts supporting
variable annuity contracts and variable life insurance policies to be offered by
insurance companies and may also be utilized by qualified retirement plans; and
WHEREAS, the Distributor has the exclusive right to distribute
Trust shares to qualifying investors; and
WHEREAS, the Company desires that the Trust serve as an
investment vehicle for a certain separate account(s) of the Company and the
Distributor desires to sell shares of certain Series and/or Class(es) to such
separate account(s);
NOW, THEREFORE, in consideration of their mutual promises, the
Trust, the Distributor and the Company agree as follows:
ARTICLE I
Additional Definitions
1.1. "Account" -- the separate account of the Company described
more specifically in Schedule 1 to this Agreement. If more than one separate
account is described on Schedule 1, the term shall refer to each separate
account so described.
1.2. "Business Day" -- each day that the Trust is open for
business as provided in the Trust's Prospectus.
1.3. "Code" -- the Internal Revenue Code of 1986, as amended, and
any successor thereto.
1.4. "Contracts" -- the class or classes of variable annuity
contracts and/or variable life insurance policies issued by the Company and
described more specifically on Schedule 2 to this Agreement.
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1.5. "Contract Owners" -- the owners of the Contracts, as
distinguished from all Product Owners.
1.6. "Participating Account" -- a separate account investing all
or a portion of its assets in the Trust, including the Account.
1.7. "Participating Insurance Company" -- any insurance company
investing in the Trust on its behalf or on behalf of a Participating Account,
including the Company.
1.8. "Participating Plan" -- any qualified retirement plan
investing in the Trust.
1.9. "Participating Investor" -- any Participating Account,
Participating Insurance Company or Participating Plan, including the Account and
the Company.
1.10. "Products" -- variable annuity contracts and variable life
insurance policies supported by Participating Accounts, including the Contracts.
1.11. "Product Owners" -- owners of Products, including Contract
Owners.
1.12. "Trust Board" -- the board of trustees of the Trust.
1.13. "Registration Statement" -- with respect to the Trust
shares or a class of Contracts, the registration statement filed with the SEC to
register such securities under the 1933 Act, or the most recently filed
amendment thereto, in either case in the form in which it was declared or became
effective. The Contracts' Registration Statement for each class of Contracts is
described more specifically on Schedule 2 to this Agreement. The Trust's
Registration Statement is filed on Form N-1A (File No. 333-35883).
1.14. "1940 Act Registration Statement" -- with respect to the
Trust or the Account, the registration statement filed with the SEC to register
such person as an investment company under the 1940 Act, or the most recently
filed amendment thereto. The Account's 1940 Act Registration Statement is
described more specifically on Schedule 2 to this Agreement. The Trust's 1940
Act Registration Statement is filed on Form N-1A (File No. 811-08361).
1.15. "Prospectus" -- with respect to shares of a Series (or
Class) of the Trust or a class of Contracts, each version of the definitive
prospectus or supplement thereto filed with the SEC pursuant to Rule 497 under
the 1933 Act. With respect to any provision of this Agreement requiring a party
to take action in accordance with a Prospectus, such reference thereto shall be
deemed to be to the version for the applicable Series, Class or Contracts last
so filed prior to the taking of such action. For purposes of Article IX, the
term "Prospectus" shall include any statement of additional information
incorporated therein.
1.16. "Statement of Additional Information" -- with respect to
the shares of the Trust or a class of Contracts, each version of the definitive
statement of additional information or supplement thereto filed with the SEC
pursuant to Rule 497 under the 1933 Act. With respect to any provision of this
Agreement requiring a party to take action in accordance with a Statement of
Additional Information, such reference thereto shall be deemed to be the last
version so filed prior to the taking of such action.
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1.17. "SEC" -- the Securities and Exchange Commission.
1.18. "NASD" -- The National Association of Securities Dealers, Inc.
1.19. "1933 Act" -- the Securities Exchange Act of 1933, as amended.
1.20. "1940 Act" -- the Investment Company Act of 1940, as amended.
ARTICLE II
Sale of Trust Shares
2.1. Availability of Shares
(a) The Trust has granted to the Distributor exclusive
authority to distribute the Trust shares and to select which Series or
Classes of Trust shares shall be made available to Participating
Investors. Pursuant to such authority, and subject to Article X hereof,
the Distributor shall make available to the Company for purchase on
behalf of the Account, shares of the Series and Classes listed on
Schedule 3 to this Agreement, such purchases to be effected at net
asset value in accordance with Section 2.3 of this Agreement. Such
Series and Classes shall be made available to the Company in accordance
with the terms and provisions of this Agreement until this Agreement is
terminated pursuant to Article X or the Distributor suspends or
terminates the offering of shares of such Series or Classes in the
circumstances described in Article X.
(b) Notwithstanding clause (a) of this Section 2.1, Series or
Classes of Trust shares in existence now or that may be established in
the future will be made available to the Company only as the
Distributor may so provide, subject to the Distributor's rights set
forth in Article X to suspend or terminate the offering of shares of
any Series or Class or to terminate this Agreement.
(c) The parties acknowledge and agree that: (i) the Trust may
revoke the Distributor's authority pursuant to the terms and conditions
of its distribution agreement with the Distributor; and (ii) the Trust
reserves the right in its sole discretion to refuse to accept a request
for the purchase of Trust shares.
2.2. Redemptions. The Trust shall redeem, at the Company's request,
any full or fractional Trust shares held by the Company on behalf of the
Account, such redemptions to be effected at net asset value in accordance with
Section 2.3 of this Agreement. Notwithstanding the foregoing, (i) the Company
shall not redeem Trust shares attributable to Contract Owners except in the
circumstances permitted in Article X of this Agreement, and (ii) the Trust may
delay redemption of Trust shares of any Series or Class to the extent permitted
by the 1940 Act, any rules, regulations or orders thereunder, or the Prospectus
for such Series or Class.
2.3. Purchase and Redemption Procedures
(a) The Trust hereby appoints the Company as an agent of the
Trust for the limited purpose of receiving purchase and redemption
requests on behalf of the
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Account (but not with respect to any Trust shares that may be
held in the general account of the Company) for shares of those
Series or Classes made available hereunder, based on allocations
of amounts to the Account or subaccounts thereof under the
Contracts, other transactions relating to the Contracts or the
Account and customary processing of the Contracts. Receipt of any
such requests (or effectuation of such transaction or processing)
on any Business Day by the Company as such limited agent of the
Trust prior to the Trust's close of business as defined from time
to time in the applicable Prospectus for such Series or Class
(which as of the date of execution of this Agreement is defined
as the close of regular trading on the New York Stock Exchange
(normally 4:00 p.m. New York Time)) shall constitute receipt by
the Trust on that same Business Day, provided that (i) with
respect to the International Equity Fund, the Trust receives
actual and sufficient notice of such request by 9:00 a.m. New
York Time on the next following Business Day, and (ii) with
respect to all other Funds listed on Schedule 3, the Trust
receives actual and sufficient notice of such request by 10:00
am. New York time. Such notice may be communicated by telephone
to the office or person designated for such notice by the Trust,
and shall be confirmed by facsimile.
(b) The Company shall pay for shares of each Series or Class
on the same day that it provides actual notice to the Trust of a
purchase request for such shares. Payment for Series or Class shares
shall be made in Federal funds transmitted to the Trust by wire to be
received by the Trust by 3:30 p.m. New York Time on the day the Trust
receives actual notice of the purchase request for Series or Class
shares (unless the Trust determines and so advises the Company that
sufficient proceeds are available from redemption of shares of other
Series or Classes effected pursuant to redemption requests tendered by
the Company on behalf of the Account). In no event may proceeds from
the redemption of shares requested pursuant to an order received by the
Company after the Trust's close of business on any Business Day be
applied to the payment for shares for which a purchase order was
received prior to the Trust's close of business on such day. If the
issuance of shares is canceled because Federal funds are not timely
received, the Company shall indemnify the respective Fund and
Distributor with respect to all costs, expenses and losses relating
thereto. Upon the Trust's receipt of Federal funds so wired, such funds
shall cease to be the responsibility of the Company and shall become
the responsibility of the Trust. If Federal funds are not received on
time, such funds will be invested, and Series or Class shares purchased
thereby will be issued, as soon as practicable after actual receipt of
such funds but in any event not on the same day that the purchase order
was received.
(c) Payment for Series or Class shares redeemed by the Account
or the Company shall be made in Federal funds transmitted by wire to
the Company or any other person properly designated in writing by the
Company, such funds normally to be transmitted by 6:00 p.m. New York
Time on the next Business Day after the Trust receives actual notice of
the redemption order for Series or Class shares (unless redemption
proceeds are to be applied to the purchase of Trust shares of other
Series or Classes in accordance with Section 2.3(b) of this Agreement),
except that the Trust reserves the right to redeem Series or Class
shares in assets other than cash and to delay payment of redemption
proceeds to the extent permitted by the 1940 Act, any rules or
regulations or orders thereunder, or the applicable Prospectus. The
Trust shall not bear any responsibility whatsoever for the proper
disbursement or crediting of redemption proceeds by the Company; the
Company alone shall be responsible for such action.
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(d) Any purchase or redemption request for Series or Class
shares held or to be held in the Company's general account shall be
effected at the net asset value per share next determined after the
Trust's actual receipt of such request, provided that, in the case of a
purchase request, payment for Trust shares so requested is received by
the Trust in Federal funds prior to close of business for determination
of such value, as defined from time to time in the Prospectus for such
Series or Class.
(e) Prior to the first purchase of any Trust shares hereunder,
the Company and the Trust shall provide each other with all information
necessary to effect wire transmissions of Federal funds to the other
party and all other designated persons pursuant to such protocols and
security procedures as the parties may agree upon. Should such
information change thereafter, the Trust and the Company, as
applicable, shall notify the other in writing of such changes,
observing the same protocols and security procedures, at least three
Business Days in advance of when such change is to take effect. The
Company and the Trust shall observe customary procedures to protect the
confidentiality and security of such information, but the Trust shall
not be liable to the Company for any breach of security.
(f) The procedures set forth herein are subject to any
additional terms set forth in the applicable Prospectus for the Series
or Class or by the requirements of applicable law.
(g) The Trust will make available to the Company information
concerning pending purchase and redemption transactions on any Business
Day via the Internet or other means acceptable to both parties.
2.4. Net Asset Value. The Trust shall use its best efforts to inform
the Company of the net asset value per share for each Series or Class available
to the Company as soon as reasonably practicable after the net asset value per
share for such Series or Class is calculated, normally by 6:30 p.m. New York
Time. The Trust shall calculate such net asset value in accordance with the
Prospectus for such Series or Class.
2.5. Dividends and Distributions. The Trust shall furnish notice to the
Company as soon as reasonably practicable of any income dividends or capital
gain distributions payable on any Series or Class shares. The Company, on its
behalf and on behalf of the Account, hereby elects to receive all such dividends
and distributions as are payable on any Series or Class shares in the form of
additional shares of that Series or Class. The Company reserves the right, on
its behalf and on behalf of the Account, to revoke this election and to receive
all such dividends and capital gain distributions in cash; to be effective, such
revocation must be made in writing and received by the Trust at least ten
Business Days prior to a dividend or distribution date. The Trust shall notify
the Company promptly of the number of Series or Class shares so issued as
payment of such dividends and distributions.
2.6. Book Entry. Issuance and transfer of Trust shares shall be by book
entry only. Stock certificates will not be issued to the Company or the Account.
Purchase and redemption orders for Trust shares shall be recorded in an
appropriate ledger for the Account or the appropriate subaccount of the Account.
2.7. Pricing Errors. Any material errors in the calculation of net
asset value, dividends or capital gain information shall be reported immediately
upon discovery to the
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Company. An error shall be deemed "material" based on our interpretation of the
SEC's position and policy with regard to materiality, as it may be modified from
time to time. Neither the Trust, any Fund, the Distributor, nor any of their
affiliates shall be liable for any information provided to the Company pursuant
to this Agreement which information is based on incorrect information supplied
by or on behalf of the Company or any other Participating Company to the Trust
or the Distributor. Any reasonable administrative costs or losses incurred for
correcting the underlying Contract Owner accounts as a result of any incorrect
calculation of the net asset value, any incorrect report of net asset value, or
any untimely delay in the reporting of the net asset value shall be borne by the
Trust or the Distributor to the extent such errors are within the Trust's or the
Distributor's control; provided that the Company shall bear any reasonable
administrative costs or losses incurred by the Trust or the Distributor
associated with correcting any incorrect calculation of the net asset value, any
incorrect report of net asset value, or any untimely delay in the reporting of
the net asset value by the Trust which are the fault of the Company.
2.8. Limits on Purchasers. The Distributor and the Trust shall sell
Trust shares only to insurance companies and their separate accounts and to
persons or plans ("Qualified Persons") that qualify to purchase shares of the
Trust under Section 817(h) of the Code and the regulations thereunder without
impairing the ability of the Account to consider the portfolio investments of
the Trust as constituting investments of the Account for the purpose of
satisfying the diversification requirements of Section 817(h). The Distributor
and the Trust shall not sell Trust shares to any insurance company or separate
account unless an agreement complying with Article VIII of this Agreement is in
effect to govern such sales. The Company hereby represents and warrants that it
and the Account are Qualified Persons.
ARTICLE III
Representations and Warranties
3.1. Company. The Company represents and warrants that: (i) the Company
is an insurance company duly organized and in good standing under Massachusetts
insurance law; (ii) the Account is a validly existing separate account, duly
established and maintained in accordance with applicable law; (iii) the
Account's 1940 Act Registration Statement has been filed with the SEC in
accordance with the provisions of the 1940 Act and the Account is duly
registered as a unit investment trust thereunder; (iv) the Contracts'
Registration Statement has been declared effective by the SEC; (v) the Contracts
will be issued in compliance in all material respects with all applicable
Federal and state laws; (vi) the Contracts have been filed, qualified and/or
approved for sale, as applicable, under the insurance laws and regulations of
the states in which the Contracts will be offered; (vii) the Account will
maintain its registration under the 1940 Act and will comply in all material
respects with the 1940 Act; (viii) the Contracts currently are, and at the time
of issuance and for so long as they are outstanding will be, treated as annuity
contracts or life insurance policies, whichever is appropriate, under applicable
provisions of the Code; and (ix) the Company's entering into and performing its
obligations under this Agreement does not and will not violate its charter
documents or by-laws, rules or regulations, or any agreement to which it is a
party. The Company will notify the Trust promptly if for any reason it is unable
to perform its obligations under this Agreement.
3.2. Trust. The Trust represents and warrants that: (i) the Trust is an
unincorporated business trust duly formed and validly existing under the
Delaware law; (ii) the Trust's 1940 Act Registration Statement has been filed
with the SEC in accordance with the provisions of the 1940 Act and the Trust is
duly registered as an open-end management
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investment company thereunder; (iii) the Trust's Registration Statement has been
declared effective by the SEC; (iv) the Trust shares will be issued in
compliance in all material respects with all applicable federal laws; (v) the
Trust will remain registered under and will comply in all material respects with
the 1940 Act during the term of this Agreement; (vi) each Fund of the Trust
intends to qualify as a "regulated investment company" under Subchapter M of the
Code and to comply with the diversification standards prescribed in Section
817(h) of the Code and the regulations thereunder; and (vii) the investment
policies of each Fund are in material compliance with any investment
restrictions set forth on Schedule 4 to this Agreement. The Trust, however,
makes no representation as to whether any aspect of its operations (including,
but not limited to, fees and expenses and investment policies) otherwise
complies with the insurance laws or regulations of any state.
3.3. Distributor. The Distributor represents and warrants that: (i) the
Distributor is a limited partnership duly organized and in good standing under
New York law; (ii) the Distributor is registered as a broker-dealer under
federal and applicable state securities laws and is a member of the NASD; and
(iii) the Distributor is registered as an investment adviser under federal
securities laws.
3.4. Legal Authority. Each party represents and warrants that the
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by all necessary
corporate, partnership or trust action, as applicable, by such party, and, when
so executed and delivered, this Agreement will be the valid and binding
obligation of such party enforceable in accordance with its terms.
3.5. Bonding Requirement. Each party represents and warrants that all
of its directors, officers, partners and employees dealing with the money and/or
securities of the Trust are and shall continue to be at all times covered by a
blanket fidelity bond or similar coverage for the benefit of the Trust in an
amount not less than the amount required by the applicable rules of the NASD and
the federal securities laws. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company. All
parties shall make all reasonable efforts to see that this bond or another bond
containing these provisions is always in effect, shall provide evidence thereof
promptly to any other party upon written request therefor, and shall notify the
other parties promptly in the event that such coverage no longer applies.
ARTICLE IV
Regulatory Requirements
4.1. Trust Filings. The Trust shall amend the Trust's Registration
Statement and the Trust's 1940 Act Registration Statement from time to time as
required in order to effect the continuous offering of Trust shares in
compliance with applicable law and to maintain the Trust's registration under
the 1940 Act for so long as Trust shares are sold.
4.2. Contracts Filings. The Company shall amend the Contracts'
Registration Statement and the Account's 1940 Act Registration Statement from
time to time as required in order to effect the continuous offering of the
Contracts in compliance with applicable law or as may otherwise be required by
applicable law, but in any event shall maintain a current effective Contracts'
Registration Statement and the Account's registration under the 1940 Act for so
long as the Contracts are outstanding unless the Company has supplied the Trust
with an SEC no-action letter or opinion of counsel satisfactory to the Trust's
counsel to the effect that maintaining such Registration Statement on a current
basis is no longer required.
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The Company shall be responsible for filing all such Contract forms,
applications, marketing materials and other documents relating to the Contracts
and/or the Account with state insurance commissions, as required or customary,
and shall use its best efforts: (i) to obtain any and all approvals thereof,
under applicable state insurance law, of each state or other jurisdiction in
which Contracts are or may be offered for sale; and (ii) to keep such approvals
in effect for so long as the Contracts are outstanding.
4.3. Voting of Trust Shares. With respect to any matter put to vote by
the holders of Trust shares ("Voting Shares"), the Company will provide
"pass-through" voting privileges to owners of Contracts registered with the SEC
as long as the 1940 Act requires such privileges in such cases. In cases in
which "pass-through" privileges apply, the Company will (i) solicit voting
instructions from Contract Owners of SEC-registered Contracts; (ii) vote Voting
Shares attributable to Contract Owners in accordance with instructions or
proxies timely received from such Contract Owners; and (iii) vote Voting Shares
held by it that are not attributable to reserves for SEC-registered Contracts or
for which it has not received timely voting instructions in the same proportion
as instructions received in a timely fashion from Owners of SEC-registered
Contracts. The Company shall be responsible for ensuring that it calculates
"pass-through" votes for the Account in a manner consistent with the provisions
set forth above and with other Participating Insurance Companies. Neither the
Company nor any of its affiliates will in any way recommend action in connection
with, or oppose or interfere with, the solicitation of proxies for the Trust
shares held for such Contract Owners, except with respect to matters as to which
the Company has the right under Rule 6e-2 or 6e-3(T) under the 1940 Act, to vote
Voting Shares without regard to voting instructions from Contract Owners.
4.4. State Insurance Restrictions. The Company acknowledges and agrees
that it is the responsibility of the Company and other Participating Insurance
Companies to determine investment restrictions and any other restrictions,
limitations or requirements under state insurance law applicable to any Fund or
the Trust or the Distributor, and that neither the Trust nor the Distributor
shall bear any responsibility to the Company, other Participating Insurance
Companies or any Product Owners for any such determination or the correctness of
such determination. Schedule 4 sets forth the investment restrictions that the
Company and/or other Participating Insurance Companies have determined are
applicable to any Fund and with which the Trust has agreed to comply as of the
date of this Agreement. The Company shall inform the Trust of any investment
restrictions imposed by state insurance law that the Company determines may
become applicable to the Trust or a Fund from time to time as a result of the
Account's investment therein, other than those set forth on Schedule 4 to this
Agreement. Upon receipt of any such information from the Company or any other
Participating Insurance Company, the Trust shall determine whether it is in the
best interests of shareholders to comply with any such restrictions. If the
Trust determines that it is not in the best interests of shareholders (it being
understood that "shareholders" for this purpose shall mean Product Owners) to
comply with a restriction determined to be applicable by the Company, the Trust
shall so inform the Company, and the Trust and the Company shall discuss
alternative accommodations in the circumstances. If the Trust determines that it
is in the best interests of shareholders to comply with such restrictions, the
Trust and the Company shall amend Schedule 4 to this Agreement to reflect such
restrictions, subject to obtaining any required shareholder approval thereof.
4.5. Drafts of Filings. The Trust and the Company shall provide to each
other copies of draft versions of any Registration Statements, Prospectuses,
Statements of Additional Information, periodic and other shareholder or Contract
Owner reports, proxy statements, solicitations for voting instructions,
applications for exemptions, requests for no-
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action letters, and all amendments or supplements to any of the above, prepared
by or on behalf of either of them and that mentions the other party by name.
Such drafts shall be provided to the other party sufficiently in advance of
filing such materials with regulatory authorities in order to allow such other
party a reasonable opportunity to review the materials.
4.6. Copies of Filings. The Trust and the Company shall provide to each
other at least one complete copy of all Registration Statements, Prospectuses,
Statements of Additional Information, periodic and other shareholder or Contract
Owner reports, proxy statements, solicitations of voting instructions,
applications for exemptions, requests for no-action letters, and all amendments
or supplements to any of the above, that relate to the Trust, the Contracts or
the Account, as the case may be, promptly after the filing by or on behalf of
each such party of such document with the SEC or other regulatory authorities
(it being understood that this provision is not intended to require the Trust to
provide to the Company copies of any such documents prepared, filed or used by
Participating Investors other than the Company and the Account).
4.7. Regulatory Responses. Each party shall promptly provide to all
other parties copies of responses to no-action requests, notices, orders and
other rulings received by such party with respect to any filing covered by
Section 4.6 of this Agreement.
4.8. Complaints and Proceedings
(a) The Trust and/or the Distributor shall immediately notify
the Company of: (i) the issuance by any court or regulatory body of any
stop order, cease and desist order, or other similar order (but not
including an order of a regulatory body exempting or approving a
proposed transaction or arrangement) with respect to the Trust's
Registration Statement or the Prospectus of any Series or Class; (ii)
any request by the SEC for any amendment to the Trust's Registration
Statement or the Prospectus of any Series or Class; (iii) the
initiation of any proceedings for that purpose or for any other
purposes relating to the registration or offering of the Trust shares;
or (iv) any other action or circumstances that may prevent the lawful
offer or sale of Trust shares or any Class or Series in any state or
jurisdiction, including, without limitation, any circumstance in which
(A) such shares are not registered and, in all material respects,
issued and sold in accordance with applicable state and federal law or
(B) such law precludes the use of such shares as an underlying
investment medium for the Contracts. The Trust will make every
reasonable effort to prevent the issuance of any such stop order, cease
and desist order or similar order and, if any such order is issued, to
obtain the lifting thereof at the earliest possible time.
(b) The Company shall immediately notify the Trust and the
Distributor of: (i) the issuance by any court or regulatory body of any
stop order, cease and desist order, or other similar order (but not
including an order of a regulatory body exempting or approving a
proposed transaction or arrangement) with respect to the Contracts'
Registration Statement or the Contracts' Prospectus; (ii) any request
by the SEC for any amendment to the Contracts' Registration Statement
or Prospectus; (iii) the initiation of any proceedings for that purpose
or for any other purposes relating to the registration or offering of
the Contracts; or (iv) any other action or circumstances that may
prevent the lawful offer or sale of the Contracts or any class of
Contracts in any state or jurisdiction, including, without limitation,
any circumstance in which
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such Contracts are not registered, qualified
and approved, and, in all material respects, issued and sold in
accordance with applicable state and federal laws. The Company will
make every reasonable effort to prevent the issuance of any such stop
order, cease and desist order or similar order and, if any such order
is issued, to obtain the lifting thereof at the earliest possible time.
(c) Each party shall immediately notify the other parties when
it receives notice, or otherwise becomes aware of, the commencement of
any litigation or proceeding against such party or a person affiliated
therewith in connection with the issuance or sale of Trust shares or
the Contracts.
(d) The Company shall provide to the Trust and the Distributor
any complaints it has received from Contract Owners pertaining to the
Trust or a Fund, and the Trust and Distributor shall each provide to
the Company any complaints it has received from Contract Owners
relating to the Contracts.
4.9. Cooperation. Each party hereto shall cooperate with the other
parties and all appropriate government authorities (including without limitation
the SEC, the NASD and state securities and insurance regulators) and shall
permit such authorities reasonable access to its books and records in connection
with any investigation or inquiry by any such authority relating to this
Agreement or the transactions contemplated hereby. However, such access shall
not extend to attorney-client privileged information.
ARTICLE V
Sale, Administration and Servicing of the Contracts
5.1. Sale of the Contracts. The Company shall be fully responsible as
to the Trust and the Distributor for the sale and marketing of the Contracts.
The Company shall provide Contracts, the Contracts' and Trust's Prospectuses,
Contracts' and Trust's Statements of Additional Information, and all amendments
or supplements to any of the foregoing to Contract Owners and prospective
Contract Owners, all in accordance with federal and state laws. The Company
shall ensure that all persons offering the Contracts are duly licensed and
registered under applicable insurance and securities laws. The Company shall
ensure that each sale of a Contract satisfies applicable suitability
requirements under insurance and securities laws and regulations, including
without limitation the rules of the NASD. The Company shall adopt and implement
procedures reasonably designed to ensure that information concerning the Trust
and the Distributor that is intended for use only by brokers or agents selling
the Contracts (i.e., information that is not intended for distribution to
Contract Owners or offerees) is so used.
5.2. Administration and Servicing of the Contracts. The Company shall
be fully responsible as to the Trust and the Distributor for the underwriting,
issuance, service and administration of the Contracts and for the administration
of the Account, including, without limitation, the calculation of performance
information for the Contracts, the timely payment of Contract Owner redemption
requests and processing of Contract transactions, and the maintenance of a
service center, such functions to be performed in all respects at a level
commensurate with those standards prevailing in the variable insurance industry.
The Company shall provide to Contract Owners all Trust reports, solicitations
for voting instructions including any related Trust proxy solicitation
materials, and updated Trust Prospectuses as required under the federal
securities laws.
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5.3. Customer Complaints. The Company shall promptly address all
customer complaints and resolve such complaints consistent with high ethical
standards and principles of ethical conduct.
5.4. Trust Prospectuses and Reports. In order to enable the Company to
fulfill its obligations under this Agreement and the federal securities laws,
the Trust shall provide the Company with, at the Company's option, pdf files or
a copy in camera-ready form or other form suitable for printing or duplication
of: (i) the Trust's Prospectus for the Series and Classes listed on Schedule 3
and any supplement thereto; (ii) each Statement of Additional Information and
any supplement thereto; (iii) any Trust proxy soliciting material for such
Series or Classes; and (iv) any Trust periodic shareholder reports. The Trust
and the Company may agree upon alternate arrangements, but in all cases, the
Trust reserves the right to approve the printing of any such material. The Trust
shall provide the Company at least 10 days advance written notice when any such
material shall become available, provided, however, that in the case of a
supplement, the Trust shall provide the Company notice reasonable in the
circumstances, it being understood that circumstances surrounding such
supplement may not allow for advance notice. The Trust or Distributor shall use
its best efforts to notify the Company of any proxy proposals for shareholders
as soon as practicable prior to the appropriate Board vote for such proposal,
provided it is allowed under applicable securities laws. The Trust shall use its
best efforts to limit the number of proxy solicitations that are within the
reasonable control of the Trust and not required by statute or regulation. The
Company may not alter any material so provided by the Trust or the Distributor
(including without limitation presenting or delivering such material in a
different medium, e.g., electronic or Internet) without the prior written
consent of the Distributor.
5.5. Trust Advertising Material. No piece of advertising or sales
literature or other promotional material in which the Trust or the Distributor
is named (including, without limitation, material for prospects, existing
Contract Owners, brokers, rating or ranking agencies, or the press, whether in
print, radio, television, video, Internet, or other electronic medium) shall be
used by the Company or any person directly or indirectly authorized by the
Company, including without limitation, underwriters, distributors, and sellers
of the Contracts, except with the prior written consent of the Trust or the
Distributor, as applicable, as to the form, content and medium of such material,
which consent may not be unreasonably withheld. Any such piece shall be
furnished to the Trust for such consent at least seven (7) business days prior
to its use. The Trust or the Distributor shall respond to any request for
written consent within five (5) business days after receipt of such material,
but failure to respond shall not relieve the Company of the obligation to obtain
the prior written consent of the Trust or the Distributor. After receiving the
Trust's or Distributor's consent to the use of any such material, no further
changes may be made to disclosure concerning the Trust or the Distributor
without obtaining the Trust's or Distributor's consent to such changes. The
Trust or Distributor may at any time in its sole discretion, acting in good
faith, revoke such written consent, and upon notification of such revocation,
the Company shall no longer use the material subject to such revocation. Until
further notice to the Company, the Trust has delegated its rights and
responsibilities under this provision to the Distributor.
5.6. Contracts Advertising Material. No piece of advertising or sales
literature or other promotional material in which the Company is named shall be
used by the Trust or the Distributor, except with the prior written consent of
the Company. Any such piece shall be furnished to the Company for such consent
at least seven (7) business days prior to its use. The Company shall respond to
any request for written consent within five (5) business days after receipt of
such material, but failure to respond shall not relieve the Trust or the
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Distributor of the obligation to obtain the prior written consent of the
Company. The Company may at any time in its sole discretion, acting in good
faith, revoke any written consent, and upon notification of such revocation,
neither the Trust nor the Distributor shall use the material subject to such
revocation. The Company, upon prior written notice to the Trust, may delegate
its rights and responsibilities under this provision to the principal
underwriter for the Contracts.
5.7. Trade Names. No party shall use any other party's names, logos,
trademarks or service marks, whether registered or unregistered, without the
prior written consent of such other party, or after written consent therefor has
been revoked. The Company shall not use in advertising, publicity or otherwise
the name of the Trust, Distributor, or any of their affiliates nor any trade
name, trademark, trade device, service mark, symbol or any abbreviation,
contraction or simulation thereof of the Trust, Distributor, or their affiliates
without the prior written consent of the Trust or the Distributor in each
instance.
5.8. Representations by Company. Except with the prior written consent
of the Trust, the Company shall not give any information or make any
representations or statements about the Trust or the Funds nor shall it
authorize or allow any other person to do so except information or
representations contained in the Trust's Registration Statement or the Trust's
Prospectuses or in reports or proxy statements for the Trust, or in sales
literature or other promotional material approved in writing by the Trust or its
designee in accordance with this Article V, or in published reports or
statements of the Trust in the public domain.
5.9. Representations by Trust. Except with the prior written consent
of the Company, the Trust shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Account
or the Contracts other than the information or representations contained in the
Contracts' Registration Statement or Contracts' Prospectus or in published
reports of the Account which are in the public domain or in sales literature or
other promotional material approved in writing by the Company in accordance with
this Article V.
5.10. Advertising. For purposes of this Article V, the phrase "sales
literature or other promotional material" includes, but is not limited to, any
material constituting sales literature or advertising under the NASD rules, the
1940 Act or the 1933 Act.
ARTICLE VI
Compliance with Code
6.1. Section 817(h). Each Fund of the Trust shall comply with Section
817(h) of the Code and the regulations issued thereunder to the extent
applicable to the Fund as an investment company underlying the Account, and the
Trust shall notify the Company immediately upon having a reasonable basis for
believing that a Fund has ceased to so qualify or that it might not so qualify
in the future.
6.2. Subchapter M. Each Fund of the Trust shall maintain the
qualification of the Fund as a registered investment company (under Subchapter M
or any successor or similar provision), and the Trust shall notify the Company
immediately upon having a reasonable basis for believing that a Fund has ceased
to so qualify or that it might not so qualify in the future.
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6.3. Contracts. The Company shall ensure the continued treatment
of the Contracts as annuity contracts or life insurance policies, whichever is
appropriate, under applicable provisions of the Code and shall notify the Trust
and the Distributor immediately upon having a reasonable basis for believing
that the Contracts have ceased to be so treated or that they might not be so
treated in the future.
ARTICLE VII
Expenses
7.1. Expenses. All expenses incident to each party's performance
under this Agreement (including expenses expressly assumed by such party
pursuant to this Agreement) shall be paid by such party to the extent permitted
by law.
7.2. Trust Expenses. Expenses incident to the Trust's performance
of its duties and obligations under this Agreement include, but are not limited
to, the costs of:
(a) registration and qualification of the Trust shares
under the federal securities laws;
(b) preparation and filing with the SEC of the Trust's
Prospectuses, Trust's Statement of Additional
Information, Trust's Registration Statement, Trust
proxy materials and shareholder reports, and
preparation of a camera-ready copy of the
foregoing;
(c) preparation of all statements and notices required
by any Federal or state securities law;
(d) printing and mailing of all materials and reports
required to be provided by the Trust to its
existing shareholders;
(e) all taxes on the issuance or transfer of Trust
shares;
(f) payment of all applicable fees relating to the
Trust, including, without limitation, all fees due
under Rule 24f-2 in connection with sales of Trust
shares to qualified retirement plans, custodial,
auditing, transfer agent and advisory fees, fees
for insurance coverage and Trustees' fees;
(g) any expenses permitted to be paid or assumed by
the Trust pursuant to a plan, if any, under Rule
12b-1 under the 1940 Act;
(h) all expenses associated with supplements to the
Trust Prospectus that correct any errors or
omissions made by the Distributor or Trust within
the Trust Prospectus;
(i) any reasonable administrative costs or losses
incurred for correcting the underlying Contract
Owner accounts as a result of any incorrect
calculation of the net asset value, any incorrect
report of net asset value, or any untimely delay
in the reporting of the net asset value to the
extent such errors are within the Trust or the
Distributor's control and are not the fault of the
Company;
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(j) all expenses associated with Trust proxy solicitations, including
but not limited to, printing, distribution and cost of tabulating
of the proxies.
7.3. Company Expenses. Expenses incident to the Company's
performance of its duties and obligations under this Agreement include, but are
not limited to, the costs of:
(a) registration and qualification of the Contracts under the federal
securities laws;
(b) preparation and filing with the SEC of the Contracts' Prospectus
and Contracts' Registration Statement;
(c) the sale, marketing and distribution of the Contracts, including
printing and dissemination of Contracts' and the Trust's
Prospectuses and compensation for Contract sales;
(d) administration of the Contracts;
(e) payment of all applicable fees relating to the Contracts,
including, without limitation, all fees due under Rule 24f-2;
(f) preparation, printing and dissemination of all statements and
notices to Contract Owners required by any Federal or state
insurance law other than those paid for by the Trust;
(g) preparation, printing and dissemination of all marketing
materials for the Contracts and Trust except where other
arrangements are made in advance; and
(h) any reasonable administrative costs or losses incurred by the
Trust or the Distributor as a result of any incorrect calculation
of the net asset value, any incorrect report of net asset value,
or any untimely delay in the reporting of the net asset value to
the extent such errors are the fault of the Company.
7.4. 12b-1 Payments. The Trust shall pay no fee or other compensation
to the Company under this Agreement, except that if the Trust or any Series or
Class adopts and implements a plan pursuant to Rule 12b-1 under the 1940 Act to
finance distribution expenses, then payments may be made to the Company in
accordance with such plan. The Trust currently does not intend to make any
payments to finance distribution expenses pursuant to Rule 12b-1 under the 1940
Act or in contravention of such rule, although it may make payments pursuant to
Rule 12b-1 in the future. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1 and such formulation is required by the 1940 Act
or any rules or order thereunder, the Trust undertakes to have a Board of
Trustees, a majority of whom are not interested persons of the Trust, formulate
and approve any plan under Rule 12b-1 to finance distribution expenses.
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ARTICLE VIII
Potential Conflicts
8.1. Exemptive Order. The parties to this Agreement acknowledge that
the Trust has filed an application with the SEC to request an order (the
"Exemptive Order") granting relief from various provisions of the 1940 Act and
the rules thereunder to the extent necessary to permit Trust shares to be sold
to and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated Participating Insurance Companies and other
Qualified Persons (as defined in Section 2.8 hereof). It is anticipated that the
Exemptive Order, when and if issued, shall require the Trust and each
Participating Insurance Company to comply with conditions and undertakings
substantially as provided in this Article VIII. The Trust will not enter into a
participation agreement with any other Participating Insurance Company unless it
imposes the same conditions and undertakings on that company as are imposed on
the Company pursuant to this Article VIII.
8.2. Company Monitoring Requirements. The Company will monitor its
operations and those of the Trust for the purpose of identifying any material
irreconcilable conflicts or potential material irreconcilable conflicts between
or among the interests of Participating Plans, Product Owners of variable life
insurance policies and Product Owners of variable annuity contracts.
8.3. Company Reporting Requirements. The Company shall report any
conflicts or potential conflicts to the Trust Board and will provide the Trust
Board, at least annually, with all information reasonably necessary for the
Trust Board to consider any issues raised by such existing or potential
conflicts or by the conditions and undertakings required by the Exemptive Order.
The Company also shall assist the Trust Board in carrying out its obligations
including, but not limited to: (a) informing the Trust Board whenever it
disregards Contract Owner voting instructions with respect to variable life
insurance policies, and (b) providing such other information and reports as the
Trust Board may reasonably request. The Company will carry out these obligations
with a view only to the interests of Contract Owners.
8.4. Trust Board Monitoring and Determination. The Trust Board shall
monitor the Trust for the existence of any material irreconcilable conflicts
between or among the interests of Participating Plans, Product Owners of
variable life insurance policies and Product Owners of variable annuity
contracts and determine what action, if any, should be taken in response to
those conflicts. A majority vote of Trustees who are not interested persons of
the Trust as defined in the 1940 Act (the "disinterested trustees") shall
represent a conclusive determination as to the existence of a material
irreconcilable conflict between or among the interests of Product Owners and
Participating Plans and as to whether any proposed action adequately remedies
any material irreconcilable conflict. The Trust Board shall give prompt written
notice to the Company and Participating Plan of any such determination.
8.5. Undertaking to Resolve Conflict. In the event that a material
irreconcilable conflict of interest arises between Product Owners of variable
life insurance policies or Product Owners of variable annuity contracts and
Participating Plans, the Company will, at its own expense, take whatever action
is necessary to remedy such conflict as it adversely affects Contract Owners up
to and including (1) establishing a new registered management investment
company, and (2) withdrawing assets from the Trust attributable to reserves for
the Contracts subject to the conflict and reinvesting such assets in a different
investment
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medium (including another Fund of the Trust) or submitting the question of
whether such withdrawal should be implemented to a vote of all affected Contract
Owners, and, as appropriate, segregating the assets supporting the Contracts of
any group of such owners that votes in favor of such withdrawal, or offering to
such owners the option of making such a change. The Company will carry out the
responsibility to take the foregoing action with a view only to the interests of
Contract Owners.
8.6. Withdrawal. If a material irreconcilable conflict arises because
of the Company's decision to disregard the voting instructions of Contract
Owners of variable life insurance policies and that decision represents a
minority position or would preclude a majority vote at any Fund shareholder
meeting, then, at the request of the Trust Board, the Company will redeem the
shares of the Trust to which the disregarded voting instructions relate. No
charge or penalty, however, will be imposed in connection with such a
redemption.
8.7. Expenses Associated with Remedial Action. In no event shall the
Trust be required to bear the expense of establishing a new funding medium for
any Contract. The Company shall not be required by this Article to establish a
new funding medium for any Contract if an offer to do so has been declined by
vote of a majority of the Contract Owners materially adversely affected by the
irreconcilable material conflict.
8.8. Successor Rules. If and to the extent that Rule 6e-2 and Rule
6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from
any provisions of the 1940 Act or the rules promulgated thereunder with respect
to mixed and shared funding on terms and conditions materially different from
those contained in the Exemptive Order, then (i) the Trust and/or the Company,
as appropriate, shall take such steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, or Rule 6e-3, as adopted, as applicable, to the
extent such rules are applicable, and (ii) Sections 8.2 through 8.5 of this
Agreement shall continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in such Rule(s) as so
amended or adopted.
ARTICLE IX
Indemnification
9.1. Indemnification by the Company. The Company hereby agrees to, and
shall, indemnify and hold harmless the Trust, the Distributor and each person
who controls or is affiliated with the Trust or the Distributor within the
meaning of such terms under the 1933 Act or 1940 Act (but not any Participating
Insurance Companies or Qualified Persons) and any officer, trustee, partner,
director, employee or agent of the foregoing, against any and all losses,
claims, damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amounts
paid in settlement of, any action, suit or proceeding or any claim asserted), to
which they or any of them may become subject under any statute or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities:
(a) arise out of or are based upon any untrue statement of any
material fact contained in the Contracts Registration Statement,
Contracts Prospectus, sales literature or other promotional
material for the Contracts or the Contracts themselves (or any
amendment or supplement to any of the foregoing), or arise out of
or are based upon the omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not
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misleading in light of the circumstances in which they were
made; provided that this obligation to indemnify shall not
apply if such statement or omission was made in reliance upon
and in conformity with information furnished in writing to the
Company by the Trust or the Distributor for use in the
Contracts Registration Statement, Contracts Prospectus or in
the Contracts or sales literature or promotional material for
the Contracts (or any amendment or supplement to any of the
foregoing) or otherwise for use in connection with the sale of
the Contracts or Trust shares; or
(b) arise out of any untrue statement of a material fact contained
in the Trust Registration Statement, any Prospectus for Series
or Classes or sales literature or other promotional material
of the Trust (or any amendment or supplement to any of the
foregoing), or the omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading in light of the
circumstances in which they were made, if such statement or
omission was made in reliance upon and in conformity with
information furnished to the Trust or Distributor in writing
by or on behalf of the Company; or
(c) arise out of or are based upon any wrongful conduct of, or
violation of federal or state law by, the Company or persons
under its control or subject to its authorization, including
without limitation, any broker-dealers or agents authorized to
sell the Contracts, with respect to the sale, marketing or
distribution of the Contracts or Trust shares, including,
without limitation, any impermissible use of broker-only
material, unsuitable or improper sales of the Contracts or
unauthorized representations about the Contracts or the Trust;
or
(d) arise as a result of any failure by the Company or persons
under its control (or subject to its authorization) to provide
services, furnish materials or make payments as required under
this Agreement; or
(e) arise out of any material breach by the Company or persons
under its control (or subject to its authorization) of this
Agreement; or
(f) any breach of any warranties contained in Article III hereof,
any failure to transmit a request for redemption or purchase
of Trust shares or payment therefor on a timely basis in
accordance with the procedures set forth in Article II, or any
unauthorized use of the names or trade names of the Trust or
the Distributor.
This indemnification is in addition to any liability that the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is caused by the
willful misfeasance, bad faith, gross negligence or reckless disregard of duty
by the party seeking indemnification.
9.2. Indemnification by the Trust. The Trust hereby agrees to, and
shall, indemnify and hold harmless the Company and each person who controls or
is affiliated with the Company within the meaning of such terms under the 1933
Act or 1940 Act and any officer, director, employee or agent of the foregoing,
against any and all losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any action,
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suit or proceeding or any claim asserted), to which they or any of them may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities:
(a) arise out of or are based upon any untrue statement of any
material fact contained in the Trust Registration Statement,
any Prospectus for Series or Classes or sales literature or
other promotional material of the Trust (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading in light of the circum-
stances in which they were made; provided that this obligation
to indemnify shall not apply if such statement or omission was
made in reliance upon and in conformity with information
furnished in writing by the Company to the Trust or the
Distributor for use in the Trust Registration Statement, Trust
Prospectus or sales literature or promotional material for the
Trust (or any amendment or supplement to any of the foregoing)
or otherwise for use in connection with the sale of the
Contracts or Trust shares; or
(b) arise out of any untrue statement of a material fact contained
in the Contracts Registration Statement, Contracts Prospectus
or sales literature or other promotional material for the
Contracts (or any amendment or supplement to any of the
foregoing), or the omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading in light of the
circumstances in which they were made, if such statement or
omission was made in reliance upon information furnished in
writing by the Trust to the Company; or
(c) arise out of or are based upon wrongful conduct of the Trust
or its Trustees or officers with respect to the sale of Trust
shares; or
(d) arise as a result of any failure by the Trust to provide
services, furnish materials or make payments as required under
the terms of this Agreement; or
(e) arise out of any material breach by the Trust of this
Agreement (including any breach of Section 6.1 of this
Agreement and any warranties contained in Article III hereof);
(f) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset value
per share within the Trust's or the Distributor's control
which are not the fault of the Company, provided the foregoing
shall be limited to reasonable administrative costs or losses
associated with correcting the underlying Contract Owner
accounts.
it being understood that in no way shall the Trust be liable to the Company with
respect to any violation of insurance law, compliance with which is a
responsibility of the Company under this Agreement or otherwise or as to which
the Company failed to inform the Trust in accordance with Section 4.4 hereof.
This indemnification is in addition to any liability that the Trust may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is caused by the
willful misfeasance, bad faith, gross negligence or reckless disregard of duty
by the party seeking indemnification.
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9.3. Indemnification by the Distributor. The Distributor hereby agrees
to, and shall, indemnify and hold harmless the Company and each person who
controls or is affiliated with the Company within the meaning of such terms
under the 1933 Act or 1940 Act and any officer, director, employee or agent of
the foregoing, against any and all losses, claims, damages or liabilities, joint
or several (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement of, any action,
suit or proceeding or any claim asserted), to which they or any of them may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities:
(a) arise out of or are based upon any untrue statement of any
material fact contained in the Trust Registration Statement, any
Prospectus for Series or Classes or sales literature or other
promotional material of the Trust (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon the
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading
in light of the circumstances in which they were made; provided
that this obligation to indemnify shall not apply if such
statement or omission was made in reliance upon and in conformity
with information furnished in writing by the Company to the Trust
or Distributor for use in the Trust Registration Statement, Trust
Prospectus or sales literature or promotional material for the
Trust (or any amendment or supplement to any of the foregoing) or
otherwise for use in connection with the sale of the Contracts or
Trust shares; or
(b) arise out of any untrue statement of a material fact contained
in the Contracts Registration Statement, Contracts Prospectus
or sales literature or other promotional material for the
Contracts (or any amendment or supplement to any of the
foregoing), or the omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading in light of the
circumstances in which they were made, if such statement or
omission was made in reliance upon information furnished in
writing by the Distributor to the Company; or
(c) arise out of or are based upon wrongful conduct of the
Distributor or persons under its control with respect to the
sale of Trust shares; or
(d) arise as a result of any failure by the Distributor or persons
under its control to provide services, furnish materials or
make payments as required under the terms of this Agreement;
or
(e) arise out of any material breach by the Distributor or persons
under its control of this Agreement (including any breach of
Section 6.1 of this Agreement and any warranties contained in
Article III hereof);
it being understood that in no way shall the Distributor be liable to the
Company with respect to any violation of insurance law, compliance with which is
a responsibility of the Company under this Agreement or otherwise or as to which
the Company failed to inform the Distributor in accordance with Section 4.4
hereof. This indemnification is in addition to any liability that the
Distributor may otherwise have; provided, however, that no party shall be
entitled to indemnification if such loss, claim, damage or liability is caused
by the willful
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misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.
9.4. Rule of Construction. It is the parties' intention that, in the
event of an occurrence for which the Trust has agreed to indemnify the Company,
the Company shall seek indemnification from the Trust only in circumstances in
which the Trust is entitled to seek indemnification from a third party with
respect to the same event or cause thereof.
9.5. Indemnification Procedures. After receipt by a party entitled to
indemnification ("indemnified party") under this Article IX of notice of the
commencement of any action, if a claim in respect thereof is to be made by the
indemnified party against any person obligated to provide indemnification under
this Article IX ("indemnifying party"), such indemnified party will notify the
indemnifying party in writing of the commencement thereof as soon as practicable
thereafter, provided that the omission to so notify the indemnifying party will
not relieve it from any liability under this Article IX, except to the extent
that the omission results in a failure of actual notice to the indemnifying
party and such indemnifying party is damaged solely as a result of the failure
to give such notice. The indemnifying party, upon the request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the reasonable fees and disbursements
of such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent but if settled with such consent
or if there be a final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment.
A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article IX. The
indemnification provisions contained in this Article IX shall survive any
termination of this Agreement.
ARTICLE X
Relationship of the Parties; Termination
10.1. Relationship of Parties. The Company is to be an independent
contractor vis-a-vis the Trust, the Distributor, or any of their affiliates for
all purposes hereunder and will have no authority to act for or represent any of
them (except to the limited extent the Company acts as agent of the Trust
pursuant to Section 2.3(a) of this Agreement). In addition, no officer or
employee of the Company will be deemed to be an employee or agent of the Trust,
Distributor, or any of their affiliates. The Company will not act as an
"underwriter" or "distributor" of the Trust, as those terms variously are used
in the 1940 Act, the 1933 Act, and rules and regulations promulgated thereunder.
10.2. Non-Exclusivity and Non-Interference. The parties hereto
acknowledge that the arrangement contemplated by this Agreement is not
exclusive; the Trust shares may be sold to other insurance companies and
investors (subject to Section 2.8 hereof) and the
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cash value of the Contracts may be invested in other investment companies,
provided, however, that until this Agreement is terminated pursuant to this
Article X:
(a) the Company shall promote the Trust and the Funds made
available hereunder on the same basis as other funding
vehicles available under the Contracts;
(b) the Company shall not, without prior notice to the Distributor
(unless otherwise required by applicable law), take any action
to operate the Account as a management investment company
under the 1940 Act;
(c) the Company shall not, without the prior written consent of
the Distributor (unless otherwise required by applicable law),
solicit, induce or encourage Contract Owners to change or
modify the Trust to change the Trust's distributor or
investment adviser or to transfer or withdraw Contract Values
allocated to a Fund;
(d) the Company shall not, without the prior written consent of
the Distributor (unless otherwise required by applicable law)
solicit, induce or encourage Contract Owners to exchange their
Contracts for contracts not allowing for investment in the
Trust, except where the Company has determined such
solicitation, inducement or encouragement to be in the best
interests of Contract Owners;
(e) the Company shall not substitute another investment company
for one or more Funds without providing written notice to the
Distributor at least 60 days in advance of effecting any such
substitution; and
(f) the Company shall not withdraw the Account's investment in the
Trust or a Fund of the Trust except as necessary to facilitate
Contract Owner requests and routine Contract processing.
10.3. Termination of Agreement. This Agreement shall not terminate
until (i) the Trust is dissolved, liquidated, or merged into another entity, or
(ii) as to any Fund that has been made available hereunder, the Account no
longer invests in that Fund and the Company has confirmed in writing to the
Distributor, if so requested by the Distributor, that it no longer intends to
invest in such Fund. However, certain obligations of, or restrictions on, the
parties to this Agreement may terminate as provided in Sections 10.4 through
10.6 and the Company may be required to redeem Trust shares pursuant to Section
10.7 or in the circumstances contemplated by Article VIII. Article IX and
Sections 5.7, 10.8 and 10.9 shall survive any termination of this Agreement.
10.4. Termination of Offering of Trust Shares. The obligation of the
Trust and the Distributor to make Trust shares available to the Company for
purchase pursuant to Article II of this Agreement shall terminate at the option
of the Distributor upon written notice to the Company as provided below:
(a) upon institution of formal proceedings against the Company, or
the Distributor's reasonable determination that institution of
such proceedings is being considered by the NASD, the SEC, the
insurance commission of any state or any other regulatory body
regarding the Company's duties under this
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Agreement or related to the sale of the Contracts, the operation
of the Account, the administration of the Contracts or the
purchase of Trust shares, or an expected or anticipated ruling,
judgment or outcome which would, in the Distributor's reasonable
judgment exercised in good faith, materially impair the Company's
or Trust's ability to meet and perform the Company's or Trust's
obligations and duties hereunder, such termination effective upon
15 days prior written notice;
(b) in the event any of the Contracts are not registered, issued
or sold in accordance with applicable federal and/or state
law, such termination effective immediately upon receipt of
written notice;
(c) if the Distributor shall determine, in its sole judgment
exercised in good faith, that either (1) the Company shall
have suffered a material adverse change in its business or
financial condition or (2) the Company shall have been the
subject of material adverse publicity which is likely to have
a material adverse impact upon the business and operations of
either the Trust or the Distributor, such termination
effective upon 30 days prior written notice;
(d) if the Distributor suspends or terminates the offering of Trust
shares of any Series or Class to all Participating Investors or
only designated Participating Investors, if such action is
required by law or by regulatory authorities having jurisdiction
or if, in the sole discretion of the Distributor acting in good
faith, suspension or termination is necessary in the best
interests of the shareholders of any Series or Class (it being
understood that "shareholders" for this purpose shall mean
Product Owners), such notice effective immediately upon receipt
of written notice, it being understood that a lack of
Participating Investor interest in a Series or Class may be
grounds for a suspension or termination as to such Series or
Class and that a suspension or termination shall apply only to
the specified Series or Class;
(e) upon the Company's assignment of this Agreement (including,
without limitation, any transfer of the Contracts or the
Account to another insurance company pursuant to an assumption
reinsurance agreement) unless the Trust consents thereto, such
termination effective upon 30 days prior written notice;
(f) if the Company is in material breach of any provision of this
Agreement, which breach has not been cured to the satisfaction
of the Trust within 10 days after written notice of such
breach has been delivered to the Company, such termination
effective upon expiration of such 10-day period; or
(g) upon the determination of the Trust s Board to dissolve,
liquidate or merge the Trust as contemplated by Section
10.3(i), upon termination of the Agreement pursuant to Section
10.3(ii), or upon notice from the Company pursuant to Section
10.5 or 10.6, such termination pursuant hereto to be effective
upon 15 days prior written notice.
Except in the case of an option exercised under clause (b), (d) or (g), the
obligations shall terminate only as to new Contracts and the Distributor shall
continue to make Trust shares available to the extent necessary to permit owners
of Contracts in effect on the effective date of such termination (hereinafter
referred to as "Existing Contracts") to reallocate investments
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in the Trust, redeem investments in the Trust and/or invest in the Trust upon
the making of additional purchase payments under the Existing Contracts.
10.5. Termination of Investment in a Fund. The Company may elect to
cease investing in a Fund, promoting a Fund as an investment option under the
Contracts, or withdraw its investment or the Account's investment in a Fund,
subject to compliance with applicable law, upon written notice to the Trust
within 15 days of the occurrence of any of the following events (unless provided
otherwise below):
(a) if the Trust informs the Company pursuant to Section 4.4 that
it will not cause such Fund to comply with investment
restrictions as requested by the Company and the Trust and the
Company are unable to agree upon any reasonable alternative
accommodations;
(b) if shares in such Fund are not reasonably available to meet
the requirements of the Contracts as determined by the Company
(including any non-availability as a result of notice given by
the Distributor pursuant to Section 10.4(d)), and the
Distributor, after receiving written notice from the Company
of such non-availability, fails to make available, within 10
days after receipt of such notice, a sufficient number of
shares in such Fund or an alternate Fund to meet the
requirements of the Contracts;
(c) if such Fund fails to meet the diversification requirements
specified in Section 817(h) of the Code and any regulations
thereunder and the Trust, upon written request, fails to
provide reasonable assurance that it will take action to cure
or correct such failure; or
(d) at any time in the Company's sole discretion upon 4 months prior
written notice to the Trust.
Such termination shall apply only as to the affected Fund and shall not apply to
any other Fund in which the Company or the Account invests.
10.6. Termination of Investment by the Company. The Company may elect
to cease investing in all Series or Classes of the Trust made available
hereunder, promoting the Trust as an investment option under the Contracts, or
withdraw its investment or the Account s investment in the Trust, subject to
compliance with applicable law, upon written notice to the Trust within 15 days
of the occurrence of any of the following events (unless provided otherwise
below):
(a) upon institution of formal proceedings against the Trust or
the Distributor (but only with regard to the Trust) by the
NASD, the SEC or any state securities or insurance commission
or any other regulatory body, or an expected or anticipated
ruling, judgment or outcome which would, in the Company's
reasonable judgment exercised in good faith, materially impair
the Company's or Trust's ability to meet and perform the
Company's or Trust's obligations and duties hereunder;
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(b) if, with respect to the Trust or a Fund, the Trust or the Fund
ceases to qualify as a regulated investment company under
Subchapter M of the Code, as defined therein, or any successor
or similar provision, or if the Company reasonably believes
that the Trust may fail to so qualify, and the Trust, upon
written request, fails to provide reasonable assurance that it
will take action to cure or correct such failure within 30
days;
(c) if the Trust or Distributor is in material breach of a
provision of this Agreement, which breach has not been cured
to the satisfaction of the Company within 10 days after
written notice of such breach has been delivered to the Trust
or the Distributor, as the case may be;
(d) in the event any of the Trust's shares are not registered,
issued or sold in material compliance with applicable federal
and/or state law, such termination effective immediately upon
receipt of written notice;
(e) if the Company shall determine, in its sole judgment exercised
in good faith, that either (1) the Distributor or the Trust's
investment adviser shall have suffered a material adverse
change in its business or financial condition or (2) the
Distributor, the Trust's investment adviser or the Trust shall
have been the subject of material adverse publicity (excluding
with respect to the Trust, market events impacting the Trust's
performance) which is likely to have a material adverse impact
upon the business and operations of either the Trust, its
investment adviser or the Distributor, such termination
effective upon 30 days prior written notice;
(f) upon the assignment of this Agreement by the Distributor
unless the Company consents thereto, such termination
effective upon 30 days prior written notice; or
(g) if, in the sole discretion of the Company acting in good faith,
suspension or termination is necessary in the best interests of
the shareholders of any Series or Class (it being understood that
"shareholders" for this purpose shall mean Product Owners), such
notice effective immediately after receipt of (i) written notice
detailing the reasons (including a description of any objective
criteria) in accordance with which the Company has determined
such suspension or termination is necessary and (ii) any required
regulatory approval in connection with such suspension or
termination, it being understood that a lack of Participating
Investor interests in a Series or Class may be grounds for a
suspension or termination as to such Series or Class and that a
suspension or termination shall apply only to that specified
Series or Class.
10.7. Company Required to Redeem. The parties understand and
acknowledge that it is essential for compliance with Section 817(h) of the Code
that the Contracts qualify as annuity contracts or life insurance policies, as
applicable, under the Code. Accordingly, if any of the Contracts cease to
qualify as annuity contracts or life insurance policies, as applicable, under
the Code, or if the Trust reasonably believes that any such Contracts may fail
to so qualify, the Trust shall have the right to require the Company to redeem
Trust shares attributable to such Contracts upon notice to the Company and the
Company shall so redeem such Trust shares in order to ensure that the Trust
complies with the provisions of Section 817(h) of the Code applicable to
ownership of Trust shares. Notice to the Company shall specify the period of
time the Company has to redeem the Trust shares or to make other
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arrangements satisfactory to the Trust and its counsel, such period of time to
be determined with reference to the requirements of Section 817(h) of the Code.
In addition, the Company may be required to redeem Trust shares pursuant to
action taken or request made by the Trust Board in accordance with the Exemptive
Order described in Article VIII or any conditions or undertakings set forth or
referenced therein, or other SEC rule, regulation or order that may be adopted
after the date hereof. The Company agrees to redeem shares in the circumstances
described herein and to comply with applicable terms and provisions. Also, in
the event that the Distributor suspends or terminates the offering of a Series
or Class pursuant to Section 10.4(d) of this Agreement, the Company, upon
request by the Distributor, will cooperate in taking appropriate action to
withdraw the Account's investment in the respective Fund.
10.8. Minimum Investment. The Company acknowledges its intention to
make the selected Funds of the Trust available under the Contracts for a
significant period of time and acknowledges further that a termination of this
Agreement or the availability of a Fund would prevent the Trust from benefiting
from the anticipated economies of scale and the Distributor from recovering its
up-front costs in establishing the systems and interface required under the
terms of this Agreement. Accordingly, in the event that the Company withdraws
all or substantially all of its investment in the Trust or a Fund less than
three years after the initial investment in the Trust or Fund (other than in
response to actions by the Distributor pursuant to Section 10.4(d) of this
Agreement), the Company, upon request, shall reimburse the Distributor for
reasonably identifiable costs attributable to the start-up of the Trust or Fund,
as applicable, and establishing the systems and interface contemplated by this
Agreement, unless the Company withdrew due to the Trust or Distributor's breach
of any provision in this Agreement.
10.9. Confidentiality. The Company will keep confidential any
information acquired as a result of this Agreement regarding the business and
affairs of the Trust, the Distributor, and their affiliates.
ARTICLE XI
Applicability to New Accounts and New Contracts
The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect, as appropriate, changes in or relating to the
Contracts, any Series or Class, additions of new classes of Contracts to be
issued by the Company and separate accounts therefor investing in the Trust.
Such amendments may be made effective by executing the form of amendment
included on each schedule attached hereto. The provisions of this Agreement
shall be equally applicable to each such class of Contracts, Series, Class or
separate account, as applicable, effective as of the date of amendment of such
Schedule, unless the context otherwise requires. The parties to this Agreement
may amend this Agreement from time to time by written agreement signed by all of
the parties.
ARTICLE XII
Notice, Request or Consent
Any notice, request or consent to be provided pursuant to this
Agreement is to be made in writing and shall be given:
If to the Trust:
Douglas C. Grip
President
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Goldman Sachs Variable Insurance Trust
One New York Plaza
New York, NY 10004
If to the Distributor:
Douglas C. Grip
Vice President
Goldman Sachs & Co.
One New York Plaza
New York, NY 10004
If to the Company:
Massachusetts Mutual Life Insurance Company
Office of the General Counsel
1295 State Street
Springfield, MA 01111-0001
(fax) 860-987-2992
or at such other address as such party may from time to time specify in writing
to the other party. Each such notice, request or consent to a party shall be
sent by registered or certified United States mail with return receipt requested
or by overnight delivery with a nationally recognized courier, and shall be
effective upon receipt. Notices pursuant to the provisions of Article II may be
sent by facsimile to the person designated in writing for such notices.
ARTICLE XIII
Miscellaneous
13.1. Interpretation. This Agreement shall be construed and the
provisions hereof interpreted under and in accordance with the laws of the state
of Delaware, without giving effect to the principles of conflicts of laws,
subject to the following rules:
(a) This Agreement shall be subject to the provisions of the 1933
Act, 1940 Act and Securities Exchange Act of 1934, as amended,
and the rules, regulations and rulings thereunder, including
such exemptions from those statutes, rules, and regulations as
the SEC may grant, and the terms hereof shall be limited,
interpreted and construed in accordance therewith.
(b) The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or
effect.
(c) If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of the Agreement shall not be affected thereby.
(d) The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all
rights, remedies and obligations, at law or in equity, which
the parties hereto are entitled to under state and federal
laws.
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13.2. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which together shall constitute one and the
same instrument.
13.3. No Assignment. Neither this Agreement nor any of the rights and
obligations hereunder may be assigned by the Company, the Distributor or the
Trust without the prior written consent of the other parties.
13.4. Declaration of Trust. A copy of the Declaration of Trust of the
Trust is on file with the Secretary of State of the state of Delaware, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as trustees, and is not binding upon any of the Trustees,
officers or shareholders of the Trust individually, but binding only upon the
assets and property of the Trust. No Series of the Trust shall be liable for the
obligations of any other Series of the Trust.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly authorized officer
on the date specified below.
GOLDMAN SACHS VARIABLE INSURANCE TRUST
(Trust)
Date: By:
------------- ----------------
Name:
Title:
GOLDMAN, SACHS & CO.
(Distributor)
Date: By:
------------- ----------------
Name:
Title:
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
(Company)
Date: By:
------------- ----------------
Name:
Title:
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Exhibit 1(A)(8)(e)
PARTICIPATION AGREEMENT
-----------------------
Among
VARIABLE INSURANCE PRODUCTS FUND II,
-----------------------------------
FIDELITY DISTRIBUTORS CORPORATION
---------------------------------
and
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
-------------------------------------------
THIS AGREEMENT, made and entered into as of the 1st day of May,
1998 by and among MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, (hereinafter the
"Company"), a Massachusetts corporation, on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A hereto as may be
amended from time to time (each such account hereinafter referred to as the
"Account"), and the VARIABLE INSURANCE PRODUCTS FUND II, an unincorporated
business trust organized under the laws of the Commonwealth of Massachusetts
(hereinafter the "Fund") and FIDELITY DISTRIBUTORS CORPORATION (hereinafter the
"Underwriter"), a Massachusetts corporation.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and variable
annuity contracts (collectively, the "Variable Insurance Products") to be
offered by insurance companies which have entered into participation agreements
with the Fund and the Underwriter (hereinafter "Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into
several series of shares, each representing the interest in a particular managed
portfolio of securities and other assets, any one or more of which may be made
available under this Agreement, as may be amended from time to time by mutual
agreement of the parties hereto (each such series hereinafter referred to as a
"Portfolio"); and
WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission, dated September 17, 1986 (File No. 812-6422), granting
Participating Insurance Companies and variable annuity and variable life
insurance separate accounts
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exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the
Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and
Rules 6e-2(b) (15) and 6e-3(T) (b) (15) thereunder, to the extent necessary to
permit shares of the Fund to be sold to and held by variable annuity and
variable life insurance separate accounts of both affiliated and unaffiliated
life insurance companies (hereinafter the "Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and its shares are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, Fidelity Management & Research Company (the "Adviser")
is duly registered as an investment adviser under the federal Investment
Advisers Act of 1940 and any applicable state securities law; and
WHEREAS, the Company has registered or will register certain
Variable Insurance Products under the 1933 Act;
and
WHEREAS, each Account is a duly organized, validly existing
segregated asset account, established by resolution of the Board of Directors of
the Company, on the date shown for such Account on Schedule A hereto, to set
aside and invest assets attributable to the aforesaid variable annuity
contracts; and
WHEREAS, the Company has registered or will register each
Account as a unit investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with
the Securities and Exchange Commission ("SEC") under the Securities Exchange Act
of 1934, as amended, (hereinafter the "1934 Act"), and is a member in good
standing of the National Association of Securities Dealers, Inc. (hereinafter
"NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws
and regulations, the Company intends to purchase shares in the Portfolios on
behalf of each Account to fund certain of the aforesaid Variable Insurance
Products and the Underwriter is authorized to sell such shares to unit
investment trusts such as each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund and the Underwriter agree as follows:
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ARTICLE I. Sale of Fund Shares
-------------------
1.1. The Underwriter agrees to sell to the Company those shares
of the Fund which each Account orders, executing such orders on a daily basis at
the net asset value next computed after receipt by the Fund or its designee of
the order for the shares of the Fund. For purposes of this Section 1.1, the
Company shall be the designee of the Fund for receipt of such orders from each
Account and receipt by such designee shall constitute receipt by the Fund;
provided that the Fund receives notice of such order by 9:00 a.m. Boston time on
the next following Business Day. "Business Day" shall mean any day on which the
New York Stock Exchange is open for trading and on which the Fund calculates its
net asset value pursuant to the rules of the Securities and Exchange Commission.
1.2. The Fund agrees to make its shares available indefinitely
for purchase at the applicable net asset value per share by the Company and its
Accounts on those days on which the Fund calculates its net asset value pursuant
to rules of the Securities and Exchange Commission and the Fund shall use
reasonable efforts to calculate such net asset value on each day which the New
York Stock Exchange is open for trading. Notwithstanding the foregoing, the
Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the offering of
shares of any Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the Board
acting in good faith and in light of their fiduciary duties under federal and
any applicable state laws, necessary in the best interests of the shareholders
of such Portfolio.
1.3. The Fund and the Underwriter agree that shares of the Fund
will be sold only to Participating Insurance Companies and their separate
accounts. No shares of any Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not sell Fund shares to
any insurance company or separate account unless an agreement containing
provisions substantially the same as Articles I, III, V, VII and Section 2.5 of
Article II of this Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the Company's
request, any full or fractional shares of the Fund held by the Company,
executing such requests on a daily basis at the net asset value next computed
after receipt by the Fund or its designee of the request for redemption. For
purposes of this Section 1.5, the Company shall be the designee of the Fund for
receipt of requests for redemption from each Account and receipt by such
designee shall constitute receipt by the Fund; provided that the Fund receives
notice of such request for redemption on the next following Business Day.
1.6. The Company agrees that purchases and redemptions of
Portfolio shares offered by the then current prospectus of the Fund shall be
made in accordance with the
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provisions of such prospectus. The Company agrees that all net amounts available
under the Variable Insurance Products with the form number(s) which are listed
on Schedule A attached hereto and incorporated herein by this reference, as such
Schedule A may be amended from time to time hereafter by mutual written
agreement of all the parties hereto, (the "Contracts") shall be invested in the
Fund, in such other Funds advised by the Adviser as may be mutually agreed to in
writing by the parties hereto, or in the Company's general account, provided
that such amounts may also be invested in an investment company other than the
Fund if (a) such other investment company, or series thereof, has investment
objectives or policies that are substantially different from the investment
objectives and policies of all the Portfolios of the Fund; or (b) the Company
gives the Fund and the Underwriter 45 days written notice of its intention to
make such other investment company available as a funding vehicle for the
Contracts; or (c) such other investment company was available as a funding
vehicle for the Contracts prior to the date of this Agreement and the Company so
informs the Fund and Underwriter prior to their signing this Agreement (a list
of such funds appearing on Schedule C to this Agreement); or (d) the Fund or
Underwriter consents to the use of such other investment company.
1.7. The Company shall pay for Fund shares on the next Business
Day after an order to purchase Fund shares is made in accordance with the
provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted
by wire. For purpose of Section 2.10 and 2.11, upon receipt by the Fund of the
federal funds so wired, such funds shall cease to be the responsibility of the
Company and shall become the responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will be by book
entry only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
1.9. The Fund shall furnish same day notice (via electronic
transmission and/or facsimile, concurrent with the transmission of the net asset
value per share information set forth in Section 1.10) to the Company of any
income, dividends or capital gain distributions payable on the Fund's shares.
The Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on the Portfolio shares in additional shares of
that Portfolio. The Company reserves the right to revoke this election and to
receive all such income dividends and capital gain distributions in cash. The
Fund shall notify the Company of the number of shares so issued as payment of
such dividends and distributions.
1.10 The fund shall make the net asset value per share for each
Portfolio available to the Company on each Business Day on a daily basis as soon
as reasonably practical after the net asset value per share is calculated each
Business Day (normally by 6:30 p.m. Boston time) via electronic transmission
and/or facsimile and shall use its best efforts to make such net asset value per
share available by 7 p.m. Boston time. The Underwriter shall
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<PAGE>
provide the Company each Business Day with same day notice of Fund shares held
by the Accounts by 3:00 p.m. Boston time via electronic transmission and/or
facsimile.
ARTICLE II. Representations and Warranties
------------------------------
2.1. The Company represents and warrants that the Contracts are
or will be registered under the 1933 Act; that the Contracts will be issued and
sold in compliance in all material respects with all applicable Federal and
State laws and that the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally and validly
established each Account prior to any issuance or sale thereof as a segregated
asset account under Section 132G of Chapter 175 of the Massachusetts Insurance
Code and has registered or, prior to any issuance or sale of the Contracts, will
register each Account as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account for the
Contracts.
2.2. The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with the laws of the Commonwealth
of Massachusetts and all applicable federal and state securities laws and that
the Fund is and shall remain registered under the 1940 Act. The Fund shall amend
the Registration Statement for its shares under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of its
shares. The Fund shall register and qualify the shares for sale in accordance
with the laws of the various states only if and to the extent deemed advisable
by the Fund or the Underwriter.
2.3. The Fund represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended, (the "Code") and that it will make every effort to maintain
such qualification (under Subchapter M or any successor or similar provision)
and that it will notify the Company immediately upon having a reasonable basis
for believing that it has ceased to so qualify or that it might not so qualify
in the future.
2.4. The Company represents that the Contracts are currently
treated as life insurance or annuity contracts, under applicable provisions of
the Code and that it will make every effort to maintain such treatment and that
it will notify the Fund and the Underwriter immediately upon having a reasonable
basis for believing that the Contracts have ceased to be so treated or that they
might not be so treated in the future.
2.5. (a) With respect to Initial Class shares, the Fund
currently does not intend to make any payments to finance distribution expenses
pursuant to Rule 12b-1 under the 1940 Act or otherwise, although it may make
such payments in the future. The Fund has adopted a "no fee" or "defensive" Rule
12b-1 Plan under which it makes no payments for
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distribution expenses. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1, the Fund undertakes to have a board of
trustees, a majority of whom are not interested persons of the Fund, formulate
and approve any plan under Rule 12b-1 to finance distribution expenses.
(b) With respect to Service Class shares, the Fund has
adopted a Rule 12b-1 Plan under which it makes payments to finance distribution
expenses. The Fund represents and warrants that it has a board of trustees, a
majority of whom are not interested persons of the Fund, which has formulated
and approved the Fund's Rule 12b-1 Plan to finance distribution expenses of the
Fund and that any changes to the Fund's Rule 12b-1 Plan will be approved by a
similarly constituted board of trustees.
2.6. The Fund makes no representation as to whether any aspect
of its operations (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulations of the
various states except that the Fund represents that the Fund's investment
policies, fees and expenses are and shall at all times remain in compliance with
the laws of the Commonwealth of Massachusetts and the Fund and the Underwriter
represent that their respective operations are and shall at all times remain in
material compliance with the laws of the Commonwealth of Massachusetts to the
extent required to perform this Agreement.
2.7. The Underwriter represents and warrants that it is a
member in good standing of the NASD and is registered as a broker-dealer with
the SEC. The Underwriter further represents that it will sell and distribute the
Fund shares in accordance with the laws of the Commonwealth of Massachusetts and
all applicable state and federal securities laws, including without limitation
the 1933 Act, the 1934 Act, and the 1940 Act.
2.8. The Fund represents that it is lawfully organized and
validly existing under the laws of the Commonwealth of Massachusetts and that it
does and will comply in all material respects with the 1940 Act.
2.9. The Underwriter represents and warrants that the Adviser
is and shall remain duly registered in all material respects under all
applicable federal and state securities laws and that the Adviser shall perform
its obligations for the Fund in compliance in all material respects with the
laws of the Commonwealth of Massachusetts and any applicable state and federal
securities laws.
2.10. The Fund and Underwriter represent and warrant that all of
their directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid Bond
shall
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include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.11. The Company represents and warrants that all of its
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
covered by a blanket fidelity bond or similar coverage for the benefit of the
Fund, and that said bond is issued by a reputable bonding company, includes
coverage for larceny and embezzlement, and is in an amount not less than $5
million. The Company agrees to make all reasonable efforts to see that this bond
or another bond containing these provisions is always in effect, and agrees to
notify the Fund and the Underwriter in the event that such coverage no longer
applies.
ARTICLE III. Prospectuses and Proxy Statements; Voting
-----------------------------------------
3.1. The Underwriter shall provide the Company with as many
printed copies of the Fund's current prospectus and Statement of Additional
Information as the Company may reasonably request. If requested by the Company
in lieu thereof, the Fund shall provide camera-ready film containing the Fund's
prospectus and Statement of Additional Information, and such other assistance as
is reasonably necessary in order for the Company once each year (or more
frequently if the prospectus and/or Statement of Additional Information for the
Fund is amended during the year) to have the prospectus for the Contracts and
the Fund's prospectus printed together in one document, and to have the
Statement of Additional Information for the Fund and the Statement of Additional
Information for the Contracts printed together in one document. Alternatively,
the Company may print the Fund's prospectus and/or its Statement of Additional
Information in combination with other fund companies' prospectuses and
statements of additional information. Except as provided in the following three
sentences, all expenses of printing and distributing Fund prospectuses and
Statements of Additional Information shall be the expense of the Company. For
prospectuses and Statements of Additional Information provided by the Company to
its existing owners of Contracts in order to update disclosure annually as
required by the 1933 Act and/or the 1940 Act, the cost of printing shall be
borne by the Fund. If the Company chooses to receive camera-ready film in lieu
of receiving printed copies of the Fund's prospectus, the Fund will reimburse
the Company in an amount equal to the product of A and B where A is the number
of such prospectuses distributed to owners of the Contracts, and B is the Fund's
per unit cost of typesetting and printing the Fund's prospectus. The same
procedures shall be followed with respect to the Fund's Statement of Additional
Information.
The Company agrees to provide the Fund or its designee with such
information as may be reasonably requested by the Fund to assure that the Fund's
expenses do not include the cost of printing any prospectuses or Statements of
Additional Information other than those actually distributed to existing owners
of the Contracts.
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3.2. The Fund's prospectus shall state that the Statement of
Additional Information for the Fund is available from the Underwriter or the
Company (or in the Fund's discretion, the Prospectus shall state that such
Statement is available from the Fund).
3.3. The Fund, at its expense, shall provide the Company with
copies of its proxy statements, reports to shareholders, and other
communications (except for prospectuses and Statements of Additional
Information, which are covered in Section 3.1) to shareholders in such quantity
as the Company shall reasonably require for distributing to Contract owners.
3.4. If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received in a particular separate account in the same
proportion as Fund shares of such portfolio for which
instructions have been received in that separate
account,
so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote Fund shares
held in any segregated asset account in its own right, to the extent permitted
by law. Participating Insurance Companies shall be responsible for assuring that
each of their separate accounts participating in the Fund calculates voting
privileges in a manner consistent with the standards set forth on Schedule B
attached hereto and incorporated herein by this reference, which standards will
also be provided to the other Participating Insurance Companies.
3.5. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will either provide
for annual meetings or comply with Section 16(c) of the 1940 Act (although the
Fund is not one of the trusts described in Section 16(c) of that Act) as well as
with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will
act in accordance with the Securities and Exchange Commission's interpretation
of the requirements of Section 16(a) with respect to periodic elections of
trustees and with whatever rules the Commission may promulgate with respect
thereto.
3.6 The Fund shall use its best efforts to notify the Company
of any proxy proposals for shareholders 60 (sixty) days prior to the appropriate
Board vote for such proposals.
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ARTICLE IV. Sales Material and Information
------------------------------
4.1. The Company shall furnish, or shall cause to be furnished,
to the Fund or its designee, each piece of sales literature or other promotional
material in which the Fund or its investment adviser or the Underwriter is
named, at least five Business Days prior to its use. No such material shall be
used if the Fund or its designee reasonably objects to such use within five
Business Days after receipt of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee or by the Underwriter, except with the permission of the Fund or the
Underwriter or the designee of either.
4.3. The Fund, Underwriter, or its designee shall furnish, or
shall cause to be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company and/or its
separate account(s), is named at least five Business Days prior to its use. No
such material shall be used if the Company or its designee reasonably objects to
such use within five Business Days after receipt of such material.
4.4. The Fund and the Underwriter shall not give any information
or make any representations on behalf of the Company or concerning the Company,
each Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete
copy of all registration statements, prospectuses, Statements of Additional
Information, reports, proxy statements, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Fund or its shares,
contemporaneously with the filing of such document with the Securities and
Exchange Commission or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete
copy of all registration statements, prospectuses, Statements of Additional
Information, reports, solicitations for voting instructions, sales literature
and other promotional materials, applications for exemptions, requests for no
action letters, and all amendments to any of the
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above, that relate to the Contracts or each Account, contemporaneously with the
filing of such document with the SEC or other regulatory authorities.
4.7. For purposes of this Article IV, the phrase "sales
literature or other promotional material" includes, but is not limited to, any
of the following that refer to the Fund or any affiliate of the Fund:
advertisements (such as material published, or designed for use in, a newspaper,
magazine, or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, or other public media),
sales literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements,
prospectuses, Statements of Additional Information, shareholder reports, and
proxy materials.
ARTICLE V. Fees and Expenses
-----------------
5.1. The Fund and Underwriter shall pay no fee or other
compensation to the Company under this agreement, except that if the Fund or any
Portfolio adopts and implements a plan pursuant to Rule 12b-1 to finance
distribution expenses, then the Underwriter may make payments to the Company or
to the underwriter for the Contracts if and in amounts agreed to by the
Underwriter in writing and such payments will be made out of existing fees
otherwise payable to the Underwriter, past profits of the Underwriter or other
resources available to the Underwriter. No such payments shall be made directly
by the Fund.
5.2. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or state law,
and all taxes on the issuance or transfer of the Fund's shares.
5.3. The Company shall bear the expenses of distributing the
Fund's prospectus, proxy materials and reports to owners of Contracts issued by
the Company.
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ARTICLE VI. Diversification
---------------
6.1. The Fund will at all times invest money from the Contracts
in such a manner as to ensure that the Contracts will be treated as variable
contracts under the Code and the regulations issued thereunder. Without limiting
the scope of the foregoing, the Fund will at all times comply with Section
817(h) of the Code and Treasury Regulation 1.817-5, relating to the
diversification requirements for variable annuity, endowment, or life insurance
contracts and any amendments or other modifications to such Section or
Regulations. In the event of a breach of this Article VI by the Fund, it will
take all reasonable steps (a) to notify Company of such breach and (b) to
adequately diversify the Fund so as to achieve compliance within the grace
period afforded by Regulation 1.817-5.
ARTICLE VII. Potential Conflicts
-------------------
7.1. The Board will monitor the Fund for the existence of any
material irreconcilable conflict between the interests of the contract owners of
all separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Board shall promptly inform the Company if
it determines that an irreconcilable material conflict exists and the
implications thereof.
7.2. The Company will report any potential or existing conflicts
of which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order, by providing
the Board with all information reasonably necessary for the Board to consider
any issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions are
disregarded.
7.3. If it is determined by a majority of the Board, or a
majority of its disinterested trustees, that a material irreconcilable conflict
exists, the Company and other Participating Insurance Companies shall, at their
expense and to the extent reasonably practicable (as determined by a majority of
the disinterested trustees), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such
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<PAGE>
segregation should be implemented to a vote of all affected Contract owners and,
as appropriate, segregating the assets of any appropriate group (i.e., annuity
contract owners, life insurance contract owners, or variable contract owners of
one or more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected contract owners the option of making
such a change; and (2), establishing a new registered management investment
company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect to
such Account; provided, however that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested members of the Board. Any such
withdrawal and termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented, and until the end
of that six month period the Underwriter and Fund shall continue to accept and
implement orders by the Company for the purchase (and redemption) of shares of
the Fund.
7.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the Company
conflicts with the majority of other state regulators, then the Company will
withdraw the affected Account's investment in the Fund and terminate this
Agreement with respect to such Account within six months after the Board informs
the Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board. Until the end of the foregoing six month period, the Underwriter
and Fund shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement,
a majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contracts if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination, provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
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7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision
of the Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies,
as appropriate, shall take such steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of
this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
---------------
8.1. Indemnification By The Company
------------------------------
8.1(a). The Company agrees to indemnify and hold harmless the
Fund and each trustee of the Board and officers and each person, if any, who
controls the Fund within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.1)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company) or litigation (including
legal and other expenses), to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements are related to the sale or acquisition of the Fund's shares or
the Contracts and:
(i) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact contained in
the Registration Statement or prospectus for the Contracts or
contained in the Contracts or sales literature for the Contracts
(or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Company by
or on behalf of the Fund for use in the Registration Statement
or prospectus for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the Registration Statement,
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<PAGE>
prospectus or sales literature of the Fund not supplied by the
Company, or persons under its control) or wrongful conduct of
the Company or persons under its control, with respect to the
sale or distribution of the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration
Statement, prospectus, or sales literature of the Fund or any
amendment thereof or supplement thereto or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance
upon information furnished to the Fund by or on behalf of the
Company; or
(iv) arise as a result of any failure by the Company to
provide the services and furnish the materials under the terms
of this Agreement; or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company, as limited by and in
accordance with the provisions of Sections 8.1(b) and 8.1(c)
hereof.
8.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation incurred or assessed against
an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations or
duties under this Agreement or to the Fund, whichever is
applicable.
8.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made against
an Indemnified Party unless such Indemnified Party shall have
notified the Company in writing within a reasonable time after
the summons or other first legal process giving information of
the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not
relieve the Company from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the
Company shall be entitled to participate, at its own expense, in
the defense of such action. The Company also shall be entitled
to assume the defense thereof, with counsel satisfactory to the
party
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<PAGE>
named in the action. After notice from the Company to such
party of the Company's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Company will not be
liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs
of investigation.
8.1(d). The Indemnified Parties will promptly notify the
Company of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of the Fund
Shares or the Contracts or the operation of the Fund.
8.2. Indemnification by the Underwriter
----------------------------------
8.2(a). The Underwriter agrees to indemnify and hold harmless
the Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Fund's shares or the
Contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained
in the Registration Statement or prospectus or sales
literature of the Fund (or any amendment or supplement
to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made
in reliance upon and in conformity with information
furnished to the Underwriter or Fund by or on behalf of
the Company for use in the Registration Statement or
prospectus for the Fund or in sales literature (or any
amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund
shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Registration
Statement, prospectus or sales literature for the
Contracts not supplied by the Underwriter or persons
under its control) or wrongful conduct of the
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<PAGE>
Fund, Adviser or Underwriter or persons under their
control, with respect to the sale or distribution of
the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a
Registration Statement, prospectus, or sales
literature covering the Contracts, or any amendment
thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make
the statement or statements therein not misleading,
if such statement or omission was made in reliance
upon information furnished to the Company by or on
behalf of the Fund; or
(iv) arise as a result of any failure by the Fund to
provide the services and furnish the materials under
the terms of this Agreement (including a failure,
whether unintentional or in good faith or otherwise,
to comply with the diversification requirements
specified in Article VI of this Agreement); or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the
Underwriter in this Agreement or arise out of or
result from any other material breach of this
Agreement by the Underwriter; as limited by and in
accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to each Company or the Account, whichever is applicable.
8.2(c). The Underwriter shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Underwriter in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the
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<PAGE>
Underwriter's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Underwriter will not be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.2(d). The Company agrees promptly to notify the Underwriter of
the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the Contracts
or the operation of each Account.
8.3. Indemnification By the Fund
---------------------------
8.3(a). The Fund agrees to indemnify and hold harmless the
Company, and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.3)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Fund) or litigation (including
legal and other expenses) to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
result from the gross negligence, bad faith or willful misconduct of the Board
or any member thereof, are related to the operations of the Fund and:
(i) arise as a result of any failure by the Fund to
provide the services and furnish the materials under
the terms of this Agreement (including a failure to
comply with the diversification requirements
specified in Article VI of this Agreement);or
(ii) arise out of or result from any material breach of
any representation and/or warranty made by the Fund
in this Agreement or arise out of or result from any
other material breach of this Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company, the Fund, the Underwriter or each Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall
142
<PAGE>
have notified the Fund in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated agent), but failure
to notify the Fund of any such claim shall not relieve the Fund from any
liability which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the Fund will be
entitled to participate, at its own expense, in the defense thereof. The Fund
also shall be entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action. After notice from the Fund to such party of
the Fund's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Fund will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.3(d). The Company and the Underwriter agree promptly to notify
the Fund of the commencement of any litigation or proceedings against it or any
of its respective officers or directors in connection with this Agreement, the
issuance or sale of the Contracts, with respect to the operation of either
Account, or the sale or acquisition of shares of the Fund.
ARTICLE IX. Applicable Law
--------------
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Securities and Exchange Commission may grant (including, but not limited to, the
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE X. Termination
-----------
10.1. This Agreement shall continue in full force and effect until
the first to occur of:
(a) termination by any party for any reason by one hundred
eighty (180) days advance written notice delivered to the
other parties; or
(b) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio based
upon the Company's
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<PAGE>
determination that shares of such Portfolio are not
reasonably available to meet the requirements of the
Contracts; or
(c) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio in the
event any of the Portfolio's shares are not registered,
issued or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares
as the underlying investment media of the Contracts issued
or to be issued by the Company; or
(d) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio in the
event that such Portfolio ceases to qualify as a Regulated
Investment Company under Subchapter M of the Code or under
any successor or similar provision, or if the Company
reasonably believes that the Fund may fail to so qualify;
or
(e) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio in the
event that such Portfolio fails to meet the
diversification requirements specified in Article VI
hereof; or
(f) termination by either the Fund or the Underwriter by
written notice to the Company, if either one or both of
the Fund or the Underwriter respectively, shall determine,
in their sole judgment exercised in good faith, that the
Company and/or its affiliated companies has suffered a
material adverse change in its business, operations,
financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity;
or
(g) termination by the Company by written notice to the Fund
and the Underwriter, if the Company shall determine, in
its sole judgment exercised in good faith, that either the
Fund or the Underwriter has suffered a material adverse
change in its business, operations, financial condition or
prospects since the date of this Agreement or is the
subject of material adverse publicity; or
(h) termination by the Fund or the Underwriter by written
notice to the Company, if the Company gives the Fund and
the Underwriter the written notice specified in Section
1.6(b) hereof and at the time such notice was given there
was no notice of termination outstanding under any other
provision of this Agreement; provided, however any
termination under this Section 10.1(h) shall be effective
one hundred eighty (180) days after the notice specified
in Section 1.6(b) was given.
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<PAGE>
10.2. Effect of Termination. Notwithstanding any termination of
---------------------
this Agreement, the Fund and the Underwriter shall at the option of the Company,
continue to make available additional shares of the Fund pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts. The parties agree that this
Section 10.2 shall not apply to any terminations under Article VII and the
effect of such Article VII terminations shall be governed by Article VII of this
Agreement.
10.3 The Company shall not redeem Fund shares attributable to
the Contracts (as opposed to Fund shares attributable to the Company's assets
held in the Account) except (i) as necessary to implement Contract Owner
initiated or approved transactions, or (ii) as required by state and/or federal
laws or regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Fund and the Underwriter the
opinion of counsel for the Company (which counsel shall be reasonably
satisfactory to the Fund and the Underwriter) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption. Furthermore,
except in cases where permitted under the terms of the Contracts, the Company
shall not prevent Contract Owners from allocating payments to a Portfolio that
was otherwise available under the Contracts without first giving the Fund or the
Underwriter 90 days notice of its intention to do so.
ARTICLE XI. Notices
-------
Any notice shall be sufficiently given when sent by registered
or certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
If to the Fund:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
If to the Company:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111-0001
Attention: Office of General Counsel
If to the Underwriter:
82 Devonshire Street
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<PAGE>
Boston, Massachusetts 02109
Attention: Treasurer
ARTICLE XII. Miscellaneous
-------------
12.1 All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Board, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.
12.3 The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one and the
same instrument.
12.5 If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
12.6 Each party hereto shall cooperate with each other party and
all appropriate governmental authorities (including without limitation the SEC,
the NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the California Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the insurance operations
of the Company are being conducted in a manner consistent with the California
Insurance Regulations and any other applicable law or regulations.
12.7 The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
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<PAGE>
12.8. This Agreement or any of the rights and obligations
hereunder may not be assigned by any party without the prior written consent of
all parties hereto; provided, however, that the Underwriter may assign this
Agreement or any rights or obligations hereunder to any affiliate of or company
under common control with the Underwriter, if such assignee is duly licensed and
registered to perform the obligations of the Underwriter under this Agreement.
The Company shall promptly notify the Fund and the Underwriter of any change in
control of the Company.
12.9. The Company shall furnish, or shall cause to be furnished,
to the Fund or its designee copies of the following reports:
(a) the Company's annual statement (prepared under
statutory accounting principles) and annual report
(prepared under generally accepted accounting
principles ("GAAP"), if any), as soon as practical
and in any event within 90 days after the end of
each fiscal year;
(b) the Company's quarterly statements (statutory)
(and GAAP, if any), as soon as practical and in
any event within 45 days after the end of each
quarterly period:
(c) any financial statement, proxy statement, notice
or report of the Company sent policyholders, as
soon as commercially reasonable after the delivery
thereof to stockholders;
(d) any registration statement (without exhibits)
filed on behalf of the Company pursuant to any
securities offering related to a reorganization of
the Company and any associated financial reports
of the Company filed with the Securities and
Exchange Commission or any extraordinary financial
reports filed with any state insurance regulator,
as soon as commercially reasonable after the
filing thereof;
(e) any other report submitted to the Company by
independent accountants in connection with any
annual, interim or special audit made by them of
the books of the Company, as soon as practical
after the receipt thereof, but nothing in this
subsection (e) shall require the Company to
disclose any information not otherwise available
to the public.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By:
----------------------
Name:
----------------------
Title:
----------------------
VARIABLE INSURANCE PRODUCTS FUND II
By:
----------------------
Robert C. Pozen
Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
By:
----------------------
Kevin J. Kelly
Vice President
148
<PAGE>
EXHIBIT 1(A)(10)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
APPLICATION NO. PAGE 1
APPLICATION (PART 1A)
<S> <C>
To: [_] Massachusetts Mutual Life Insurance Company [_] MML Bay State Life Insurance Company
Home and Principal Administrative Office: Principal Administrative Office:
Springfield, Massachusetts 01111-0001 Springfield, Massachusetts 01111-0001
</TABLE>
[_] C.M. Life Insurance Company
Principal Administrative Office:
Springfield, Massachusetts 01111-0001
The words "we," and "our" refer to the life insurance company specified above.
<TABLE>
<S> <C>
Underwriting Method: [_] Guaranteed Issue [_] Simplified Issue [_] Full Underwriting
Owner Data
1. Owner a. [_] Employer d. [_] As indicated on Part 1B
(Check one only) b. [_] Proposed Insured (Include Census) e. [_] Other (Give full name, address and Taxpayer ID No)
c. [_] Trust (Give name of Trust, Address and Trust Taxpayer ID No)
2. Owner Name(s):
--------------------------------------------------------------------------------------------------------
a. Name of Trustee(s) (if applicable)
-----------------------------------------------------------------------------------
b. Date of Trust (if applicable)
----------------------------
3. Owner Address:
Street & No. City State Zip
4. Taxpayer ID No.: 5. Nature of Business
-------------------------------------- -------------------------------------
Program Sponsor Data (If different than owner)
6. Name(s):
--------------------------------------------------------------------------------------------------------------
7. Program Sponsor Address:
Street & No. City State Zip
8. Primary Contact (include name and telephone number):
------------------------------------------------------------------
9. Taxpayer ID No.: 10. Nature of Business
-------------------------------------- --------------------------------------
Proposed Insured Data
11. Proposed Insured: as indicated on Part 1B.
12. Have all eligible participants been Actively at Work prior to their participation in the program for the Employer
or its affiliate(s)? "Actively at Work" means working full time at a rate of at least 30 hours per week with no
hospitalization, and no absence due to illness or accident of more than 3 days, during the preceding 3 months.
[_] Yes [_] No If "No," give detailed explanation in Remarks.
Life Insurance Data (Please check ( ) on the appropriate line if you desire the specified feature.)
13. Permanent Plan (select one):
[_] Flexible Premium Variable Adjustable Life Insurance ( ) Indicate Product
---------------------------------------------
[_] Flexible Premium Adjustable Life Insurance ( ) Indicate Product
------------------------------------------------------
[_] Flexible Premium Whole Life Insurance with Table of Selected Face Amounts ( )
--------------------------------
Indicate Product
[_] Flexible Premium Variable Whole Life Insurance with Table of Selected Face Amounts ( )
-------------------------
Indicate Product
[_] Other ( ) Indicate Product
----------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
APPLICATION NO. PAGE 1
- --------------------------------------------------------------------------------
14. DEATH BENEFIT OPTION
[_] Option 1 - Selected Face Amount
[_] Option 2 - Selected Face amount plus Account Value
[_] Option 3 - Selected Face Amount plus Sum of Premiums Paid
(if applicable)
15. RIDER OPTIONS (if applicable):
a. [_] Term Rider: 1. [_] Yes [_] No
2. [_] As indicated on Part 1B
IF "YES" COMPLETE ONE OF THE FOLLOWING:
---
TERM RIDER SELECTED FACE AMOUNT $
------------------------
or
PERCENTAGE OF TOTAL SELECTED FACE AMOUNT
-----------------%
b. [_] Waiver of Monthly 1. [_] Yes [_] No
Charges Rider
2. [_] As indicated on Part 1B
(Full underwriting only)
16. Endorsement Election: [_] Alternate Cash Surrender Valuye Benefit
Endorsement (Home Office Approval Required)
17. Loan Interest Rate: [_] Adjustable [_] 6% Fixed
18. Definition of Life Insurance Test
[_] Cash Value Accumulation Test [_] Guideline Premium Test
(if applicable)
19. INITIAL POLICY DATE ---------- ---------- ----------
mo. day year
20. PREMIUM AMOUNTS (if applicable):
<TABLE>
<S> <C> <C>
(a) Initial Premium paid with Application $ (Allocated among all indureds as
--------------------------- indicated in 20c.)
(b) Planned Annual Premium for: Policy year one $
---------------------------
Pollicy year two $
---------------------------
Policy year three $
---------------------------
Policy year four $
---------------------------
Policy year five $
---------------------------
(c) Method of premium allocation to each policy.
</TABLE>
21. DIVIDEND OPTION (if applicable):
[_] Cash [_] Accumulations [_] Reduce Premium [_] Paid-Up Additions
Dividends will be applied as Paid-Up Additions if no option is elected.
22. The policies applied for will be uded in conjuction with an employer-
sponsored program involving both males and females. All policies will be
issued on a sex-distinct basis unless checked here for unisex basis.
[_] Unisex Basis
(Home Office Approval
Required)
- --------------------------------------------------------------------------------
<PAGE>
APPLICATION NO. PAGE 3
- --------------------------------------------------------------------------------
23. Beneficiary:
a. [_] Employer
If the Employer is the beneficiary, the Employer certifies,
represents and warrants that
(i) The Employer has a lawful and substantial economic interest in
the life, health and bodily safety of each Proposed Insured; and
(ii) The Services of each such Proposed Insured are such that the
Employer expects to realize either:
. A substantial pecuniary gain through the continued life of
the Proposed Insured; or
. A substantial pecuniary loss in the event of the Proposed
Insured's death.
b. [_] As designated by Proposed Insured on Application (Part 1B)
c. [_] Owner (if other than Proposed Insured)
d. [_] See memo attached
If two or more persons are the beneficiaries in any class, payment shall be made
equally to them or equally to the surviving beneficiaries in that class unless
otherwise requested. If percentages or fractions are indicated and any
beneficiary dies before the Proposed Insured, any share due that beneficiary
will be paid proportionately to the surviving beneficiaries in that class. If
payment is made in one sum and other is no beneficiary entitled to payment when
the Proposed Insured dies and the Proposed Insured is the Owner at that time,
payment shall be made to the estate of the Proposed Insured; but if the Proposed
Insured is not the Owner, payments shall be made to the Owner:
24. Will the insurance now being applied for replace or change, or is it
intended to replace or change, any insurance or annuity, in whole or in
part, issued by this or any other company? [_] Yes [_] No
If "Yes," give company name, policy number, amount and plans in remarks.
Payment Data
25. Premium and Other Notices:
"I hereby designate (check one only) as my attorney in fact to receive all
premium and other notices on my behalf"
[_] Program Sponsor [_] Producer [_] Other
If "Other," enter name and address
------------------------------------------
If no option is elected, all premium and other notices will be sent to the
Owner.
26. Remarks:
- --------------------------------------------------------------------------------
<PAGE>
APPLICATION NO. PAGE 4
- --------------------------------------------------------------------------------
27. Complete the following if applicable: (variable life products)
Has the owner received an Offering Memorandum or a Prospectus
for the policy(ies) being applied for? [_] Yes [_] No
If "Yes," give date shown on the Offering Memorandum
or Prospectus:
---------------------------
Does the Owner understand that:
. The death benefit and the duration of insurance may be
variable or fixed under specified conditions? [_] Yes [_] No
. The variable account value of the policy may increase or
decrease in accordance with the experience of the Separate
Account (there are no minimum guarantees as to the variable
account value)? [_] Yes [_] No
. The fixed account value of the policy earns interest at a
rate no less than a minimum specified rate? [_] Yes [_] No
In view of the above, does the Owner believe that this policy
will meet his/her insurance needs and financial objectives? [_] Yes [_] No
The person(s) signing below acknowledge and agree that:
THE APPLICATION - This is part of an application for permanent life insurance.
The application includes this Part 1A and its attached Census and Table of
Temporary Insurance Rates, the Part 1B (which has been or which will be
completed by the Proposed Insured), any Part 2 that may be required, and any
amendments or supplements to either Part. To the best of the knowledge and
belief of the person(s) signing below, all statements in this application are
complete and true and were truly recorded. Each person signing below adopts all
the statements made in the application and agrees to be bound by them. This
Application (Part 1A) is valid until withdrawn by the Owner by written notice to
us at our Home Office. Withdrawal of this Application (Part 1A) shall not
necessarily affect its use with applications submitted prior to the date we
receive such notice.
AUTHORITY OF AGENTS - No agent can change the terms of this application or any
policy, contract or certificate issued by us. No agent can waive any of our
rights or requirements, or extend any time for payment.
CHANGES AND CORRECTIONS - Any change or correction of the application will be
shown on an Amendment of Application attached to the policy, contract or
certificate. Acceptance of any policy, contract or certificate of coverage
issued shall be acceptance of any change or correction of the application we
made. However, unless otherwise indicated in this application, any correction
or change of amount, classification, plan of issuance or riders must be agreed
to in writing.
TAXPAYER IDENTIFICATION (APPLIES ONLY IF THE EMPLOYER IS THE OWNER) - The Owner
certifies, under penalties of perjury, that: (i) the number referred to in No. 4
of this Application (Part 1A) is the correct Taxpayer Identification Number (or
the Employer is waiting for a number to be issued): and (ii) the Owner is not
subject to backup withholding either because the Internal Revenue Service (IRS)
has not notified the Owner that the Owner is subject to backup withholding as a
result of a failure to report all interest or dividends, or because the IRS has
notified the Owner of termination of backup withholding, If the IRS has notified
said Owner that he/she is subject to backup withholding and he/she has not
received notice from the IRS that backup withholding has terminated, he/she is
not subject to backup withholding due to notified payee underreporting.
Any person who knowingly presents a false or fraudulent claim for payment of a
loss or benefit or knowingly presents false information in an application for
insurance may be guilty of a crime and may be subject to fines and confinement
in prison.
- --------------------------------------------------------------------------------
For the Owner/Program Sponsor:
- ------------------------------------- -----------------------------------
Print Name and Title of Persons Signature of Authorized Person
to Sign for the Owner/Program Sponsor
- --------------------------------------------------------------------------------
Signed at on
------------------------------------------------ ------------------
City State Date
- --------------------------------------------------------------------------------
- -------------------------------------- ------------------------------------
General Agent Submitting Application Signature of Soliciting Producer
- --------------------------------------------------------------------------------
<PAGE>
TEMPORARY LIFE INSURANCE AGREEMENT
<TABLE>
<S> <C>
TO: [_] MASSACHUSETTS MUTUAL LIFE INSURANCE CO. [_] MML BAY STATE LIFE INSURANCE CO.
HOME AND PRINCIPAL ADMINISTRATIVE OFFICE: PRINCIPAL ADMINISTRATIVE OFFICE:
SPRINGFIELD, MASSACHUSETTS 01111-0001 SPRINGFIELD, MASSACHUSETTS 01111-0001
[_] C.M. LIFE INSURANCE CO.
PRINCIPAL ADMINISTRATIVE OFFICE:
SPRINGFIELD, MASSACHUSETTS 01111-0001
</TABLE>
The words "we," and "our" refer to the life insurance company specified above.
Underwriting Method: [_] Guaranteed Issue Only
- --------------------------------------------------------------------------------
1. Owner/Program Sponsor Name
- --------------------------------------------------------------------------------
Owner Address:
-
- --------------------------------------------------------------------------------
street & no. city state zip
2. The Owner/Program Sponsor applies for temporary life insurance on the life of
each Proposed Insured listed in the attached census: [_] Yes [_] No
If "No," the following provisions of this section do not apply.
3. The Effective date of the temporary insurance is the latest of:
(i) The date we receive from the Owner/Program Sponsor an amount of
premium equal to one-forth of the sum of the minimum initial premiums
("temporary insurance premium") for the policies applied for;
(ii) The date of the Application (Part 1A) is signed by one of our
Officers; or
(iii) The date chosen by the Owner/Program Sponsor (please specify date).
----- ----- ----------
Mo Dy Yr
During the temporary insurance period, the amount of premium received in excess
of the temporary insurance premium will be held in a suspense account. Not
interest will be credited on any amounts submitted and held in the suspense
account.
4. The amount of temporary insurance on the life of each Proposed Insured is:
[_] The Selected Face Amount and any Supplemental Monthly Term Insurance
Rider (if applicable) as shown in the census; or
[_] Other - (Provide formula)
---------------------------------------------
In no event however, may the amount of temporary insurance be greater than our
Guaranteed Issue limits.
5. Any temporary insurance on the life of a Proposed Insured will terminate at
the earliest of:
(i) The date the permanent life insurance applied for in this application
takes effect on the life of that Proposed Insured:
(ii) The date that Proposed Insured fails to meet any requirements to
qualify for the permanent insurance applied for:
(iii) The date 90 days after the effective date of the temporary insurance:
or
(iv) The date the Owner/Program Sponsor's written notice of termination of
the insurance is received by us at our Principal Administrative Office.
Temporary Insurance Beneficiary Designation:
------------------------------------
- --------------------------------------------------------------------------------
If the temporary insurance on the life of a Proposed Insured terminates for the
reason specified above in 5(i), the amount of premium paid with this Application
that was allocated to the policy on the life of that Proposed Insured will be
applied as premiums under that permanent life insurance policy. If the temporary
insurance on the life of a Proposed Insured terminated for any other reason, we
will refund the amount of premium paid with this Application that was allocated
to the policy on the life of that Proposed Insured less a mortality charge. This
mortality charge will be for the period from the effective date of the temporary
insurance to, but not including, the termination date. The mortality charge for
that Proposed Insured will be based on the amount of temporary insurance on the
Proposed Insured's life, and the term rate from the attached Table of Temporary
Insurance Rates for the Proposed Insured's age. Any unearned mortality charges
as of the termination date will be refunded. We will also pay interest at the
rate paid under Option D as of the termination date on any temporary insurance
premium amounts remaining after termination.
- --------------------------------------------------------------------------------
<PAGE>
APPLICATION NO. PAGE 6
- --------------------------------------------------------------------------------
Acknowledgement and Signature
The person(s) signing below acknowledge and agree that:
The Application - This is part of an application for permanent life insurance.
The application includes a Part 1A and its attached Census and Table of
Temporary Insurance Rates, the Part 1B (which has been or which will be
completed by the Proposed Insured), any Part 2 that may be required, and any
amendments or supplements to either Part. To the best of the knowledge and
belief of the person(s) signing below, all statements in this application are
complete and true and were truly recorded. Each person signing below adopts all
the statements made in the application and agrees to be bound by them. This
supplements is valid until withdrawn by the Owner by written notice to us at our
Home Office. Withdrawal of this Application (Part 1A) shall not necessarily
affect its use with applications submitted prior to the date we receive such
notice.
Our Liability - A minimum amount of premium may be paid to the agent in exchange
for temporary life insurance as discussed in this Temporary Insurance Agreement.
If this is done, we shall be liable only as set forth in that Agreement. If that
amount of premium is not paid, we shall have no liability unless and until:
- The application has been approved by us at our Principal Administrative
Office; and
- The first premium has been paid during the lifetime of the Proposed
Insured; and
- The Proposed Insured is actively working during the 90 days prior to their
participation in the program for the Employer or its affiliate(s); and
- The policy, contract or certificate of coverage has been delivered to the
person named as Owner in the certificate; and
- At the time of payment and delivery, all statements in the application
which ar material to the risk are complete and true as though they were
made at that time.
If any of these conditions are not met, the policy, contract or certificate of
coverage and rider(s) applied for shall not take effect.
Authority of Agents - No agent can change the terms of this application or any
policy, contract or certificate issued by us. No agent can waive any of our
rights or requirements, or extend any time for payment.
Any person who knowingly presents a false or fraudulent claim for payment of a
loss or benefit or knowingly presents false information in an application for
insurance may be guilty of a crime and may be subject to fines and confinement
in prison.
- --------------------------------------------------------------------------------
For the Owner/Program Sponsor:
- ------------------------------------- ------------------------------------
Print Name and Tiele of Person Signature of Authorized Person
Authorized to Sign for the
Owner/Program Sponsor
- --------------------------------------------------------------------------------
Signed at On
------------------------------------------------------ -----------
City State Date
For the Life Insurance Cojpany specified above
(if temporary insurance applied for):
- ------------------------------------- ------------------------------------
Print Name and Title of Officer Signature of Soliciting Producer
Authorized to Sign for Life
Insurance Company
- --------------------------------------------------------------------------------
- ------------------------------------- ------------------------------------
General Agent Submitting Application Signature of Soliciting Producer
<PAGE>
<TABLE>
<CAPTION>
APPLICATION NO. PAGE 7
- -------------------------------------------------------------------------------------------------------------------------
APPLICATION (PART 1B)
<S> <C>
To: [_] Massachusetts Mutual Life Insurance Company [_] MML Bay State Life Insurance Company
Home and Principal Administrative Office: Principal Administrative Office:
Springfield, Massachusetts 01111-0001 Springfield, Massachusetts 01111-0001
[_] C.M. Life Insurance Company
Principal Administrative Office:
Springfield, Massachusetts 01111-0001
The words "we," and "our" refer to the life insurance company specified above.
Underwriting Method: [_] Guaranteed Issue (Complete Section 1 Only)
[_] Simplified Issue (Complete Sections 1, 2&3) [_] Full Underwriting (complete Sections 1&2 Only)
Owner Data
SECTION 1
1. The Application consists of the Part 1B and Part 1A No.
---------------------------------------------------------------
2. Owner Name (Complete only if question 1d, is checked on application Part 1A)
- --------------------------------------------------------------------------------------------------------------------------
2a. Name of Trustee(s) (if applicable) b. Date of Trust (if applicable)
-------------------------------- ------------------
3. Owner Address:
Street & No. City State Zip
3a. Owner's Tax ID Number/Social Security Number
--------------------------------------
4. Program Sponsor Name (If applicable, no address needed):
Proposed Insured Data
5. Proposed Insured's Name (Last, First, MI):
Last First MI
6. Proposed Insured's Home Address:
Street & No. City State Zip
- --------------------------------------------------------------------------------------------------------------------------
7. Date of Birth: 8. Social Security No.
Mo Day Yr
9. Sex: [_] Male [_] Female
10. Citizenship, if not USA: Type of Visa: [_] Permanent [_] Temporary
11. Business Address:
Street & No. City State Zip
12. Policy Date
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
APPLICATION NO. PAGE 2
- --------------------------------------------------------------------------------
13. a. Has the Proposed Insured been Actively at Work prior to their
participation in the plan for the Employer or its affiliate(s)?
"Actively at Work" means working full time at a rate of at least 30
hours per week with no hospitalization, and no absence due to illness or
accident of more than 5 days, during the preceding 3 months.
[_] Yes [_] No If "No," give detailed explanation in
Remarks.
b. Is the proposed Insured receiving or applying to receive disability
benefits?
[_] Yes [_] No If "Yes," give detailed explanation in
Remarks.
c. Has the Proposed Insured smoked cigarettes in the last 12 months?
[_] Yes [_] No
d. If "No," has the Proposed Insured used tobacco or nicotine in any other
form during the past 12 months?
[_] Yes [_] No
- --------------------------------------------------------------------------------
LIFE INSURANCE INFORMATION
- --------------------------------------------------------------------------------
14. Selected Face Amounts (SFA)
a. Initial $
----------------------
b. Subsequent (if applicable) - A pattern of SFA's may be elected here
subject to current issue limits. The SFA for the last Policy Year shown
will apply to all later Policy Years. If no SFA is elected here, the
Initial SFA will apply to all Policy Years.
<TABLE>
<CAPTION>
Policy Year to and including Policy Year Alternatives
<S> <C> <C>
-------------------------> Increase by % per year [_]
----------------- -----------------
Increase by $ per year
-----------------
-------------------------> Increase by % per year [_] Remain Level
-----------------
Increase by $ per year [_]
----------------- -----------------
</TABLE>
c. Term Rider Option (Complete if question 15a (2) is completed on
application Part 1A)
[_] Yes [_] No If "Yes" complete one of the following:
Term Rider Selected Face Amount $ or
------------------
Percentage of Total Selected Face Amount %
---------------
15. First premium paid with application $
-------------------------
Planned annual premium for year $
-------------------------
16. Beneficiary: (Complete only if question 23b is checked on application
Part 1A).
(for all beneficiaries, print full name(s) and relationship(s) to the
Proposed Insured).
Death benefit proceeds will be paid in one sum unless otherwise requested.
(a) Primary
------------------------------------------------------------
SS#
---------------------------------
(b) Secondary (optional)
-------------------------------------------------
SS#
---------------------------------
(c) Tertiary (optional)
---------------------------------------------------
SS#
---------------------------------
If two or more persons are the beneficiaries in any class. payment
shall be equally to them or equally to the surviving beneficiaries in that class
unless otherwise requested. If percentages or fractions are indicated and any
beneficiary dies before the Proposed Insured, any share due to that beneficiary
will be paid proportionately to the surviving beneficiaries in that class. If
payment is made in one sum and there is no beneficiary entitled to payment when
the Proposed Insured dies and the Proposed Insured is the Owner at that time,
payment shall be made to the estate of the Proposed Insured; but if the Proposed
Insured is not the Owner, payment shall be made to the Owner.
- --------------------------------------------------------------------------------
<PAGE>
APPLICATION NO. PAGE 9
- --------------------------------------------------------------------------------
Underwriting Data
SECTION 2
17. Amount of insurance currently applied for, or now in force, on the Proposed
Insured in other companies.
If none, check here[_].
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
Amount of Year
Accidental Death Waiver of of or Currently
Company Name Face Amount Benefit Premium Issue Applied for (X)
---------------------------------------------------------------------------------------------------------------------
[_] Yes [_] No
---------------------------------------------------------------------------------------------------------------------
[_] Yes [_] No
---------------------------------------------------------------------------------------------------------------------
<S> <C>
18. What is your Occupation(s) and Exact Duties?
Occupation(s) Exact Duties
</TABLE>
Please Submit Completed Medical Form along with a Medical Information
Bureau authorization form, if Full Underwriting is selected.
19. Waiver or Monthly charges Rider Option (Complete if question 15b(2) is
completed on application Part 1A)
[_] Yes [_] No
- --------------------------------------------------------------------------------
SECTION 3
20. Have you ever been treated for, or been diagnosed by a member of the
medical profession as having, a deficiency of the immune system such as
acquired immune deficiency syndrome (AIDS) or AIDS related complex (ARC)?
[_] Yes [_] No
21. Have you ever consulted or been treated by a physician for cancer or
disease of the heart? [_] Yes [_] No
22. Have you applied for life insurance and been declined or postponed in the
last 5 years? [_] Yes [_] No
If "Yes," answers given in 20, 21, or 22 give details in Remarks.
23. Remarks
- --------------------------------------------------------------------------------
<PAGE>
APPLICATION NO. PAGE 10
- --------------------------------------------------------------------------------
Agreement and Signature
24. Complete the following if applicable:
Has the Owner received an Offering Memorandum or a Prospectus for the
policy(ies) being applied for? [_] Yes [_] No
If "Yes," give date shown on the Offering Memorandum or Prospectus:
---------
Does the Owner understand that:
. The death benefit and the duration of insurance may be variable or fixed
under specified conditions? [_] Yes [_] No
. The variable account value of the policy may increase or decrease in
accordance with the experience of the Separate Account (there are no
minimum guarantees as to the variable account value)? [_] Yes [_] No
. The fixed account value of the policy earns interest at a rate no less
than a minimum specified rate? [_] Yes [_] No
In vies of the above, does the Owner believe that this policy will meet his/her
insurance needs and financial objectives? [_] Yes [_] No
- --------------------------------------------------------------------------------
To the best of my knowledge and belief, all answers and statements are full,
complete and true and were correctly recorded. before I signed my name below.
AUTHORIZATION TO OBTAIN AND DISCLOSE INFORMATION - I have received the Notice
regarding the Medical Information Bureau, Inc. and the Fair Credit Reporting
Act. I understand that an investigative consumer report may be made regarding my
character, general reputation, personal characteristics and mode of living, and
authorize that report to be made. I hereby authorize any licensed physician,
medical practitioner, hospital, clinic, other medical or medically related
facility, insurance company, the Medical Information Bureau, Inc., or other
organization that has any records or knowledge of me and my health, to make such
information available to the life insurance company or its reinsurers. A copy of
this authorization shall be as valid as the original. (This authorization is
only valid where permitted by state law.)
TAXPAYER IDENTIFICATION (APPLIES ONLY IF PROPOSED INSURED IS OWNER) - The
Proposed Insured herein certifies, under penalties of perjury, that (1) the
number referred to in no. 4 of this Part 1B is his/her correct Taxpayer
Identification Number (or he/she is waiting for a number to be issued); and (ii)
he/she is not subject to backup withholding either because he/she has not been
notified by the Internal Revenue Service (IRS) that he/she is subject to backup
withholding as a result of a failure to report all interest or dividends, or
because the IRS has notified him/her that he/she is no longer subject to backup
withholding. If the IRS has notified the Proposed Insured that he/she is subject
to backup withholding and he/she has not received notice from the IRS that
backup withholding has terminated, he/she should strike out language above in
(ii) that he/she is not subject to backup withholding due to notified payee
underreporting.
Any person who knowingly presents a false or fraudulent claim for payment of a
loss or benefit or knowingly presents false information in an application for
insurance may be guilty of a crime and may be subject to fines an confinement in
prison.
- ------------------------------------- ------------------------------------
Signature of Proposed Insured Signature of Soliciting
Producer/Registered Representative
- ---------------------------------------
Signature of Owner (only if question 1d,
is checked on Application Part 1A)
signed at On
------------------------------------------ ------------------------
City State Date
- --------------------------------------------------------------------------------
<PAGE>
APPLICATION NO. PAGE 11
- --------------------------------------------------------------------------------
CONSENT FORM (PART 1B)
<TABLE>
<S> <C>
To: [_] Massachusetts Mutual Life Insurance Company [_] MML Bay State Life Insurance Company
Home and Principal Administrative Office: Principal Administrative Office:
Springfield, Massachusetts 01111-0001 Springfield, Massachusetts 01111-0001
</TABLE>
[_] C.M. Life Insurance Company
Principal Administrative Office:
Springfield, Massachusetts 01111-0001
The words "we," and "our" refer to the life insurance company specified above.
Underwriting Method: [_] Guaranteed Issue Only
- --------------------------------------------------------------------------------
1. Your Name
First Last MI
- --------------------------------------------------------------------------------
2. Your Home Address:
Street & No. City State Zip
- --------------------------------------------------------------------------------
3. Name of Employer
- --------------------------------------------------------------------------------
4. Please check one:
a. [_] Yes, I consent to my employer purchasing a life insurance policy on my
life. I agree and understand that:
. The employer will pay all the premiums, have all the rights of
ownership, and be the sole beneficiary of the policy. I agree that my
administrators, estate, heirs and assigns have no rights to any policy
proceeds; and
. The employer or their successors will continue to be the owner and
beneficiary of the policy(ies) after the end of my employment with the
employer or its successors.
b. [_] No. I do not consent to my employer purchasing a life insurance policy
on my life.
5. Have you been actively at work prior to their participation in the plan for
the Employer or its affiliate(s)? "Actively at Work" means working full time
at a rate of at least 30 hours per week with no hospitalization, and no
absence due to illness or accident of more than 5 days, during the preceding
3 months. [_] Yes [_] No If "No," explain in Remarks.
6. Are you receiving or applying to receive disability benefits?
[_] Yes [_] No If "No," explain in Remarks.
7. Have you smoked cigarettes in the last 12 months? [_] Yes [_] No
If "No," have you used tobacco or nicotine in any other form during the past
12 months? [_] Yes [_] No
Please complete the following information:
8. Sex: [_] Male [_] Female
9. Date of Birth: 10. Social Security No.
---- ----- ---- ------------------
Mo Day Yr
11. Proposed Insured's Signature Required
--------------------------------- --------------------------------
Proposed Insured's Signature Date
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 2
Opinion and Consent of Lynn S. Mercier
[LETTERHEAD OF MASSMUTUAL APPEARS HERE]
October 16, 1998
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
RE: Registration Statement filed on Form S-6
Ladies and Gentlemen:
This opinion is furnished in connection with the filing of the initial
Registration Statement under the Securities Act of 1933 for Massachusetts Mutual
Life Insurance Company's ("MassMutual") Flexible Premium Variable Adjustable
Life Insurance Policy (the "Policy"). Massachusetts Mutual Variable Life
Separate Account I issues the Policy.
As Attorney for MassMutual, I provide legal advice to MassMutual in connection
with the operation of its variable products. In such role I am familiar with the
Registration Statement for the Policy. In so acting, I have made such
examination of the law and examined such records and documents as in my judgment
are necessary or appropriate to enable me to render the opinion expressed below.
I am of the following opinion:
1. MassMutual is a valid and subsisting corporation, organized and operated
under the laws of the Commonwealth of Massachusetts and is subject to regulation
by the Massachusetts Commissioner of Insurance.
2. Massachusetts Mutual Variable Life Separate Account I is a separate account
validly established and maintained by MassMutual in accordance with
Massachusetts law.
3. All of the prescribed corporate procedures for the issuance of the Policy
have been followed, and all applicable state laws have been complied with.
I hereby consent to the use of this opinion as an exhibit to this Registration
Statement.
Very truly yours,
/s/ Lynn S. Mercier
- -------------------
Lynn S. Mercier
Attorney
150
