<PAGE>
As filed with the Securities and Exchange Commission on February 6, 1998
Securities Act File No. 33-73824
Investment Company Act File No. 811-8274
================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [_]
PRE-EFFECTIVE-AMENDMENT NO. [_]
POST-EFFECTIVE-AMENDMENT NO. 7
[X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [_]
AMENDMENT NO. 9
[X]
MASSMUTUAL INSTITUTIONAL FUNDS
------------------------------
(Exact Name of Registrant as Specified in Charter)
1295 State Street
Springfield, Massachusetts 01111
--------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (413) 788-8411
--------------
Stephen L. Kuhn
MassMutual Institutional Funds
1295 State Street
Springfield, MA 01111
(Name and Address of Agent for Service)
Copies to:
J. B. Kittredge Esq.
Ropes & Gray
One International Place
Boston, MA 02110
Approximate date of commencement of proposed sale to the public: As soon as
practical after the effective date of the Registration Statement.
It is proposed that this filing will become effective (check appropriate box)
[_] immediately upon filing pursuant to paragraph (b)
[X] on February 9, 1998 pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph (a)(1)
[_] 75 days after filing pursuant to paragraph (a)(2)
[_] on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[_] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Master Investment Portfolio has also executed this Registration Statement
DECLARATION PURSUANT TO RULE 24F-2
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant hereby declares that an indefinite number or amount of its shares
have been registered under the Securities Act of 1933. Registrant's Rule 24f-2
Notice on Form 24F-2 for the fiscal year ending December 31, 1996 was filed on
February 25, 1997.
The Index of Exhibits is located at Page 1 of Part C of Item 24(b).
To: The Securities and Exchange Commission
The Registrant submits this Post-Effective Amendment No. 7 to its
Registration Statement under the Securities Act of 1933 (Registration No.
33-73824) and this Amendment No. 9 to its Registration Statement under the
Investment Company Act of 1940 (Registration No. 811-8274). This Post-Effective
Amendment relates solely to the MassMutual Indexed Equity Fund. No information
relating to any other series of Registrant is amended or superseded hereby.
<PAGE>
MASSMUTUAL INSTITUTIONAL FUNDS
FORM N-1A
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Part A
Item No. Prospectus Heading
- -------- ------------------
<S> <C> <C>
1 Cover Page Cover Page
2 Synopsis Expense Information
3 Condensed Financial Information Not Applicable
4 General Description of Registrant The Trust; Investment Practices of the Fund and Related Risks; Investment
Objective and Policies of the Fund; Description of Shares; Appendix -
Additional Investment Policies
5 Management of the Fund The Trust; Master/Feeder Structure; Management of the Trust;
Expense Information
5A Management's Discussion of Fund
Performance Not Applicable
6 Capital Stock and Other Securities The Trust; Distributions And Taxation; Master/Feeder Structure; Description
Of Shares
7 Purchase of Securities Being Offered How To Purchase, Exchange, and Redeem Shares; Management of the Trust;
How Fund Shares Are Priced
8 Redemption or Repurchase How to Purchase, Exchange, And Redeem Shares
9 Pending Legal Proceedings Not Applicable
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
Part B Heading in Statement
Item No. of Additional Information
- -------- -------------------------
<S> <C> <C>
10 Cover Page Cover Page
11 Table of Contents Table of Contents
12 General Information and History General Information
13 Investment Objectives and Policies Additional Investment Policies; Fundamental Investment
Restrictions of the Fund; Non-Fundamental Investment Restrictions of
the Fund; Fundamental Investment Restrictions of the Master
Portfolio; Non-Fundamental Investment Restrictions of the Master
Portfolio
14 Management of the Fund Management of the Trust; Compensation; Compensation Table
15 Control Person and Principal Holder of Control Person and Principal Holder of Securities
Securities
16 Investment Advisory and Other Services Fund Administrator and Sub-Administrator; The Distributor; Custodian,
Dividend Disbursing Agent And Transfer Agent; Investment Adviser and
Other Master Portfolio Service Providers; Class A Service Plan;
Independent Public Accountant
17 Brokerage Allocation and Other Practices Portfolio Transactions And Brokerage
18 Capital Stock and Other Securities Management Of The Trust; Description Of Shares; Master Portfolio
Organization
19 Purchase, Redemption and Pricing of Securities Shareholder Investment Account; Redemption Of Shares; Valuation
Being Offered Of Portfolio Securities
20 Tax Status Taxation
21 Underwriters The Distributor
22 Calculation of Performance Data Investment Performance
23 Financial Statements Not Applicable
</TABLE>
iv
<PAGE>
Part C
- ------
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Registration Statement.
v
<PAGE>
MASSMUTUAL INDEXED EQUITY FUND
1295 STATE STREET
SPRINGFIELD, MASSACHUSETTS 01111
(413) 788-8411
MassMutual Institutional Funds (the "Trust") is a professionally managed,
open-end investment company designed to offer investors both the opportunity to
pursue long-term investment goals and the flexibility to respond to changes in
their investment objectives and economic and market conditions. The Trust
consists of separate series of shares, each of which has a distinctive
investment objective. This Prospectus describes one of these series, MassMutual
Indexed Equity Fund (the "Fund").
The Fund seeks to approximate as closely as practicable (before fees and
expenses) the capitalization-weighted total rate of return of that portion of
the U.S. market for publicly-traded common stocks composed of larger-capitalized
companies. This investment objective is fundamental and cannot be changed
without shareholder approval. The Fund seeks to achieve its investment objective
by investing all of its assets in the S&P 500 Index Master Portfolio (the
"Master Portfolio"), which is a series of Master Investment Portfolio, an open-
end management investment company, rather than in a portfolio of securities. The
Master Portfolio has substantially the same investment objective as the Fund and
the Fund's investment experience corresponds directly with that of the Master
Portfolio.
This Prospectus sets forth concisely the information about the Fund and the
Trust that a prospective investor should know before investing. Please read it
carefully and retain it for future reference. Certain additional information
about the Fund and the Trust is contained in a Statement of Additional
Information dated February 9, 1998, which has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. This additional
information is available without charge by writing to the Secretary, MassMutual
Institutional Funds, 1295 State Street, Springfield, Massachusetts 01111.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
DISTRIBUTOR
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048
PROSPECTUS February 9, 1998.
<PAGE>
Table Of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Expense Information............................................ 3
The Trust...................................................... 4
Investment Objective And Policies Of The Fund.................. 4
Investment Practices Of The Fund And Related Risks............. 5
How To Purchase, Exchange And Redeem Shares.................... 5
Master/Feeder Structure........................................ 8
Management Of The Fund......................................... 9
Description Of Shares.......................................... 10
How Fund Shares Are Priced..................................... 11
Distributions And Taxation..................................... 11
Investment Performance......................................... 12
Glossary....................................................... 13
Disclaimer..................................................... 13
Appendix - Additional Investment Policies...................... A-1
</TABLE>
2
<PAGE>
Expense Information
The following information, which reflects expenses for the Fund, including
indirect expenses incurred by the Master Portfolio, is provided in order to
assist you in understanding the various costs and expenses that you, as an
investor in the Fund, will bear directly or indirectly.
<TABLE>
<CAPTION>
Class A Class Y Class S
Shares Shares Shares
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Charge Imposed
on Purchases............................ None None None
Maximum Sales Charge
on Reinvested Dividends................. None None None
Maximum Deferred Sales Charge............ 1.00%/(1)/ None None
Exchange Fee............................. None None None
Redemption Fee........................... None None None
Annual Operating Expenses
(As a percentage of average net assets)
Management Fees.......................... .05% .05% .05%
Rule 12b-1 Fees........................... .25% None None
Other Expenses/(2)/...................... .78% .58% .37%
- -----------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES/(2)/............ 1.08% .63%/(3)/ .42%/(4)/
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) You may have to pay a contingent deferred sales charge of up to 1% if you
sell any Class A shares within 12 months of the date on which you first
purchased Class A shares of any series of the Trust. See "How to Purchase,
Exchange and Redeem Shares" below for more information on the contingent
deferred sales charge.
(2) Since the Fund is new and had not begun operations prior to the date of this
Prospectus, Other Expenses and Total Operating Expenses are based on
estimated amounts for the current fiscal year. The Management Fees and Rule
12b-1 Fees stated above reflect contract amounts. See " How to Purchase,
Exchange and Redeem Shares-Class A Shares-Sales Charges and 12b-1 Fees" and
"Management of the Trust."
(3) Class Y investors also may be subject to charges imposed in their
administrative services or other agreement with Massachusetts Mutual Life
Insurance Company ("MassMutual"). See "How to Purchase, Exchange and
Redeem Shares - Features and Eligibility Requirements of Each Class."
(4) There are no additional expenses for separate investment accounts purchasing
Class S shares, but employee benefit plans that invest in MassMutual
separate investment accounts are subject to charges imposed in their group
annuity contracts as set forth in their respective Plan Documents. See
"Glossary" for a definition of Plan Documents.
EXAMPLES: An investor would pay the following expenses on an
investment of $1,000 in the Fund assuming: (a) a
5% annual return and (b) redemption at the end of
each time period.
<TABLE>
<CAPTION>
Class A Class Y Class S
Shares Shares Shares
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
1 Year $21 $ 6 $ 4
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3 Years $34 $20 $13
- -------------------------------------------------------------------------------
</TABLE>
An investor would pay the following expenses on the same investment, assuming no
redemption:
<TABLE>
<CAPTION>
Class A Class Y Class S
Shares Shares Shares
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
1 Year $11 $ 6 $ 4
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3 Years $34 $20 $13
- -------------------------------------------------------------------------------
</TABLE>
The Examples are based on the Fund's "Total Operating Expenses," as described
above. Please remember that the Examples should not be considered as
representative of past or future expenses and that actual expenses may be higher
or lower than those shown. The assumption in the Examples of a 5% annual return
is required by regulations of the Securities and Exchange Commission (the
"SEC") and is applicable to all mutual funds. The assumed 5% annual return is
not a prediction of, and does not represent, the projected or actual performance
of the Fund's shares.
3
<PAGE>
The Trust
MassMutual Institutional Funds (the "Trust") is an open-end, management
investment company designed to offer investors both the opportunity to pursue
long-term investment goals and the flexibility to respond to changes in their
investment objectives and economic and market conditions. This Prospectus
describes MassMutual Indexed Equity Fund, a separate, diversified series of
shares of the Trust (the "Fund"). The Fund has three classes of shares
offered to different types of investors and having different expenses. Dividends
paid for a class of the Fund will vary in relation to the expenses each class
incurs. For information regarding the Fund's three classes of shares, see "How
To Purchase, Exchange And Redeem Shares" below.
The Trust is organized under the laws of The Commonwealth of Massachusetts as a
Massachusetts business trust pursuant to an Agreement and Declaration of Trust
dated May 28, 1993, as amended from time to time (the "Declaration of Trust").
The Board of Trustees of the Trust is generally responsible for management of
the business and affairs of the Trust. Trustees formulate the general policies
of the Trust and the Fund, approve contracts and authorize Trust officers to
carry out the decisions of the Board. For more information concerning the
management of the Trust, reference should be made to the Statement of Additional
Information.
Investment Objective And Policies Of The Fund
The Fund seeks to approximate as closely as practicable (before fees and
expenses) the capitalization-weighted total rate of return of that portion of
the U.S. market for publicly-traded common stocks composed of larger-capitalized
companies. This investment objective is fundamental and cannot be changed
without the vote of a majority of the Fund's outstanding voting shares./1/
There can be no assurance that the Fund will achieve its investment objective;
the success of the Fund depends to a great extent upon changes in market
conditions.
The Fund seeks to achieve its investment objective by investing all of its
assets in the S&P 500 Index Master Portfolio (the "Master Portfolio") of Master
Investment Portfolio, an open-end, management investment company ("MIP"). The
Master Portfolio has substantially the same investment objective as the Fund.
The Master Portfolio seeks to achieve its objective by investing substantially
all of its assets in the same stocks and in substantially the same percentages
as the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500
Index")./2/ The weightings of stocks in the S&P 500 Index are based on each
stock's relative total market capitalization; that is, its market price per
share times the number of shares outstanding .
The Master Portfolio has represented that no attempt is made to manage its
portfolio using economic, financial and market analysis. The Master Portfolio
is managed by determining which securities are to be purchased or sold to
replicate, to the extent feasible, the investment characteristics of the S&P 500
Index. Under normal market conditions, at least 90% of the value of the Master
Portfolio's total assets is invested in securities comprising the S&P 500 Index.
The Master Portfolio has also represented that it attempts to achieve, in both
rising and falling markets, a correlation of at least 95% between the total
return of its net assets, before expenses, and the total return of the S&P 500
Index. Notwithstanding the factors described below, perfect (100%) correlation
would be achieved if the total return of the Master Portfolio's net assets
increased or decreased exactly as the total return of the S&P 500 Index
increased or decreased.
The Master Portfolio's ability to match its investment performance to the
investment performance of the S&P 500 Index may be affected by, among other
things, the Fund's and the Master Portfolio's expenses, the amount of cash and
cash equivalents held by the Master Portfolio's investment portfolio, the manner
in which the total return of the S&P 500 Index is calculated and the timing,
frequency and size of shareholder purchases and redemptions of both the Fund and
the Master Portfolio. The Master Portfolio uses cash flows from shareholder
purchase and redemption activity to maintain, to the extent feasible, the
similarity of its portfolio to the securities comprising the S&P 500 Index.
Barclays Global Fund Advisors, the Master Portfolio's investment adviser
("BGFA"), regularly monitors the Master Portfolio's correlation to the S&P
500 Index and adjusts the portfolio of the Master Portfolio to the extent
necessary to achieve a correlation of at least 95% with the S&P 500 Index. The
Fund's performance will correspond directly to the experience of the Master
Portfolio.
The Master Portfolio has represented that it is a fully replicating portfolio,
which is an effective means of duplicating the investment performance of the S&P
500 Index. The
- -----------
/1/ As used in this Prospectus, a majority of the outstanding voting shares of
the Fund means the lesser of (a) 67% of the Fund's outstanding shares present at
a meeting of shareholders if more than 50% of the outstanding shares are present
in person or by proxy, or (b) more than 50% of the Fund's outstanding shares.
/2/ S&P does not sponsor the Fund or the Master Portfolio, nor is it affiliated
in any way with Barclays Global Fund Advisors, the Master Portfolio's investment
adviser, the Master Portfolio or the Fund. "Standard & Poor's(R)," "S&P(R),"
"S&P500(R)," and "Standard & Poor's 500(R)" are trademarks of McGraw-Hill, Inc.
and have been licensed for use by the Fund and the Master Portfolio. The Fund
and the Master Portfolio are not sponsored, endorsed, sold, or prompted by S&P
and S&P makes no representation or warranty, express or implied, regarding the
advisability of investing in the Fund and the Master Portfolio. S&P's only
relationship to the Fund and the Master Portfolio is the licensing of certain
trademarks and trade names of S&P and of the S&P 500 Index. The S&P 500 Index is
determined, composed and calculated by S&P without regard to the Fund or the
Master Portfolio.
4
<PAGE>
Master Portfolio has also represented that it holds all issues in the S&P 500
Index in capitalization weights and will add or delete securities in the same
weights and at the same time as changes are made to the S&P 500 Index.
In seeking to replicate the performance of the S&P 500 Index, the Master
Portfolio also may engage in futures and options transactions and other
derivative securities transactions, and may lend its portfolio securities, each
of which involves risk. Generally, the Master Portfolio attempts to be fully
invested at all times in securities comprising the S&P 500 Index and in futures
and options on stock index futures. The Master Portfolio may invest up to 10% of
its total assets in high-quality money market instruments to provide liquidity.
See "Appendix -Additional Investment Policies."
Investment Practices Of The Fund And Related Risks
General
The Fund's net asset value per share should be expected to fluctuate. Investors
should consider the Fund as a part of an overall investment program and should
invest only if they are willing to undertake the risks involved. For additional
information on the risks involved in investing in the Fund, see "Appendix -
Additional Investment Policies."
Equity Securities
The stock investments of the Master Portfolio are subject to equity market risk.
Equity market risk is the possibility that common stock prices will fluctuate or
decline over short or even extended periods. The U.S. stock market tends to be
cyclical, with periods when stock prices generally rise and periods when prices
generally decline. Throughout 1997, the stock market, as measured by the S&P 500
Index and other commonly used indices, was trading at or close to record levels.
There can be no guarantee that these performance levels will continue or even be
maintained. Changes in the value of the Master Portfolio's investments will
result in changes in the value of its shares and thus the Fund's total return to
investors.
Use of Derivatives
The Master Portfolio may engage in futures and options transactions and other
derivative securities transactions. These are financial instruments which derive
their performance, at least in part, from the performance of an underlying asset
or index. The derivatives the Master Portfolio may use include stock index
futures. While derivatives can be used effectively in furtherance of the Master
Portfolio's investment objective, under certain market conditions, they can
increase the volatility of the Master Portfolio's net asset value and can
decrease the accurate pricing of the Master Portfolio's portfolio. See
"Appendix - Additional Investment Policies" and "Additional Investment Policies"
in the Statement of Additional Information.
Foreign Securities
Since the stocks of some foreign issuers are included in the S&P 500 Index, the
Master Portfolio's portfolio may contain securities of such foreign issuers, as
well as American Depositary Receipts and similar instruments, which may subject
the Master Portfolio to additional investment risks with respect to those
securities that are different in some respects from those incurred by a fund
which invests only in securities of domestic issuers. Such risks include
possible adverse political and economic developments, seizure or nationalization
of foreign deposits or adoption of governmental restrictions which might
adversely affect the value of the securities of a foreign issuer to investors
located outside the country of the issuer, whether from currency blockage or
otherwise.
Other Investment Considerations
Asset allocation and modeling strategies are employed by BGFA for other
investment companies and accounts advised or sub-advised by BGFA. If these
strategies indicate particular securities should be purchased or sold at the
same time by the Master Portfolio and one or more of these investment companies
or accounts, available investments or opportunities for sales will be allocated
equitably to each by BGFA. In some cases, these procedures may adversely affect
the size of the position obtained for or disposed of by the Master Portfolio or
the price paid or received by the Master Portfolio.
Fundamental Investment Restrictions
For a description of fundamental investment restrictions of the Fund which may
not be changed without the affirmative vote of a majority of the outstanding
voting shares of the Fund, reference should be made to the Statement of
Additional Information.
How To Purchase, Exchange And Redeem Shares
Features and Eligibility Requirements of
Each Class
The Fund offers three different classes of shares to investors: Class A, Class Y
and Class S. The different classes of shares represent investments in the same
portfolio of securities but are subject to different expenses and will likely
have different share prices. The Class A, Class Y and Class S shares are
offered as follows.
Class A Shares - Class A shares of the Fund may be purchased by: defined
contribution plans and defined benefit plans that qualify under section 401(a)
of the Internal Revenue Code of 1986, as amended (the "Code"), with Plan
Assets/3/ in excess of $2.5 million; tax sheltered annuity plans under Code
section 403(b) with Plan Assets in excess of $2.5 million; and individual
retirement accounts described in Code section 408, the assets of which are
rolled
- ----------------
/3/ See "Glossary" for a definition of Plan Assets.
5
<PAGE>
over from qualified plans in connection with a program sponsored by
MassMutual ("Rollover IRAs"). Class A shares may also be purchased by other
institutional investors, such as deferred compensation plans described in Code
section 457, voluntary employees' beneficiary associations described in Code
section 509(c)(9), other non-qualified deferred compensation plans or other
institutional or sophisticated investors, in each case with assets in excess of
$2.5 million or which enter an agreement with MassMutual or an affiliate of
MassMutual for those purchases. In addition, Class A shares may be offered to
present or former officers, directors, trustees and employees (and their
spouses, parents, children and siblings) of the Trust, MassMutual and its
affiliates, and retirement plans established by them for their employees.
Class Y Shares - Class Y shares of the Fund may be purchased by non-qualified
deferred compensation plans where the employer sponsor enters into an
administrative services agreement with MassMutual, or an affiliate of
MassMutual, with respect to the administration of the plan. Class Y shares may
also be purchased by defined contribution plans and defined benefit plans under
Code section 401(a), and tax sheltered annuity plans under Code section 403(b),
in each case with Plan Assets in excess of $10 million and that enter into an
administrative services or other agreement with MassMutual or an affiliate of
MassMutual. Class Y shares may also be purchased by: certain other
institutional investors with assets in excess of $10 million that enter into
an agreement with MassMutual or an affiliate of MassMutual; and other
registered investment companies managed by MassMutual or an affiliate of
MassMutual, including other series of the Trust.
Class S Shares - Class S shares of the Fund are available only to separate
investment accounts ("SIAs") of MassMutual in which corporate qualified plans,
including defined contribution plans and defined benefit plans, certain
governmental plans and church or other plans are or may be permitted to invest
pursuant to the issuance of group annuity contracts.
Class A Shares - Sales Charges and 12b-1 Fees
Class A shares are sold at net asset value per share without an initial sales
charge. However, if an Investor/4/ redeems any Class A shares within 12 months
of the date on which the Investor first purchased Class A shares of any series
of the Trust, a contingent deferred sales charge (called the "Class A Contingent
Deferred Sales Charge") may be deducted from the redemption proceeds. If
imposed, the Class A Contingent Deferred Sales Charge will be equal to 1.0% of
the lesser of: (1) the aggregate net asset value of the redeemed shares (not
including shares purchased by reinvestment of dividends or capital gain
distributions); and (2) the original offering price (which is the original net
asset value of the redeemed shares). The Class A Contingent Deferred Sales
Charge will not exceed the aggregate commissions paid on account of all Class A
shares of all series of the Trust an Investor purchased subject to the Class A
Contingent Deferred Sales Charge.
In determining whether a Class A Contingent Deferred Sales Charge is payable,
the Fund will first redeem shares that are not subject to the sales charge,
including shares purchased by reinvestment of dividends and capital gains, and
then will redeem other shares in the order purchased.
No Class A Contingent Deferred Sales Charge is charged on exchanges of shares,
as described under "Exchange Privileges and Procedures." However, if the shares
acquired by exchange are redeemed within 12 months of the initial purchase of
the exchanged shares, the Class A Contingent Deferred Sales Charge will apply.
The Class A Contingent Deferred Sales Charge will be used directly or indirectly
to reimburse MassMutual or its affiliates for compensation paid to registered
representatives as described under "How Fund Shares are Priced."
The Class A Contingent Deferred Sales Charge is waived in certain cases
described.
Waivers of the Class A Contingent Deferred Sales Charges for Certain Purchasers.
Class A shares purchased by the following Investors are not subject to any Class
A Contingent Deferred Sales Charge:
(1) MassMutual or its affiliates; and
(2) present or former officers, directors, trustees and employees (and their
spouses, parents, children and siblings) of the Trust, MassMutual and its
affiliates, and retirement plans established by them for their employees.
Waivers of the Class A Contingent Deferred Sales Charge in Certain Transactions.
Class A shares issued or purchased in the following transactions are not subject
to the Class A Contingent Deferred Sales Charge:
- --------------
/4/ See "Glossary" for a definition of Investor.
6
<PAGE>
(1) shares issued in plans of reorganization, such as mergers;
(2) asset acquisitions and exchange offers to which the Fund is a party;
and
(3) shares purchased by the reinvestment of loan repayments by a participant
in a retirement plan for which MassMutual or its affiliates acts as
sponsor.
Waivers of the Class A Contingent Deferred Sales Charge for Certain Redemptions.
The Class A Contingent Deferred Sales Charge is also waived if shares that would
otherwise be subject to the Class A Contingent Deferred Sales Charge are
redeemed in the following cases:
(1) involuntary redemptions of shares by operation of law;
(2) if, at the time of purchase of shares the dealer agrees in writing to
accept the dealer's portion of the sales commission in installments of
1/12th of the commission per month (and no further commission will
be payable if the shares are redeemed within 12 months of purchase); and
(3) for distributions from Plans/5/ for any of the following purposes: (a)
following the death or disability (as defined in the Code) of the
participant or beneficiary (the death or disability must occur after the
participant's account was established); (b) to return excess
contributions; (c) to return contributions made due to a mistake of fact;
(d) hardship withdrawals, as defined in the Plan; (e) under a Qualified
Domestic Relations Order, as defined in the Code; (f) to meet the minimum
distribution requirements of the Code; (g) to establish "substantially
equal periodic payments" as described in Section 72(t) of the Code; (h)
for retirement distributions or loans to participants or beneficiaries;
(i) separation from service; (j) participant directed redemptions to
purchase shares of a mutual fund (other than a fund managed by MassMutual
or its subsidiaries) offered as an investment option in a Plan in which
the Fund is also offered as an investment option under a special
arrangement with MassMutual; or (k) Plan termination or "in service
distributions," if the redemption proceeds are rolled over directly to a
Rollover IRA, the assets of which are invested in the Trust.
Class A Service Plan. Pursuant to a Rule 12b-1 Plan adopted by the Fund, Class A
shares of the Fund pay a service fee at the annual rate of .25% of the Fund's
average daily net assets attributable to the Class A shares. The Fund's
Administrator, MassMutual, receives the service fees and may pay all or a
portion of them to brokers and other financial intermediaries, including the
Distributor and Sub-Distributor, for personal services rendered to Investors in
Class A shares and/or maintenance of Class A shareholder accounts.
The Class A service plan is of a type known as a compensation plan. This means,
that although the Trustees are expected to take into account the expenses of
MassMutual, the fees are payable to compensate MassMutual for services rendered
even if the amount paid by the Fund exceeds MassMutual's expenses. See the
Statement of Additional Information for a description of the types of
permissible service fee expenditures by MassMutual.
Class Y Shares - No Sales Charges
Class Y shares of the Fund are not subject to front-end sales charges.
Therefore, 100% of an Investor's money is invested in the Fund. In
addition, Class Y shares of the Fund are not subject to deferred sales charges
or to any distribution or service fees.
Class S Shares - No Sales Charges
SIAs purchase Class S shares directly from the Fund without a front-end sales
charge. Therefore, 100% of an SIA Investor's money is invested in the Fund. In
addition, Class S shares of the Fund are not subject to any deferred sales
charges or any distribution or service fees.
Purchase of Shares
Shares of the Trust are offered on each day the New York Stock Exchange ("NYSE")
is open for trading (a "Business Day"). Purchase orders received by the
Transfer Agent from MassMutual (as servicing agent of the Distributor) on a
Business Day prior to 4:00 p.m. Eastern Time will be processed based on that
day's closing net asset value.
Plan Investors purchasing group annuity contracts from MassMutual which have the
Fund as an investment option under their Plans ("Group Annuity Investors") and
Rollover IRAs must place their purchase orders with MassMutual (as servicing
agent of the Distributor) at its home office and must be accompanied by
sufficient funds. Acceptable methods of payment include checks, federal funds
wires, and automated clearing house transactions ("ACH"). MassMutual, as
servicing agent of the Distributor, will not transmit a purchase order to the
Trust's Transfer Agent until MassMutual has determined that the purchase order
is in good form. Generally, a purchase order will be determined by MassMutual to
be in good form if such order: (1) includes all information and documentation
necessary to make appropriate Investor, Plan, trustee and/or Plan Participant/6/
(if applicable) allocations to the Fund and/or other investment options under
the Plan; and (2) is received by MassMutual at its home office prior to the
close of the NYSE. Purchase orders by wire will be in good form only upon
receipt by MassMutual of: (1) immediately available funds, deposited to the
appropriate MassMutual account; and (2) a confirmation of the wire receipt. Any
order to purchase Fund shares which is received by MassMutual after the close of
the NYSE on a Business Day will be transmitted to the Trust's Transfer Agent on
the next Business Day. For more specific information regarding what information
and documentation are necessary for MassMutual to deter-
- -------------
/5/ See "Glossary" for a definition of Plans.
/6/ See "Glossary" for a definition of Plan Participant.
7
<PAGE>
mine that a purchase order is in good form with respect to a particular Plan,
Plan Investors should refer to Plan Documents.
For non-qualified deferred compensation plans eligible to purchase Class Y
shares that have entered into an administrative services agreement with
MassMutual, Class Y shares will be purchased directly by the Plan's trustee
pursuant to the terms of the administrative services agreement. Investors Bank &
Trust Company may serve as a Plan's trustee under the terms of the
administrative services agreement. Other Investors eligible to purchase Class A
and Class Y shares that have entered into an administrative services or other
agreement with MassMutual must place purchase orders in accordance with the
terms of such administrative services or other agreement. All other Investors
must enter into an agreement permitting direct purchases from the Trust.
The sale of Trust shares will be suspended during any period when the
determination of net asset value is suspended. The sale of Trust shares also may
be suspended by the Board of Trustees whenever the Board determines that it is
in the Trust's best interest to do so. The Trust, in its complete discretion,
may reject any order for purchase of its shares.
Exchange Privileges and Procedures
Investors have the privilege of exchanging shares of the Fund for the same class
of shares of another series of the Trust, subject to the provisions of Plan
Documents, any administrative services or other agreement with MassMutual and
applicable laws, including state insurance laws. However, exchanges may be
restricted or refused by the Fund if, in the opinion of the Trust: (1) an
Investor has engaged in excessive trading; (2) the Fund receives or anticipates
simultaneous orders affecting significant portions of the Fund's assets; or
(3) a pattern of exchanges coincides with a "market timing" strategy that might
be disruptive to the Fund. The Fund also reserves the right to refuse exchange
purchases by any person or group of persons, if, in the Trust's judgment, the
Fund would be unable to invest the funds effectively in accordance with its
investment objective and policies, or otherwise potentially would be adversely
affected. The Trust reserves the right on 60 days' written notice to modify or
terminate the exchange privilege. Furthermore, any exchange limits imposed by
the Trust may be modified, in the sole discretion of the Trust, for Plan
Investors so that the Trust's exchange privileges are consistent with Plan or
group annuity contract exchange limits as set forth in Plan Documents and
Department of Labor regulations. Plan Investors and Plan Participants should
refer to Plan Documents and related materials to determine what, if any,
exchange limitations apply to them.
For Group Annuity Investors and Rollover IRAs, exchange requests must be
delivered to MassMutual at its home office. An Investor that has entered into an
administrative services or other agreement with MassMutual must deliver exchange
requests in good form pursuant to the terms of its administrative services or
other agreement. All other Investors that have entered into an agreement
permitting direct purchases from the Trust must deliver exchange requests in
good form to the Transfer Agent.
Any exchange will involve the redemption of shares and the purchase of shares in
another series of the Trust on the basis of the next calculated net asset value
per share of each series of the Trust after the exchange request is received by
the Transfer Agent. Exchange requests will not be transmitted to the Transfer
Agent until determined to be in good form./7/
Redeeming Shares
For Group Annuity Investors and Rollover IRAs, redemption requests must be sent
to MassMutual at its home office. An Investor that has entered into an
administrative services or other agreement with MassMutual must deliver
redemption requests in good form pursuant to the terms of its administrative
services or other agreement. All other Investors that have entered into an
agreement permitting direct purchases from the Trust must deliver redemption
requests in good form to the Transfer Agent.
The Fund redeems its shares at their net asset value as next computed after
receipt by the Transfer Agent of a request for redemption. Redemption requests
will not be transmitted to the Transfer Agent until determined to be in good
form. Redemption payments will be made within seven days after receipt of the
written request therefor by the Trust, except that the right of redemption may
be suspended or payments postponed when permitted by applicable law and
regulations. When redemption is requested of shares recently purchased by
check, payment may be delayed until the check has been collected, which may take
up to 15 days from receipt of the check.
The Class A Contingent Deferred Sales Charge may be imposed on certain
redemptions of Class A shares. For information regarding the Class A Contingent
Deferred Sales Charge, see "Class A Shares -- Sales Charges and 12b-1 Fees"
above.
Master/Feeder Structure
The Fund is a feeder fund in a master/feeder structure. Accordingly, the Fund
invests all of its assets in the Master Portfolio which has substantially the
same investment objective as the Fund. See "Investment Objective And Policies
of the Fund." In addition to selling its shares to the Fund, the Master
Portfolio has sold and may continue to sell its shares to certain other mutual
funds or other accredited investors. Information regarding additional options,
if any, for investment in shares of the Master Portfolio is available from
Stephens Inc., the Master Portfolio's placement agent ("Stephens"), and may be
obtained by calling 1-800-643-9691. The expenses and, correspond-
- ----------------
/7/ See "Purchase of Shares" above for a discussion of the term "in good form."
8
<PAGE>
ingly, the returns of other investment options investing in the Master Portfolio
may differ from those of the Fund.
The Fund is liable for its proportionate share of the obligations of the Master
Portfolio. However, the risk of the Fund incurring financial loss on account of
such liability is limited to circumstances in which both inadequate insurance
exists and the Master Portfolio itself is unable to meet its obligations. If a
mutual fund or other investor withdraws its investment from the Master
Portfolio, the economic efficiencies (e.g., spreading fixed expenses across a
larger asset base) that should be available through investment in the Master
Portfolio may not be fully achieved or maintained. In addition, given the
relatively novel nature of the master/feeder structure, accounting and
operational difficulties could occur. See "Expense Information" for
additional description of the Fund's and Master Portfolio's expenses.
The Master Portfolio's investment objective and other fundamental policies,
which are substantially the same as those of the Fund, cannot be changed without
the vote of a majority (as defined in the Investment Company Act of 1940 (the
"1940 Act")) of the Master Portfolio's outstanding voting interests. On the
other hand, certain policies of the Master Portfolio which are non-fundamental
can be changed by vote of a majority of the MIP Board of Trustees without a vote
of interest-holders.
Whenever the Fund is requested to vote on matters pertaining to the Master
Portfolio, the Trust will either hold a meeting of the Fund's shareholders and
will cast its votes as instructed by Fund shareholders, or vote the shares of
the Master Portfolio held by it in the same proportion as the vote of all other
holders of such security. If the Fund is requested to vote on matters pertaining
to the Master Portfolio and the Fund holds a meeting of the Fund's shareholders,
the Trustees of the Trust will vote shares for which they receive no voting
instructions in the same proportion as the shares for which they do receive
voting instructions. If the Master Portfolio's investment objective or policies
are changed, the Fund could subsequently change its objective or policies to
correspond to those of the Master Portfolio or the Fund could redeem its Master
Portfolio interests and either seek a new investment company with a matching
objective in which to invest or retain its own investment adviser to manage its
portfolio in accordance with its objective. In the latter case, the Fund's
inability to find a substitute investment company in which to invest or
equivalent management services could adversely affect shareholders' investments
in the Fund. Investment of the Fund's assets in the Master Portfolio is not a
fundamental policy of the Fund and a shareholder vote is not required for the
Fund to withdraw its investment from the Master Portfolio.
Information on the Fund's and Master Portfolio's investment objectives, policies
and restrictions is included under "Investment Objective and Policies of the
Fund" and "Appendix -- Additional Investment Policies" in this Prospectus and
in corresponding sections of the Statement of Additional Information.
As of December 31, 1997, the S&P 500 Stock Fund of MasterWorks Funds Inc., 111
Center Street, Little Rock, Arkansas 72201, owned approximately 94% of the
outstanding voting securities of the Master Portfolio and could be considered a
"controlling person" of the Master Portfolio for purposes of the 1940 Act.
Management Of The Fund
General
The Fund has not retained the services of an investment adviser because the
Fund's assets are invested in the Master Portfolio, which has retained
investment advisory services. See "Master Portfolio Investment Adviser"
below. However, the Fund bears a pro rata portion of the investment advisory
and certain other fees paid by the Master Portfolio, such as accounting, legal
and SEC registration fees. The Fund is also responsible for its own expenses
relating to, among other things, administrative, custodial and fund accounting
services, and transfer and dividend-disbursing agency services.
Master Portfolio Investment Adviser
BGFA serves as investment adviser to the Master Portfolio. Pursuant to an
Investment Advisory Contract with the Master Portfolio, BGFA provides investment
guidance and policy direction in connection with the management of the Master
Portfolio's assets, subject to the overall authority of MIP's Board of Trustees
and in conformity with Delaware law and the stated policies of the Master
Portfolio. MIP is registered under the 1940 Act as an open-end management
investment company. MIP was organized on October 21, 1993 as a Delaware
business trust.
BGFA is a direct subsidiary of Barclays Global Investors, N.A. ("BGI") which, in
turn, is an indirect subsidiary of Barclays Bank PLC ("Barclays"). BGFA and BGI
are located at 45 Fremont Street, San Francisco, California 94105. BGFA serves
as investment adviser or sub-adviser to several registered open-end investment
companies and has been registered with the SEC as an investment advisor since
1984. As of November 30, 1997, BGFA and its affiliates managed, administered and
advised approximately $505 billion of assets. For its advisory services to the
Master Portfolio, BGFA is contractually entitled to receive from the Master
Portfolio a monthly fee at the annual rate of .05% of the Master Portfolio's
average daily net assets. For the fiscal year ended February 28, 1997, BGFA
received amounts equal to .05% of the average daily net assets of the Master
Portfolio as compensation for its advisory services.
BGFA, Barclays and their affiliates deal, trade and invest for their own account
in the types of securities in which the Master Portfolio may invest and may have
deposit, loan and commercial banking relationships with the issuers of
securities purchased by the Master Portfolio. BGFA has informed the Master
Portfolio that in making investment decisions BGFA does not obtain or use
material inside information in its possession.
Independent legal counsel to MIP and special counsel to BGFA has advised MIP and
BGFA that BGFA and its affiliates may perform the services contemplated by the
Investment Advisory Contract and this Prospectus without violation of the
Glass-Steagall Act. Such counsel has pointed out, however, that there are no
controlling judicial or administrative interpretations or decisions and that
future judicial or administrative interpretations of, or decisions relating to,
present federal or state statutes, including the Glass-Steagall Act, and
relating to the permissible activities of banks and their subsidiaries
9
<PAGE>
or affiliates, as well as future changes in such statutes, regulations and
judicial or administrative decisions or interpretations, could prevent such
entities from continuing to perform, in whole or in part, such services. If any
such entity were prohibited from performing any such services, it is expected
that new agreements would be proposed or entered into with another entity or
entities qualified to perform such services.
Fund Administrator and Sub-Administrator
MassMutual has entered into an administrative services agreement with the Fund
pursuant to which MassMutual is obligated to provide all necessary
administrative and shareholder services and to bear some class expenses, such as
federal and state registration fees, printing and postage. The Fund is
responsible for (i) its pro rata portion of certain fees and expenses paid by
the Master Portfolio, which may include but are not limited, to custody,
sub-administration, accounting, legal, audit, SEC registration, brokerage and
other expenses connected with the execution of portfolio transactions, trustees
and any extraordinary expenses and (ii) certain other expenses of the Fund,
including brokerage, taxes, interest, fees and expenses of non-interested
trustees, legal fees, any required trademark licensing fees, custody and audit
fees. MassMutual may, at its expense, employ others to supply all or any part of
the services to be provided to the Fund pursuant to the administrative services
agreement. The Trust, on behalf of the Fund, pays MassMutual an administrative
services fee monthly for the administrative services performed at annual rates
of the average daily net assets of the applicable class of shares of the Fund as
follows: .7688% for Class A shares; .5688% for Class Y shares; and .3588% for
Class S shares. Refer to "Expense Information" for more detailed
information.
MassMutual has entered into a sub-administration agreement with Investors Bank &
Trust Company ("IBT"). As sub-administrator, IBT generally assists in all
aspects of Fund administration. IBT is compensated by MassMutual for providing
administrative services to the Fund. IBT also serves as the sub-administrator to
the Master Portfolio and is compensated by BGI for providing administrative
services to the Master Portfolio.
Fund Distributor, Sub-Distributor, Transfer Agent, Dividend Disbursing Agent and
Custodian
OppenheimerFunds Distributor, Inc. ("Oppenheimer") acts as Distributor to the
Fund. MML Investors Services, Inc. ("MMLISI") serves as Sub-Distributor for the
Fund. MassMutual ultimately has a controlling interest in Oppenheimer. MMLISI is
a wholly-owned subsidiary of MassMutual. Both Oppenheimer and MMLISI may serve
as distributors of securities issued by other investment companies.
IBT serves as the Fund's Sub-Administrator, Transfer Agent, Dividend Disbursing
Agent and Custodian. As Custodian, IBT has custody of the Fund's securities, and
maintains certain financial and accounting books and records.
Master Portfolio Co-Administrators and Placement Agent
Stephens, located at 111 Center Street, Little Rock, Arkansas 72201, and BGI
serve as the Master Portfolio's co-administrators pursuant to a Co-
Administration Agreement with the Master Portfolio. Under the Co-Administration
Agreement, Stephens and BGI provide general supervision of the operations of the
Master Portfolio, other than the provision of investment advice. The
administrative services provided to the Master Portfolio also include
coordination of the other services provided to the Master Portfolio, compilation
of information for reports to the SEC and state securities commissions,
preparation of proxy statements and interest-holder reports and general
supervision of data compilation in connection with preparing periodic reports to
MIP's Board of Trustees and officers. In addition, Stephens furnishes office
space and certain facilities to conduct the Master Portfolio's business, and
compensates MIP's trustees, officers and employees who are affiliated with
Stephens. BGI has delegated certain of its administrative duties to IBT. IBT, as
sub-administrator, is compensated by BGI for performing certain administrative
services. Stephens and BGI are not currently entitled to compensation for
providing administrative services to the Master Portfolio. Stephens also serves
as the placement agent of the Master Portfolio's shares but does not receive
compensation for acting as placement agent.
Master Portfolio Custodian, Transfer and Dividend-Disbursing Agent
IBT acts as custodian, transfer agent and dividend disbursing agent to the
Master Portfolio.
Description Of Shares
The Trust is a professionally managed, open-end series investment company. The
Trust may issue an unlimited number of shares of multiple classes, in one or
more series as the Trustees may authorize, with or without par value as the
Trustees may prescribe. Each share of a particular class of a series represents
an equal proportionate interest in that series with each other share of the same
class, none having priority or preference over another. Each series is preferred
over all other series in respect of the assets allocated to that series. Each
share of a particular class of a series is entitled to a pro rata share of any
distributions declared in respect of that class and, in the event of
liquidation, a pro rata share of the net assets of that class remaining after
satisfaction of outstanding liabilities. When issued, shares are fully paid and
non-assessable and have no preemptive or subscription rights. Under the Trust's
Declaration of Trust, the Board of Trustees
10
<PAGE>
is authorized to create new series and classes without shareholder approval.
Shares of the Fund entitle their holder to one vote for each dollar (or
proportionate fractional vote for each fraction of a dollar) of net asset value
per share of the Fund or class for each share held as to any matter on which
such shares are entitled to vote.
The Trust is not required to hold annual meetings of shareholders. Special
meetings may be called for such purposes as electing Trustees, voting on
management agreements and with respect to such additional matters relating to
the Trust as may be required by the Trust's Declaration of Trust and the 1940
Act. See also "Master/Feeder Structure." Shareholder inquiries regarding the
Fund should be directed to MassMutual Institutional Funds, 1295 State Street,
Springfield, Massachusetts 01111-0001.
How Fund Shares Are Priced
The net asset value (closing price) of the Fund is determined once daily at 4:00
p.m. Eastern Time on each day on which the NYSE is open for trading.
The net asset value for shares of a class of the Fund is computed by adding the
value of the Fund's portfolio investments (i.e., the value of its investments in
the Master Portfolio) plus cash and other assets, if any, attributable to that
class, less any liabilities, and dividing the resulting total by the total
outstanding shares of the class. The net asset value of each class is expected
to fluctuate daily.
The Fund's investment in the Master Portfolio is valued at the Fund's
proportionate interest in the net asset value of the Master Portfolio. The
Master Portfolio calculates the net asset value of its shares on the same days
and at the same time as the Fund. Except for debt obligations with remaining
maturities of 60 days or less, which are valued at amortized cost, the Master
Portfolio's other assets are valued at current market prices, or if such prices
are not readily available, at fair value as determined in good faith in
accordance with guidelines approved by MIP's Board of Trustees. Prices used for
such valuations may be provided by independent pricing services. For further
information regarding the methods employed in valuing the Master Portfolios'
investments, see "Valuation of Portfolio Securities" in the Statement of
Additional Information.
A dealer or other organization selling shares of the Fund may receive different
levels of compensation for selling one class of shares over another. Class A
shares of the Fund, which may be purchased at the net asset value per share next
determined after receipt of a purchase request in good order, are subject to the
service fees under Rule 12b-1, as set forth and expressed on an annual basis
under "Expense Information."
MassMutual may directly, or through the Distributor or Sub-Distributor, pay cash
compensation to registered representatives who are not employees of MassMutual
who sell Class A and Y shares of the Fund. A registered representative selling
Class A shares may receive: (1) compensation in the first year in an amount up
to 1% of all first year contributions; and (2) in each subsequent year, annual
compensation in an amount equal to 0.25% of the amount invested. A registered
representative selling Class Y shares to Investors, other than in connection
with certain non-qualified deferred compensation plans, may receive annual
compensation in an amount equal to: (1) 0.10% of the amount invested if the
investment is equal to or less than $10 million; or (2) if the investment
exceeds $10 million, the sum of 0.10% of the first $10 million invested and
0.05% on amounts in excess of $10 million. In connection with the sale of Class
Y shares to non-qualified deferred compensation plans that enter into an
administrative services agreement with MassMutual, additional compensation may
be paid. In such cases, the aggregate annual compensation will be in an amount
equal to 0.25% of the amount invested. Annual compensation paid on account of
sales of Class A and Class Y shares will be paid quarterly, in arrears.
Distributions And Taxation
The Fund intends to qualify as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986 (the "Code"). As a regulated investment
company, the Fund will not be subject to federal income taxes on its ordinary
income and net realized capital gain distributed to its shareholders. In
general, if the Fund fails to distribute at least 98% of such income and gain in
the calendar year in which it is earned, the undistributed amount will be
subject to a 4% excise tax.
The Fund seeks to qualify as a regulated investment company by investing all of
its assets in the Master Portfolio. Based upon the classification of the Master
Portfolio as a non-publicly traded partnership for federal income tax purposes,
MIP believes that the Master Portfolio will not be subject to federal income tax
and will be deemed to "pass through" any interest, dividends, gains and losses
of the Master Portfolio to the Fund in proportion to the Fund's interest in the
Master Portfolio. If the Master Portfolio were to accrue but not distribute any
interest, dividends or gains, the Fund would be deemed to have recognized its
allocable share of such income, regardless of whether or not such income has
been distributed by the Master Portfolio. However, the Master Portfolio has
represented that it seeks to minimize recognition by the Fund and other
investors of interest, dividends and gains without a corresponding distribution.
Many Investors, including most tax qualified Plan Investors, may be eligible for
preferential federal income tax treatment on distributions received from the
Fund and dispositions of Fund
11
<PAGE>
shares. This Prospectus does not attempt to describe in any respect such
preferential tax treatment. Any prospective Investor that is a trust or other
entity eligible for special tax treatment under the Code that is considering
purchasing shares of the Fund, either directly or indirectly through a life
insurance company separate account, should consult its tax advisers about the
federal, state and local tax consequences particular to it, as should persons
considering whether to have amounts held for their benefit by such trusts or
other entities invested in shares of the Fund. Investors that do not receive
preferential tax treatment are subject to federal income taxes on distributions
received in respect of their shares. Distributions of the Fund's ordinary income
and short term capital gain are taxable to the shareholder as ordinary income
whether received in cash or additional shares. Designated long-term capital gain
distributions are taxable as long-term capital gain whether distributed in cash
or additional shares and regardless of how long the Investor has owned shares of
the Fund; however, a loss recognized from the sale of Fund shares held for six
months or less will be treated as a long-term capital loss to the extent of
long-term capital gains distributions. Under the Taxpayer Relief Act of 1997,
long-term capital gains generally will be subject to a 28% or 20% tax rate,
depending on the holding period in the portfolio investments. Certain designated
dividends may be eligible for the dividends-received deduction for corporate
shareholders. Investors should consult with their tax advisers for additional
information concerning the federal, state and local tax consequences of
purchasing shares of the Fund.
Dividends from net investment income and distributions of any net realized
capital gains of the Fund are declared and paid annually or at other times as
necessary to meet regulatory requirements. Distributions shall be paid in full
and fractional shares of the applicable class of the Fund at net asset value on
the first Business Day after the record date for the distribution, unless,
subject to such terms and conditions of the underlying Plan Documents, the
Investor has elected to receive dividend payments in cash.
Investment Performance
The Fund commenced operations on March 1, 1998. The Fund calculates the
performance for each class for periods commencing prior to March 1, 1998, by
including the corresponding total return of the Master Portfolio (which
includes, for the period from July 2, 1993 to May 26, 1994, the performance of
its predecessor) adjusted to reflect the deduction of the anticipated fees and
expenses applicable to each class of the Fund as stated in the Fee Table. See
"Expense Information." These fees and expenses include, in the case of Class A
Shares, Rule 12b-1 fees and contingent deferred sales charges. The Master
Portfolio's predecessor, a regulated investment company with the same investment
objective and substantially similar investment policies as the Master Portfolio,
contributed all of its assets to the Master Portfolio on May 26, 1994, at which
time the Master Portfolio hired the same investment adviser as its predecessor
and commenced operations.
The Fund from time to time may advertise certain investment performance figures.
These figures are based on historical earnings but past performance data is not
necessarily indicative of future performance of the Fund.
All performance information with respect to Class S shares will be provided net
of the Fund and SIA expenses, if any. The Fund may advertise its total return
and its holding period return (also known as cumulative total return) for
various periods of time. Total return is calculated by determining, over a
period of time as stated in the advertisement, the average annual compounded
rate of return that an investment in the Fund earned over that period, assuming
reinvestment of all distributions. Holding period return refers to the
percentage change in the value of an investment in a Fund over a period of time
(as stated in the advertisement), assuming reinvestment of all distributions.
Total return differs from holding period return principally in that total return
is an average annual figure while holding period return is an aggregate figure
for the entire period.
Average Annual Total Return for the year ended February 28, 1997.
- ---------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Class A Class Y Class S
<S> <C> <C> <C>
1 Year 24.94% 25.39% 25.60%
3 Years 20.85% 21.30% 21.51%
Since Inception (July 2, 1993) 17.92% 18.37% 18.58%
- ----------------------------------------------------------------------------------------------------
</TABLE>
The quoted performance data includes the performance of the Master Portfolio and
its predecessor (adjusted as described above) for all periods before the Fund's
Registration Statement became effective. Employee benefit plans that invest Plan
Assets in MassMutual SIAs that purchase Class S shares may be subject to certain
other charges as set forth in their respective Plan Documents. Investors that
enter into an administrative services or other agreement with MassMutual may
also be subject to certain changes as set forth in their respective agreements.
Total return figures would be lower if they reflected these charges.
12
<PAGE>
Glossary
Investor: includes a plan sponsor, plan fiduciary, trustee, institutional
investor, insurance company separate investment account, and/or any other person
or entity described in the Prospectus as an eligible purchaser of shares, that
purchases shares of the Trust and is hereinafter referred to as Investor or
collectively referred to as Investors. An Investor that is a separate
investment account of MassMutual is referred to as an SIA Investor to the extent
it invests in the Trust. Investors that are purchasing shares of the Fund on
behalf of a Plan are sometimes referred to as Plan Investors. The term Investor
does not include a Plan Participant.
Plan: refers to all defined contribution and defined benefit retirement plans
and any other employee retirement arrangement that invests in the Fund,
including non-qualified deferred compensation plans and tax sheltered annuity
plans.
Plan Assets: assets held by the Plan trustee of a particular Plan.
Plan Participant: includes active, deferred and suspended Plan Participants on
whose behalf Plan Assets are invested, as well as any other individual included
in the computation of active participants under the appropriate Form 5500 filed
with the Internal Revenue Service.
Plan Documents: refer to the documents that created and are related to a
particular employee benefit plan. These documents might include trust documents,
insurance contracts (including group annuity contracts), administrative service
agreements and other agreements for the provision of services or benefits for
the plan and its participants.
DISCLAIMER
- ----------
NEITHER THE FUND NOR THE MASTER PORTFOLIO IS SPONSORED, ENDORSED, SOLD OR
PROMOTED BY STANDARD & POOR'S ("S&P"). S&P MAKES NO REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, TO THE FUND, THE MASTER PORTFOLIO OR ANY MEMBER OF
THE PUBLIC REGARDING THE ADVISABILITY OF INVESTING IN SECURITIES GENERALLY OR IN
THE FUND PARTICULARLY OR THE ABILITY OF THE S&P 500 INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. S&P'S ONLY RELATIONSHIP TO THE FUND IS THE LICENSING OF
CERTAIN TRADEMARKS AND TRADE NAMES OF S&P WITHOUT REGARD TO THE FUND. S&P HAS
NO OBLIGATION TO TAKE THE NEEDS OF THE FUND INTO CONSIDERATION IN DETERMINING,
COMPOSING OR CALCULATING THE S&P 500 INDEX. S&P IS NOT RESPONSIBLE FOR AND HAS
NOT PARTICIPATED IN THE DETERMINATION OF THE PRICES AND AMOUNT OF THE FUND'S
SHARES OR THE TIMING OF THE ISSUANCE OR SALE OF THE FUND'S SHARES OR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND'S SHARES ARE TO
BE CONVERTED INTO CASH. S&P HAS NO OBLIGATION OR LIABILITY IN CONNECTION WITH
THE ADMINISTRATION, MARKETING OR TRADING OF THE FUND'S SHARES.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500 INDEX
OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS,
OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE
USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500 INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL
DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH
DAMAGES.
The name MassMutual Institutional Funds is the designation of the Trust under a
Declaration of Trust dated May 28, 1993, as amended. The obligations of the
Trust are not personally binding upon, nor shall resort be had to the property
of, any of the Trustees, shareholders, officers, employees or agents of the
Trust, but only the property of the relevant series of the Trust shall be
bound.
13
<PAGE>
Appendix -- Additional Investment Policies
Portfolio Securities
The Master Portfolio, subject to the terms of this Prospectus and the Fund's
Statement of Additional Information, may invest in the securities described
below.
U.S. Government Obligations -- The Master Portfolio may invest in various types
of U.S. Government obligations. U.S. Government obligations include securities
issued or guaranteed as to principal and interest by the U.S. Government, its
agencies or instrumentalities. Payment of principal and interest on U.S.
Government obligations (i) may be backed by the full faith and credit of the
United States (as with U.S. Treasury obligations and GNMA certificates) or (ii)
may be backed solely by the issuing or guaranteeing agency or instrumentality
itself (as with FNMA notes). In the latter case, the investor must look
principally to the agency or instrumentality issuing or guaranteeing the
obligation for ultimate repayment, which agency or instrumentality may be
privately owned. There can be no assurance that the U.S. Government would
provide financial support to its agencies or instrumentalities where it is not
obligated to do so. As a general matter, the value of debt instruments,
including U.S. Government obligations, declines when market interest rates
increase and rises when market interest rates decrease. Certain types of U.S.
Government obligations are subject to fluctuations in yield or value due to
their structure or contract terms.
Securities of Non-U.S. Issuers -- The Master Portfolio may invest in certain
securities of non-U.S. issuers as discussed below.
Obligations of Foreign Governments, Banks and Corporations -- The Master
- ----------------------------------------------------------
Portfolio may invest in U.S. dollar-denominated short-term obligations issued or
guaranteed by one or more foreign governments or any of their political
subdivisions, agencies or instrumentalities that are determined by BGFA to be of
comparable quality to the other obligations in which the Master Portfolio may
invest. The Master Portfolio may also invest in debt obligations of
supranational entities. Supranational entities include international
organizations designated or supported by governmental entities to promote
economic reconstruction or development and international banking institutions
and related government agencies. Examples include the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank, and the InterAmerican Development Bank.
The percentage of the Master Portfolio's assets invested in obligations of
foreign governments and supranational entities will vary depending on the
relative yields of such securities, the economic and financial markets of the
countries in which the investments are made and the interest rate climate of
such countries.
The Master Portfolio may invest a portion of its total assets in high-quality,
short-term (one year or less) debt obligations of foreign branches of U.S. banks
or U.S. branches of foreign banks that are denominated in and pay interest in
U.S. dollars.
American Depositary Receipts and Similar Instruments -- To the extent necessary
- ----------------------------------------------------
to replicate the investment characteristics of the S&P 500 Index, the Master
Portfolio may invest in foreign securities through American Depositary Receipts
("ADRs") and similar instruments convertible into securities of foreign
issuers. These securities may not necessarily be denominated in the same
currency as the securities into which they may be converted. ADRs (sponsored or
unsponsored) are receipts typically issued by a U.S. bank or trust company and
traded on a U.S. Stock Exchange, that evidence ownership of underlying foreign
securities. Issuers of unsponsored ADRs are not contractually obligated to
disclose material information in the U.S. and, therefore, such information may
not correlate to the market value of the unsponsored ADR.
Short-Term Instruments and Temporary Investments -- The Master Portfolio may
invest in high-quality money market instruments on an ongoing basis to provide
liquidity or for temporary purposes when there is an unexpected level of
shareholder purchases or redemptions. The instruments in which the Master
Portfolio may invest include: (i) short-term obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities (including government-
sponsored enterprises); (ii) negotiable certificates of deposit ("CDs"),
bankers' acceptances, fixed time deposits and other obligations of domestic
banks (including foreign branches) that have more than $1 billion in total
assets at the time of investment and that are members of the Federal Reserve
System or are examined by the Comptroller of the Currency or whose deposits are
insured by the FDIC; (iii) commercial paper rated at the date of purchase
"Prime-1" by Moody's or "A-1+" or "A-1" by S&P, or, if unrated, of comparable
quality as determined by BGFA; (iv) non-convertible corporate debt securities
(e.g., bonds and debentures) with remaining maturities at the date of purchase
of not more than one year that are rated at least "Aa" by Moody's or "AA" by
S&P; (v) repurchase agreements; and (vi) short-term, U.S. dollar-denominated
obligations of foreign banks (including U.S. branches) that, at the time of
investment have more than $10 billion, or the equivalent in other currencies, in
total assets and in the opinion of BGFA are of comparable quality to obligations
of U.S. banks which may be purchased by the Master Portfolio.
Bank Obligations -- The Master Portfolio may invest in bank obligations,
- ----------------
including certificates of deposit, time deposits, bankers' acceptances and other
short-term obligations of domestic banks, foreign subsidiaries of domestic
banks, foreign branches of domestic banks, and domestic and foreign branches of
foreign banks, domestic savings and loan associations and other banking
institutions.
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Certificates of deposit are negotiable certificates evidencing the obligation of
a bank to repay funds deposited with it for a specified period of time.
Time deposits are non-negotiable deposits maintained in a banking institution
for a specified period of time at a stated interest rate. Time deposits which
may be held by the Master Portfolio will not benefit from insurance from the
Bank Insurance Fund or the Savings Association Insurance Fund administered by
the Federal Deposit Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the obligation of a bank
to pay a draft drawn on it by a customer. These instruments reflect the
obligation both of the bank and of the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations, bearing fixed, floating- or variable-interest
rates.
Commercial Paper and Short-Term Corporate Debt Instruments -- The Master
- ----------------------------------------------------------
Portfolio may invest in commercial paper (including variable amount master
demand notes), which consists of short-term, unsecured promissory notes issued
by corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand
obligations that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangements between the issuer and a commercial
bank acting as agent for the payee of such notes whereby both parties have the
right to vary the amount of the outstanding indebtedness on the notes. The
investment adviser to the Master Portfolio monitors on an ongoing basis the
ability of an issuer of a demand instrument to pay principal and interest on
demand.
The Master Portfolio also may invest in non-convertible corporate debt
securities (e.g., bonds and debentures) with not more than one year remaining to
maturity at the date of settlement. The Master Portfolio will invest only in
such corporate bonds and debentures that are rated at the time of purchase at
least "Aa" by Moody's or "AA" by S&P. Subsequent to its purchase by the Master
Portfolio, an issue of securities may cease to be rated or its rating may be
reduced below the minimum rating required for purchase by the Master Portfolio.
The investment adviser to the Master Portfolio will consider such an event in
determining whether the Master Portfolio should continue to hold the obligation.
To the extent the Master Portfolio continues to hold such obligations, it may be
subject to additional risk of default.
Repurchase Agreements -- The Master Portfolio may enter into repurchase
- ----------------------
agreements wherein the seller of a security to the Master Portfolio agrees to
repurchase that security from the Master Portfolio at a mutually-agreed upon
time and price. The period of maturity is usually quite short, often overnight
or a few days, although it may extend over a number of months. The Master
Portfolio may enter into repurchase agreements only with respect to securities
that could otherwise be purchased by the Master Portfolio, and all repurchase
transactions must be collateralized. The Master Portfolio may incur a loss on a
repurchase transaction if the seller defaults and the value of the underlying
collateral declines or is otherwise limited or if receipt of the security or
collateral is delayed. The Master Portfolio may participate in pooled
repurchase agreement transactions with other funds advised by BGFA. See
"Additional Investment Policies" in the Statement of Additional Information for
additional information.
Investment Company Securities -- The Master Portfolio may invest in securities
issued by other open-end investment companies which principally invest in
securities of the type in which the Master Portfolio invests. Under the 1940
Act, the Master Portfolio's investment in such securities currently is limited
to, subject to certain exceptions, (i) 3% of the total voting stock of any one
investment company, (ii) 5% of the Master Portfolio's net assets with respect to
any one investment company and (iii) 10% of the Master Portfolio's net assets in
the aggregate. Investments in the securities of other investment companies
generally will involve duplication of advisory fees and certain other expenses.
The Master Portfolio may also purchase shares of exchange-listed closed-end
funds.
Futures Contracts and Options Transactions -- The Master Portfolio may use
futures as a substitute for a comparable market position in the underlying
securities.
A futures contract is an agreement between two parties, a buyer and a seller, to
exchange a particular commodity or financial instrument at a specific price on a
specific date in the future. An option transaction generally involves a right,
which may or may not be exercised, to buy or sell a commodity or financial
instrument at a particular price on a specified future date. Futures contracts
and exchange traded options are standardized and traded on exchanges, where the
exchange serves as the ultimate counterparty for all contracts. Consequently,
the primary credit risk on futures contracts is the creditworthiness of the
exchange. Futures contracts are subject to market risk (i.e., exposure to
adverse price changes).
Although the Master Portfolio intends to purchase or sell futures contracts only
if there is an active market for such contracts, no assurance can be given that
a liquid market will exist for any particular contract at any particular time.
Many futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the
daily limit has been reached in a particular contract, no trades may be made
that day at a price beyond that limit or trading may be suspended for specified
periods during the trading day. Futures contract prices could move to the limit
for several consecutive trading days with little or no trading, thereby
preventing prompt liquidation of futures positions and potentially subjecting
the Master Portfolio to substantial losses. If it is not possible, or if the
Master Portfolio determines not to close a futures position in anticipation of
adverse price movements, the Master Portfolio will be required to make daily
cash payments on variation margin.
Stock Index Futures and Options on Stock Index Futures -- The Master Portfolio
- ------------------------------------------------------
may invest in stock index futures contracts and options on stock index futures
contracts as a substitute for a comparable market position in the underlying
securities.
A-2
<PAGE>
A stock index future obligates the seller to deliver (and the purchaser to
take), effectively, an amount of cash equal to a specific dollar amount times
the difference between the value of a specific stock index at the close of the
last trading day of the contract and the price at which the agreement is made.
No physical delivery of the underlying stocks in the index is made. With
respect to stock indices that are permitted investments, the Master Portfolio
intends to purchase and sell futures contracts on the stock index for which it
can obtain the best price with consideration also given to liquidity. There can
be no assurance that a liquid market will exist at the time when the Master
Portfolio seeks to close out a futures contract or a futures option position.
Lack of a liquid market may prevent liquidation of an unfavorable position.
Currently, the Master Portfolio intends to limit its investments in such
instruments to S&P 500 Index futures and options thereon.
Loans of Portfolio Securities -- The Master Portfolio may lend securities from
its portfolio to domestic brokers, dealers and financial institutions (but not
individuals) in order to increase the return on the Master Portfolio's
portfolio. The value of the loaned securities may not exceed one-third of the
Master Portfolio's total assets and loans of portfolio securities are fully
collateralized based on values that are marked to market daily. The Master
Portfolio will not enter into any portfolio security lending arrangement having
a duration of longer than one year. The principal risk of portfolio lending is
potential default or insolvency of the borrower. In either of these cases, the
Master Portfolio could experience delays in recovering securities or collateral
or could lose all or part of the value of the loaned securities. The Master
Portfolio may pay reasonable administrative and custodial fees in connection
with loans of portfolio securities and may pay a portion of the interest or fee
earned thereon to the borrower or a placing broker. See "Additional Investment
Policies" in the Statement of Additional Information for additional information.
Borrowing Money -- As a fundamental policy, the Master Portfolio is permitted to
borrow to the extent permitted under the 1940 Act. However, the Master
Portfolio currently intends to borrow money only for temporary or emergency (not
leveraging) purposes, and may borrow up to one-third of the value of its total
assets (including the amount borrowed) valued at the lesser of cost or market,
less liabilities (not including the amount borrowed) at the time the borrowing
is made. While borrowings exceed 5% of the Master Portfolio's total assets, the
Master Portfolio will not make any new investments.
Floating- and Variable-Rate Obligations -- The Master Portfolio may purchase
debt instruments with interest rates that are periodically adjusted at specified
intervals or whenever a benchmark rate or index changes. These adjustments
generally limit the increase or decrease in the amount of interest received on
the debt instruments. Floating- and variable-rate instruments are subject to
interest-rate risk and credit risk.
Illiquid Securities -- The Master Portfolio may hold up to 15% of the value of
its net assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with its investment objective. Such
securities may include securities that are not readily marketable, such as
privately issued securities and other securities that are subject to legal or
contractual restrictions on resale, floating- and variable-rate demand
obligations as to which the Master Portfolio cannot exercise a demand feature on
not more than seven days' notice and as to which there is no secondary market
and repurchase agreements providing for settlement more than seven days after
notice.
Forward Commitments, When-Issued Purchases and Delayed-Delivery Transactions --
The Master Portfolio may purchase or sell securities on a when-issued or
delayed-delivery basis and make contracts to purchase or sell securities for a
fixed price at a future date beyond customary settlement time. Securities
purchased or sold on a when-issued, delayed-delivery or forward commitment basis
involve a risk of loss if the value of the security to be purchased declines, or
the value of the security to be sold increases, before the settlement date.
Although the Master Portfolio will generally purchase securities with the
intention of acquiring them, the Master Portfolio may dispose of securities
purchased on a when-issued, delayed-delivery or a forward commitment basis
before settlement when deemed appropriate by the BGFA.
A-3
<PAGE>
MASSMUTUAL INDEXED EQUITY FUND
1295 State Street
Springfield, Massachusetts 01111
ADMINISTRATOR
Massachusetts Mutual Life
Insurance Company
1295 State Street
Springfield, Massachusetts 01111
SUB-ADMINISTRATOR, TRANSFER AGENT
and CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
DISTRIBUTOR
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048
SUB-DISTRIBUTOR
MML Investors Services, Inc.
1414 Main Street
Springfield, Massachusetts 01144
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
2300 BayBank Tower
1500 Main Street
Springfield, Massachusetts 01101
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, Massachusetts 02110
<PAGE>
MASSMUTUAL INDEXED EQUITY FUND
1295 State Street
Springfield, Massachusetts 01111
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. IT SHOULD BE READ
IN CONJUNCTION WITH THE PROSPECTUS OF MASSMUTUAL INDEXED EQUITY FUND (THE
"FUND"), A SERIES OF MASSMUTUAL INSTITUTIONAL FUNDS (THE "TRUST" ), DATED
February 9, 1998 (THE "PROSPECTUS"). TO OBTAIN A PROSPECTUS, CALL YOUR
REGISTERED REPRESENTATIVE, AT (413) 788-8411, OR WRITE THE TRUST AT THE ABOVE
ADDRESS.
The investment objective of the Fund is to seek to approximate as closely as
practicable (before fees and expenses) the capitalization-weighted total return
of that portion of the U.S. market for publicly-traded common stocks composed of
larger-capitalized companies. The Fund seeks to achieve its investment objective
by investing all of its assets in the S&P 500 Index Master Portfolio, which is a
series of Master Investment Portfolio, an open-end, management investment
company, rather than in a portfolio of securities.
No dealer, salesman or any other person has been authorized to give any
information or to make any representations, other than those contained in this
Statement of Additional Information or in the related Prospectus, in connection
with the offer contained herein, and, if given or made, such other information
or representation must not be relied upon as having been authorized by the Trust
or the Distributor. This Statement of Additional Information and the related
Prospectus do not constitute an offer by the Trust or by the Distributor to sell
or a solicitation of any offer to buy any of the securities offered hereby in
any jurisdiction to any person to whom it is unlawful to make such offer in such
jurisdiction.
DATED February 9, 1998
B-1
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
GENERAL INFORMATION ................................................... B-3
ADDITIONAL INVESTMENT POLICIES ........................................ B-3
FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUND ....................... B-7
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUND ................... B-9
FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE MASTER PORTFOLIO ........... B-9
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE MASTER PORTFOLIO ....... B-10
MANAGEMENT OF THE TRUST ............................................... B-11
COMPENSATION .......................................................... B-15
COMPENSATION TABLE .................................................... B-15
CONTROL PERSON AND PRINCIPAL HOLDER OF SECURITIES ..................... B-16
FUND ADMINISTRATOR AND SUB-ADMINISTRATOR .............................. B-16
THE DISTRIBUTOR ....................................................... B-16
CLASS A SERVICE PLAN .................................................. B-17
CUSTODIAN, DIVIDEND DISBURSING AGENT AND TRANSFER AGENT ............... B-17
INDEPENDENT PUBLIC ACCOUNTANT ......................................... B-17
INVESTMENT ADVISER AND OTHER MASTER PORTFOLIO SERVICE PROVIDERS ....... B-18
PORTFOLIO TRANSACTIONS AND BROKERAGE .................................. B-19
SHAREHOLDER INVESTMENT ACCOUNT ........................................ B-20
REDEMPTION OF SHARES .................................................. B-20
VALUATION OF PORTFOLIO SECURITIES ..................................... B-20
DESCRIPTION OF FUND SHARES ............................................ B-21
MASTER PORTFOLIO ORGANIZATION ......................................... B-21
INVESTMENT PERFORMANCE ................................................ B-22
TAXATION .............................................................. B-24
APPENDIX - DESCRIPTION OF SECURITIES RATINGS .......................... B-26
</TABLE>
B-2
<PAGE>
GENERAL INFORMATION
-------------------
MassMutual Institutional Funds (the "Trust") is an open-end, management
investment company designed to offer investors both the opportunity to pursue
long-term investment goals and the flexibility to respond to changes in their
investment objectives and economic and market conditions. The Trust is organized
under the laws of The Commonwealth of Massachusetts as a Massachusetts business
trust pursuant to an Agreement and Declaration of Trust dated May 28, 1993, as
amended from time-to-time (the "Declaration of Trust"). This Statement of
Additional Information describes MassMutual Indexed Equity Fund, one of eight
separate, diversified series of shares of the Trust (the "Fund"). Additional
series may be created by the Trustees from time-to-time.
ADDITIONAL INVESTMENT POLICIES
------------------------------
The Fund has a distinct investment objective which it pursues, as described in
the Prospectus and below. The investment objective, fundamental investment
policies and fundamental investment restrictions of the Fund may not be changed
without the vote of a majority of the Fund's outstanding shares (which, under
the Investment Company Act of 1940 (the "1940 Act") and the rules thereunder and
as used in this Statement of Additional Information and in the Prospectus, means
the lesser of (1) 67% of the shares of the Fund present at a meeting if the
holders of more than 50% of the outstanding shares of the Fund are present in
person or by proxy, or (2) more than 50% of the outstanding shares of the Fund).
The Board of Trustees of the Trust may adopt new or amend or delete existing
non-fundamental investment policies and restrictions without shareholder
approval.
The investment objective of the Fund is to seek to approximate as closely as
practicable (before fees and expenses) the capitalization-weighted total return
of that portion of the U.S. market for publicly-traded common stocks composed of
larger-capitalized companies. The Fund seeks to achieve its investment objective
by investing all of its assets in the S&P 500 Index Master Portfolio (the
"Master Portfolio"), which is a series of Master Investment Portfolio ("MIP"),
an open-end, management investment company, rather than in a portfolio of
securities. Investment of the Fund's assets in the Master Portfolio is not a
fundamental policy of the Fund and a shareholder vote is not required for the
Fund to withdraw its investment from the Master Portfolio.
The following discussion, when applicable, elaborates on the presentation of the
types of securities in which the Master Portfolio may invest and the Master
Portfolio's investment policies contained in the Prospectus. For a description
of the ratings of corporate debt securities and money market instruments in
which the Master Portfolio may invest, reference should be made to the
Appendix.
Portfolio Securities
Bank Obligations. Domestic commercial banks organized under Federal law are
supervised and examined by the Comptroller of the Currency and are required to
be members of the Federal Reserve System and to have their deposits insured by
the Federal Deposit Insurance Corporation (the "FDIC"). Domestic banks organized
under state law are supervised and examined by state banking authorities but are
members of the Federal Reserve System only if they elect to join. In addition,
state banks whose certificates of deposit ("CDs") may be purchased by the Master
Portfolio are insured by the FDIC (although such insurance may not be of
material benefit to the Master Portfolio, depending on the principal amount of
the CDs of each bank held by the Master Portfolio) and are subject to Federal
examination and to a substantial body of Federal law and regulation. As a result
of Federal or state laws and regulations, domestic branches of domestic banks
whose CDs may be purchased by the Master Portfolio generally are required, among
other things, to maintain specified levels of reserves, are limited in the
amounts which they can loan to a single borrower and are subject to other
regulation designed to promote financial soundness. However, not all of such
laws and regulations apply to the foreign branches of domestic banks.
Obligations of foreign branches of domestic banks, foreign subsidiaries of
domestic banks and domestic and foreign branches of foreign banks, such as CDs
and time deposits ("TDs"), may be general obligations of the parent banks in
addition to the issuing branch, or may be limited by the terms of a specific
obligation and governmental regulation. Such obligations are subject to
different risks than are those of domestic banks. These risks include foreign
economic and political developments, foreign governmental restrictions that may
adversely affect payment of principal and interest on the obligations, foreign
exchange controls and foreign withholding and other taxes on interest income.
These foreign branches and subsidiaries are not necessarily subject to the same
or similar regulatory requirements that apply to domestic banks, such as
mandatory reserve requirements, loan limitations, and
B-3
<PAGE>
accounting, auditing and financial record keeping requirements. In addition,
less information may be publicly available about a foreign branch of a domestic
bank or about a foreign bank than about a domestic bank.
Obligations of United States branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation or by Federal or state regulation
as well as governmental action in the country in which the foreign bank has its
head office. A domestic branch of a foreign bank with assets in excess of $1
billion may be subject to reserve requirements imposed by the Federal Reserve
System or by the state in which the branch is located if the branch is licensed
in that state.
In addition, Federal branches licensed by the Comptroller of the Currency and
branches licensed by certain states ("State Branches") may be required to: (1)
pledge to the regulator, by depositing assets with a designated bank within the
state, a certain percentage of their assets as fixed from time to time by the
appropriate regulatory authority; and (2) maintain assets within the state in an
amount equal to a specified percentage of the aggregate amount of liabilities of
the foreign bank payable at or through all of its agencies or branches within
the state. The deposits of Federal and State Branches generally must be insured
by the FDIC if such branches take deposits of less than $100,000.
In view of the foregoing factors associated with the purchase of CDs and TDs
issued by foreign branches of domestic banks, by foreign subsidiaries of
domestic banks, by foreign branches of foreign banks or by domestic branches of
foreign banks, Barclays Global Fund Advisors ("BGFA"), the Master Portfolio's
investment adviser, carefully evaluates such investments on a case-by-case
basis.
The Master Portfolio may purchase CDs issued by banks, savings and loan
associations and similar thrift institutions with less than $1 billion in
assets, which are members of the FDIC, provided the Master Portfolio purchases
any such CD in a principal amount of not more than $100,000, which amount would
be fully insured by the Bank Insurance Fund or the Savings Association Insurance
Fund administered by the FDIC. Interest payments on such a CD are not insured by
the FDIC. The Master Portfolio will own no more than one such CD per such
issuer.
Management Policies
Repurchase Agreements. The Master Portfolio may engage in a repurchase agreement
with respect to any security in which it is authorized to invest, although the
underlying security may mature in more than thirteen months. The Master
Portfolio may enter into repurchase agreements wherein the seller of a security
to the Master Portfolio agrees to repurchase that security from the Master
Portfolio at a mutually agreed-upon time and price that involves the acquisition
by the Master Portfolio of an underlying debt instrument, subject to the
seller's obligation to repurchase, and the Master Portfolio's obligation to
resell, the instrument at a fixed price usually not more than one week after its
purchase. The Master Portfolio's custodian has custody of, and holds in a
segregated account, securities acquired as collateral by the Master Portfolio
under a repurchase agreement. Repurchase agreements are considered by the staff
of the Securities and Exchange Commissions (the "SEC") to be loans by the Master
Portfolio under the 1940 Act. The Master Portfolio may enter into repurchase
agreements only with respect to securities of the type in which it may invest,
including government securities and mortgage-related securities, regardless of
their remaining maturities, and requires that additional securities be deposited
with the custodian if the value of the securities purchased should decrease
below resale price. BGFA monitors on an ongoing basis the value of the
collateral to assure that it always equals or exceeds the repurchase price.
Certain costs may be incurred by the Master Portfolio in connection with the
sale of the underlying securities if the seller does not repurchase them in
accordance with the repurchase agreement. In addition, if bankruptcy proceedings
are commenced with respect to the seller of the securities, disposition of the
securities by the Master Portfolio may be delayed or limited. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the underlying
securities, as well as delay and costs to the Master Portfolio in connection
with insolvency proceedings), it is the policy of the Master Portfolio to limit
repurchase agreements to selected creditworthy securities dealers or domestic
banks or other recognized financial institutions. The Master Portfolio considers
on an ongoing basis the creditworthiness of the institutions with which it
enters into repurchase agreements.
Floating- and Variable-Rate Obligations. The Master Portfolio may purchase
floating- and variable-rate obligations as described in the Prospectus. The
Master Portfolio may purchase floating- and variable-rate demand notes and
bonds, which are obligations ordinarily having stated maturities in excess of
thirteen months, but which
B-4
<PAGE>
permit the holder to demand payment of principal at any time, or at specified
intervals not exceeding thirteen months. Variable rate demand notes include
master demand notes that are obligations that permit the Master Portfolio to
invest fluctuating amounts, which may change daily without penalty, pursuant to
direct arrangements between the Master Portfolio, as lender, and the borrower.
The interest rates on these notes fluctuate from time to time. The issuer of
such obligations ordinarily has a corresponding right, after a given period, to
prepay in its discretion the outstanding principal amount of the obligations
plus accrued interest upon a specified number of days' notice to the holders of
such obligations. The interest rate on a floating-rate demand obligation is
based on a known lending rate, such as a bank's prime rate, and is adjusted
automatically each time such rate is adjusted. The interest rate on a variable-
rate demand obligation is adjusted automatically at specified intervals.
Frequently, such obligations are secured by letters of credit or other credit
support arrangements provided by banks. Because these obligations are direct
lending arrangements between the lender and borrower, it is not contemplated
that such instruments generally will be traded, and there generally is no
established secondary market for these obligations, although they are redeemable
at face value. Accordingly, where these obligations are not secured by letters
of credit or other credit support arrangements, the Master Portfolio's right to
redeem is dependent on the ability of the borrower to pay principal and interest
on demand. Such obligations frequently are not rated by credit rating agencies
and the Master Portfolio may invest in obligations which are not so rated only
if BGFA determines that at the time of investment the obligations are of
comparable quality to the other obligations in which the Master Portfolio may
invest. BGFA, on behalf of the Master Portfolio, considers on an ongoing basis
the creditworthiness of the issuers of the floating- and variable-rate demand
obligations in the Master Portfolio's portfolio. The Master Portfolio will not
invest more than 10% of the value of its total net assets in floating- or
variable-rate demand obligations whose demand feature is not exercisable within
seven days. Such obligations may be treated as liquid, provided that an active
secondary market exists.
Futures Contracts and Options on Futures Contracts. The Master Portfolio may
enter into futures contracts and may purchase and write options thereon. Upon
exercise of an option on a futures contract, the writer of the option delivers
to the holder of the option the futures position and the accumulated balance in
the writer's futures margin account, which represents the amount by which the
market price of the futures contract exceeds, in the case of a call, or is less
than, in the case of a put, the exercise price of the option on the futures
contract. The potential loss related to the purchase of options on futures
contracts is limited to the premium paid for the option (plus transaction
costs). Because the value of the option is fixed at the time of sale, there are
no daily cash payments to reflect changes in the value of the underlying
contract; however, the value of the option does change daily and that change
would be reflected in the net asset value of the Master Portfolio.
Transactions by the Master Portfolio in futures contracts involve certain risks.
One risk in employing futures contracts as a hedge against cash market price
volatility is the possibility that futures prices will correlate imperfectly
with the behavior of the prices of the securities in the Master Portfolio's
investment portfolio. Similarly, in employing futures contracts as a substitute
for purchasing the designated underlying securities, there is a risk that the
performance of the futures contract may correlate imperfectly with the
performance of the direct investments for which the futures contract is a
substitute. In addition, commodity exchanges generally limit the amount of
fluctuation permitted in futures contract prices during a single trading day,
and the existence of such limits may prevent the prompt liquidation of futures
positions in certain cases. Limits on price fluctuations are designed to
stabilize prices for the benefit of market participants; however, there could be
cases where the Master Portfolio could incur a larger loss due to the delay in
trading than it would have if no limit rules had been in effect.
In order to comply with undertakings made by the Master Portfolio pursuant to
Commodity Futures Trading Commission ("CFTC") Regulation 4.5, the Master
Portfolio will use futures and option contracts solely for bona fide hedging
purposes within the meaning and intent of CFTC Reg. 1.3(z); provided, however,
that in addition, with respect to positions in commodity futures or commodity
option contracts which do not come within the meaning and intent of CFTC Reg.
1.3(z), the aggregate initial margin and premiums required to establish such
positions will not exceed 5% of the liquidation value of the Master Portfolio's
portfolio, after taking into account unrealized profits and unrealized losses on
any such contract it has entered into; and provided further, that in the case of
an option that is in-the-money at the time of purchase, the in-the-money amount
as defined in CFTC Reg. 190.01(x) may be excluded in computing such 5%.
Future Developments. The Master Portfolio may take advantage of opportunities
in the area of options and futures contracts and options on futures contracts
and any other derivative investments which are not presently
B-5
<PAGE>
contemplated for use by the Master Portfolio or which are not currently
available but which may be developed, to the extent such opportunities are both
consistent with the Master Portfolio's investment objective and legally
permissible for the Master Portfolio. Before entering into such transactions or
making any such investment, the Master Portfolio will provide appropriate
disclosure in its prospectus.
Loans of Portfolio Securities. The Master Portfolio may lend securities from its
portfolio to brokers, dealers and financial institutions (but not individuals)
if cash, U.S. Government securities or other high quality debt obligations equal
to at least 100% of the current market value of the securities loaned (including
accrued interest thereon) plus the interest payable to the Master Portfolio with
respect to the loan is maintained with the Master Portfolio. In determining
whether or not to lend a security to a particular broker, dealer or financial
institution, the Master Portfolio's investment adviser, BGFA, considers all
relevant facts and circumstances, including the size, creditworthiness and
reputation of the broker, dealer, or financial institution. Any loans of
portfolio securities are fully collateralized based on values that are marked to
market daily. The Master Portfolio does not enter into any portfolio security
lending arrangements having a duration longer than one year. Any securities that
the Master Portfolio receives as collateral do not become part of its portfolio
at the time of the loan and, in the event of a default by the borrower, the
Master Portfolio will, if permitted by law, dispose of such collateral except
for such part thereof that is a security in which the Master Portfolio is
permitted to invest. During the time securities are on loan, the borrower will
pay the Master Portfolio any accrued income on those securities, and the Master
Portfolio may invest the cash collateral and earn income or receive an
agreed-upon fee from a borrower that has delivered cash-equivalent collateral.
The Master Portfolio will not lend securities having a value that exceeds
one-third of the current value of its total assets. Loans of securities by the
Master Portfolio are subject to termination at the Master Portfolio's or the
borrower's option. The Master Portfolio may pay reasonable administrative and
custodial fees in connection with a securities loan and may pay a negotiated
portion of the interest or fee earned with respect to the collateral to the
borrower or the placing broker. Borrowers and placing brokers are not permitted
to be affiliated, directly or indirectly, to the Master Portfolio, BGFA or
Stephens, Inc. ("Stephens"), the Master Portfolio's placement agent and co-
administrator.
Investments in Warrants. The Master Portfolio may invest up to 5% of its net
assets in warrants. Warrants represent rights to purchase securities at a
specific price valid for a specific period of time. The prices of warrants do
not necessarily correlate with the prices of the underlying securities. The
Master Portfolio may only purchase warrants on securities in which the Master
Portfolio may invest directly.
Unrated, Downgraded and Below Investment Grade Investments. The Master Portfolio
may purchase instruments that are not rated if, in the opinion of BGFA, such
obligations are of investment quality comparable to other rated investments that
are permitted to be purchased by the Master Portfolio. After purchase by the
Master Portfolio, a security may cease to be rated or its rating may be reduced
below the minimum required for purchase by the Master Portfolio. Neither event
will require a sale of such security by the Master Portfolio provided that the
amount of such securities held by the Master Portfolio does not exceed 5% of the
Master Portfolio's net assets. To the extent the ratings given by Moody's or S&P
may change as a result of changes in such organizations or their rating systems,
the Master Portfolio will attempt to use comparable ratings as standards for
investments in accordance with the investment policies contained in the
Prospectus and in this Statement of Additional Information. The ratings of
Moody's and S&P are more fully described in the Appendix to this Statement of
Additional Information.
Because the Master Portfolio is not required to sell downgraded securities, the
Master Portfolio could hold up to 5% of its net assets in debt securities rated
below "Baa" by Moody's or below "BBB" by S&P or in unrated, low quality (below
investment grade) securities. Although they may offer higher yields than do
higher rated securities, low rated, and unrated, low quality debt securities
generally involve greater volatility of price and risk of principal and income,
including the possibility of default by, or bankruptcy of, the issuers of the
securities. In addition, the markets in which low rated and unrated, low quality
debt are traded are more limited than those in which higher rated securities are
traded. The existence of limited markets for particular securities may diminish
the Master Portfolio's ability to sell the securities at fair value either to
meet redemption requests or to respond to changes in the economy or in the
financial markets and could adversely affect and cause fluctuations in the daily
net asset value of the Master Portfolio's shares.
B-6
<PAGE>
Adverse publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of low rated or unrated, low
quality debt securities, especially in a thinly traded market. Analysis of the
creditworthiness of issuers of low rated or unrated, low quality debt securities
may be more complex than for issuers of higher rated securities, and the ability
of the Master Portfolio to achieve its investment objective may, to the extent
it holds low rated or unrated low quality debt securities, be more dependent
upon such creditworthiness analysis than would be the case if the Master
Portfolio held exclusively higher rated or higher quality securities.
Low rated or unrated low quality debt securities may be more susceptible to real
or perceived adverse economic and competitive industry conditions than
investment grade securities. The prices of such debt securities have been found
to be less sensitive to interest rate changes than higher rated or higher
quality investments, but more sensitive to adverse economic downturns or
individual corporate developments. A projection of an economic downturn or of a
period of rising interest rates, for example, could cause a decline in low rated
or unrated, low quality debt securities prices because the advent of a recession
could dramatically lessen the ability of a highly leveraged company to make
principal and interest payments on its debt securities. If the issuer of the
debt securities defaults, the Master Portfolio may incur additional expenses to
seek recovery.
Letters of Credit. Certain of the debt obligations (including municipal
securities, certificates of participation, commercial paper and other short-term
obligations) which the Master Portfolio may purchase may be backed by an
unconditional and irrevocable letter of credit of a bank, savings and loan
association or insurance company which assumes the obligation for payment of
principal and interest in the event of default by the issuer. Only banks,
savings and loan associations and insurance companies which, in the opinion of
BGFA, as investment advisor, are of comparable quality to issuers of other
permitted investments of the Master Portfolio may be used for letter of
credit-backed investments.
When-Issued Securities. Certain of the securities in which the Master Portfolio
may invest will be purchased on a when-issued basis, in which case delivery and
payment normally take place within 45 days after the date of the commitment to
purchase. The Master Portfolio only will make commitments to purchase securities
on a when-issued basis with the intention of actually acquiring the securities,
but may sell them before the settlement date if it is deemed advisable. When-
issued securities are subject to market fluctuation, and no income accrues to
the purchaser during the period prior to issuance. The purchase price and the
interest rate that will be received on debt securities are fixed at the time the
purchaser enters into the commitment. Purchasing a security on a when-issued
basis can involve a risk that the market price at the time of delivery may be
lower than the agreed-upon purchase price, in which case there could be an
unrealized loss at the time of delivery. The Master Portfolio currently does not
intend on investing more than 5% of its assets in when-issued securities during
the coming year. The Master Portfolio will establish a segregated account in
which it will maintain cash or liquid securities in an amount at least equal in
value to the Master Portfolio's commitments to purchase when-issued securities.
If the value of these assets declines, the Master Portfolio will place
additional liquid assets in the account on a daily basis so that the value of
the assets in the account is equal to the amount of such commitments.
FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUND
-----------------------------------------------
The Fund is subject to certain fundamental restrictions on its investments,
which may not be changed without the affirmative vote of a majority of the
outstanding shares of the Fund. Investment restrictions that appear below or
elsewhere in this Statement of Additional Information and in the Prospectus
which involve a maximum percentage of securities or assets shall not be
considered to be violated (except with respect to restriction No. 8 below)
unless an excess over the percentage occurs immediately after, and is caused by,
an acquisition or encumbrance of securities or assets of, or borrowings by or on
behalf of, the Fund. The Trust may not, on behalf of the Fund:
(1) purchase the securities of issuers conducting their principal business
activity in the same industry if, immediately after the purchase and as a
result thereof, the value of the Fund's investments in that industry would
be 25% or more of the current value of the Fund's total assets, provided
that there is no limitation with respect to investments in (i) obligations
of the U.S. Government, its agencies or instrumentalities and (ii) any
industry in which the S&P 500 Index becomes concentrated to the same degree
during the same period, and provided further, that the Fund may invest all
its assets in a diversified open-end management investment company, or
series thereof, with substantially the same investment objective, policies
and restrictions as the Fund, without regard for the limitations set forth
in this paragraph (1);
B-7
<PAGE>
(2) purchase or sell real estate or real estate limited partnerships (other
than securities secured by real estate or interests therein or securities
issued by companies that invest in real estate or interests therein);
(3) purchase commodities or commodity contracts, except that the Fund may
purchase securities of an issuer which invests or deals in commodities or
commodity contracts, and except that the Fund may purchase and sell (i.e.,
write) options, forward contracts, futures contracts, including those
relating to indexes, and options on futures contracts or indexes;
(4) purchase securities on margin (except for short-term credits necessary
for the clearance of transactions and except for margin deposits in
connection with options, forward contracts, futures contracts, including
those related to indexes, and options on futures contracts or indexes);
(5) act as an underwriter of securities of other issuers, except to the
extent that the Fund may be deemed an underwriter under the Securities Act
of 1933, as amended (the "1933 Act"), by virtue of disposing of portfolio
securities and provided further, that the purchase by the Fund of
securities issued by a diversified, open-end management investment company,
or a series thereof, with substantially the same investment objective,
policies and restrictions as the Fund shall not constitute an underwriter
for purposes of this paragraph (5);
(6) issue senior securities, except as permitted by the 1940 Act;
(7) borrow money, except as permitted by the 1940 Act. The 1940 Act
currently permits the Fund to borrow from any bank; provided, that
immediately after any such borrowing there is an asset coverage of at least
300 per centum for all borrowings of the Fund; and provided further, that
in the event that such asset coverage shall at any time fall below 300 per
centum the Fund shall, within three days thereafter (not including Sundays
and holidays) or such longer period as the SEC may prescribe by rules and
regulations, reduce the amount of its borrowings to an extent that the
asset coverage of such borrowings shall be at least 300 per centum. For
purposes of this investment restriction, the Fund's entry into options,
forward contracts, futures contracts, including those relating to indexes,
and options on futures contracts or indexes shall not constitute borrowing
to the extent certain segregated accounts are established and maintained by
the Fund;
(8) purchase securities of any issuer (except securities issued or
guaranteed by the U.S. Government, its agencies and instrumentalities or
other investment companies) if, as a result, with respect to 75% of its
total assets, (i) more than 5% of the value of the Fund's total assets
would be invested in the securities of that issuer or, (ii) the Fund's
ownership would be more than 10% of the outstanding voting securities of
such issuer; or
(9) make loans, except that the Fund may purchase or hold debt instruments
or lend its portfolio securities in accordance with its investment
policies, and may enter into repurchase agreements.
B-8
<PAGE>
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUND
---------------------------------------------------
In addition to the fundamental investment restrictions described above, the
Trustees of the Trust have voluntarily adopted certain policies and restrictions
which are observed in the conduct of the affairs of the Fund. These represent
intentions of the Trustees based upon current circumstances. They differ from
fundamental investment restrictions in that the following additional investment
restrictions may be changed or amended by action of the Trustees without
requiring prior notice to or approval of shareholders.
In accordance with such policies and guidelines, the Fund:
(1) may not, unless required by its investment strategy of replicating the
composition of a published market index, purchase securities of issuers
who, with their predecessors, have been in existence less than three years,
unless the securities are fully guaranteed or insured by the U.S.
Government, a state, commonwealth, possession, territory, the District of
Columbia or by an entity in existence at least three years, or the
securities are backed by the assets and revenues of any of the foregoing
if, by reason thereof, the value of its aggregate investments in such
securities will exceed 5% of its total assets, provided that this
restriction does not affect the Fund's ability to invest all or a portion
of its assets in the Master Portfolio;
(2) reserves the right to invest up to 15% of the current value of its net
assets in fixed time deposits that are subject to withdrawal penalties and
that have maturities of more than seven days, repurchase agreements
maturing in more than seven days or other illiquid securities, provided
that in circumstances where fluctuations in value result in the Fund's
investment in illiquid securities constituting more than 15% of the current
value of its net assets, the Fund will take reasonable steps to reduce its
investments in illiquid securities until such investments constitute no
more than 15% of the Fund's net assets;
(3) may not purchase, sell or write puts, calls or combinations thereof,
except as may be described in this Statement of Additional Information and
the Fund's Prospectus; and
(4) may invest in shares of other open-end, management investment
companies, subject to the limitations of Section 12(d)(1) of the 1940 Act.
FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE MASTER PORTFOLIO
-----------------------------------------------------------
The Master Portfolio is subject to the following investment limitations which
cannot be changed without approval of a majority (as defined in the 1940 Act) of
the Master Portfolio's outstanding voting securities.
The Master Portfolio may not:
(1) invest more than 5% of its assets in the obligations of any single issuer,
except that up to 25% of the value of its total assets may be invested, and
securities issued or guaranteed by the U.S. Government, or its agencies or
instrumentalities may be purchased, without regard to any such limitation;
(2) hold more than 10% of the outstanding voting securities of any single
issuer. This investment restriction applies only with respect to 75% of its
total assets;
(3) invest in commodities, except that the Master Portfolio may purchase and
sell (i.e., write) options, forward contracts, futures contracts, including
those relating to indexes, and options on futures contracts or indexes;
(4) purchase, hold or deal in real estate, or oil, gas or other mineral leases
or exploration or development programs, but the Master Portfolio may purchase
and sell securities that are secured by real estate or issued by companies that
invest or deal in real estate;
(5) borrow money, except to the extent permitted under the 1940 Act, and except
that the Master Portfolio may borrow up to 20% of the current value of its net
assets for temporary purposes only in order to meet redemptions, and these
borrowings may be secured by the pledge of up to 20% of the current value of its
net assets (but investments may not be purchased while any such outstanding
borrowing in excess of 5% of its net assets exists);
B-9
<PAGE>
(6) make loans to others, except through the purchase of debt obligations and
the entry into repurchase agreements. However, the Master Portfolio may lend its
portfolio securities in an amount not to exceed one-third of the value of its
total assets. Any loans of portfolio securities will be made according to
guidelines established by the SEC and MIP's Board of Trustees;
(7) act as an underwriter of securities of other issuers, except to the extent
the Master Portfolio may be deemed an underwriter under the 1933 Act, by virtue
of disposing of portfolio securities;
(8) invest 25% or more of its total assets in the securities of issuers in any
particular industry or group of closely related industries and except that there
shall be no limitation with respect to investments in (i) obligations of the
U.S. Government, its agencies or instrumentalities; and (ii) any industry in
which the S&P 500 Index becomes concentrated to the same degree during the same
period (the Master Portfolio will be concentrated as specified above only to the
extent the percentage of its assets invested in those categories of investments
is sufficiently large that 25% or more of its total assets would be invested in
a single industry);
(9) issue any senior security (as such term is defined in Section 18(f) of the
1940 Act), except to the extent the activities permitted in paragraphs (3) and
(5) above, and in paragraphs (2) and (3) below, may be deemed to give rise to a
senior security; or
(10) purchase securities on margin, but the Master Portfolio may make margin
deposits in connection with transactions in options, forward contracts, futures
contracts, including those related to indexes, and options on futures contracts
or indexes.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE MASTER PORTFOLIO
---------------------------------------------------------------
The Master Portfolio is subject to the following non-fundamental operating
policies which may be changed by the Board of Trustees of the Master Portfolio
without the approval of the holders of the Master Portfolio's outstanding
securities.
The Master Portfolio may not:
(1) invest in the securities of a company for the purpose of exercising
management or control, but the Master Portfolio will vote the securities it owns
in its portfolio as a shareholder in accordance with its views;
(2) pledge, mortgage or hypothecate its assets, except to the extent necessary
to secure permitted borrowings and to the extent related to the purchase of
securities on a when-issued or forward commitment basis and the deposit of
assets in escrow in connection with writing covered put and call options and
collateral and initial or variation margin arrangements with respect to options,
forward contracts, futures contracts, including those relating to indexes, and
options on futures contracts or indexes;
(3) purchase, sell or write puts, calls or combinations thereof, except as may
be described in the Master Portfolio's offering documents;
(4) purchase securities of any company having less than three years' continuous
operations (including operations of any predecessors) unless the securities are
fully guaranteed or insured by the U.S. Government, a state, commonwealth,
possession, territory, the District Columbia or by an entity in existence at
least three years, or the securities are backed by the assets and revenues of
any of the foregoing, if such purchase would cause the value of its investments
in all such companies to exceed 5% of the value of its total assets;
(5) enter into repurchase agreements providing for settlement in more than seven
days after notice or purchase securities which are illiquid, if, in the
aggregate, more than 15% of the value of the Master Portfolio's net assets would
be so invested;
(6) purchase securities of other investment companies, except to the extent
permitted under the 1940 Act; or
(7) purchase or retain securities of any issuer if the officers or Trustees of
the Company, the Trusts or the investment adviser owning beneficially more than
one-half of one percent (0.5%) of the securities of the issuer together owned
beneficially more than 5% of such securities.
B-10
<PAGE>
MANAGEMENT OF THE TRUST
-----------------------
The Trust has a Board of Trustees, a majority of which must not be "Interested
Persons" as defined in the 1940 Act. The Trustees and principal officers of the
Trust are listed below together with information on their positions with the
Trust, address, age, principal occupations during the past five years and other
principal business affiliations.
Gary E. Wendlandt* Chairman, Chief Executive Officer
1295 State Street and Trustee of the Trust
Springfield, MA 01111
Age: 47
Chief Investment Officer (since 1993), Executive Vice President (since
1992), MassMutual; Chairman (since 1995), Vice Chairman (1993-1995) and
President (1988-1993), MML Series Investment Fund (open-end investment
company); Chairman (since 1995), President (1983-1995) and Trustee,
MassMutual Corporate Investors and Chairman (since 1995), President (1988-
1995) and Trustee, MassMutual Participation Investors (closed-end
investment companies); Chairman (since 1996), Antares Leveraged Capital
Corp. (finance company); Chairman, HYP Management, Inc. (managing member of
MassMutual High Yield Partners LLC) and MMHC Investment, Inc. (investor in
MassMutual High Yield Partners LLC); Advisory Board Member (since 1996),
MassMutual High Yield Partners LLC (high yield bond fund); President and
Director (since 1995), DLB Acquisition Corporation (holding company for
investment advisers); Director (since 1990), Oppenheimer Acquisition
Corporation (investment advisory holding company); Supervisory Director
(since 1991) MassMutual/Carlson CBO N.V. (collateralized bond fund);
Director (since 1994), MassMutual Corporate Value Partners Limited
(investor in debt and equity securities) and MassMutual Corporate Value
Limited (parent of MassMutual Corporate Value Partners Limited); Chairman
(since 1994) and Director (since 1993), MML Realty Management Corporation;
Chairman (since 1994) and Chief Executive Officer (1994-1996), Cornerstone
Real Estate Advisers, Inc. (wholly-owned real estate investment adviser
subsidiary of MassMutual Holding Company); Director (since 1992), Merrill
Lynch Derivative Products, Inc.; Chairman (1994-1995) and Director (1993-
1995), MML Real Estate Corporation.
Ronald J. Abdow Trustee of the Trust
1400 Elm Street
West Springfield, MA 01089
Age: 67
President, Abdow Corporation (operator of restaurants); General Partner,
Grove Investment Group (apartment building syndicator); Trustee, Abdow G&R
Trust and Abdow G&R Co. (owners and operators of restaurant properties);
Partner, Abdow Partnership, Abdow Auburn Associates, and Abdow Hazard
Associates (owners and operators of restaurant properties); Trustee (since
1993) MML Series Investment Fund (open-end investment company).
Richard H. Ayers Trustee of the Trust
1000 Stanley Drive
New Britain, CT 06053
Age: 55
Adviser to Chairman (since 1997), Chairman and Chief Executive Officer
(1989-1996) and Director (since 1985), The Stanley Works (manufacturer of
tools, hardware, specialty hardware and specialty hardware products);
Director (since 1986), Southern New England Telecommunications Corp.;
Director (since 1988), Perkin Elmer Corp.; Advisory Board Member (since
1996), MML Series Investment Fund (open-end investment company).
- ---------------
* Trustee who is an "interested person" of the Trust within the definition set
forth in Section 2(a)(19) of the 1940 Act.
B-11
<PAGE>
Mary E. Boland Trustee of the Trust
67 Market Street
Springfield, MA 01118
Age: 58
Attorney at Law, Egan, Flanagan and Cohen, P.C. (law firm), Springfield,
MA; Director (since 1995), Trustee (until 1995), SIS Bank (formerly,
Springfield Institution for Savings); Trustee, MML Series Investment Fund
(open-end investment company).
David E. A. Carson Trustee of the Trust
850 Main Street
Bridgeport, CT 06604
Age: 63
President and Chief Executive Officer (since 1985), People's Bank;
Director, United Illuminating Co.; Trustee, American Skandia Trust (open-
end investment company); Advisory Board Member (since 1996), MML Series
Investment Fund (open-end investment company).
Richard G. Dooley* Trustee of the Trust
1295 State Street
Springfield, MA 01111
Age: 68
Consultant (since 1993), Executive Vice President and Chief Investment
Officer (1978-1993), MassMutual; Director (since 1996), Investment
Technology Group Inc.; Director, The Advest Group, Inc. (financial services
holding company), Hartford Steam Boiler Inspection and Insurance Co., New
England Education Loan Marketing Corporation; Director (since 1992), Kimco
Realty Corp. (shopping center ownership and management); Director (since
1993), Jefferies Group, Inc. (financial services holding company); Director
and Vice President (until 1997), Oppenheimer Acquisition Corporation
(investment advisory holding company); Vice Chairman (since 1995), Chairman
(1982-1995), MassMutual Corporate Investors, and Vice Chairman (since
1995), Chairman (1988-1995), MassMutual Participation Investors (closed-end
investment companies); Director (1993-1995), Luxonen S.A. (Swedish
investment fund); Supervisory Director (1991-1995), MassMutual/Carlson CBO
N.V. (collateralized bond fund); Director (1984-1993), MML Real Estate
Corporation (real estate management subsidiary of MassMutual Holding
Company) and MML Realty Management Corporation (subsidiary of MassMutual
Holding Company to manage real estate projects); Vice Chairman (since
1995), Chairman (1988-1995), MML Series Investment Fund (open-end
investment company).
Richard W. Greene Trustee of the Trust
University Of Rochester
Rochester, NY 14627
Age: 62
Executive Vice President and Treasurer (since 1986), University of
Rochester (private university); Advisory Board Member (since 1996), MML
Series Investment Fund (open-end investment company).
Beverly C. L. Hamilton Trustee of the Trust
515 South Flower Street
Los Angeles, CA 90017
Age: 51
President (since 1991), ARCO Investment Management Co.; Vice President
(since 1991), Atlantic Richfield Company; Director (since 1992),
Connecticut Natural Gas; Director (since 1991), Emerging Markets Growth
Fund (closed-end investment company); Advisory Board Member (since 1996),
MML Series Investment Fund (open-end investment company).
- ---------------
* Trustee who is an "interested person" of the Trust within the definition set
forth in Section 2(a)(19) of the 1940 Act.
B-12
<PAGE>
F. William Marshall, Jr. Trustee of the Trust
1441 Main Street
Springfield, MA 01102
Age: 55
President, Chief Executive Officer and Director (since 1993), SIS Bank
(formerly, Springfield Institution for Savings); Chairman and Chief
Executive Officer (1990-1993), Bank of Ireland First Holdings, Inc. and
First New Hampshire Banks; Trustee (since 1996), MML Series Investment Fund
(open-end investment company).
Charles J. McCarthy Trustee of the Trust
181 Eton Road
Longmeadow, MA 01106
Age: 74
Proprietor, Synectics Financial Company (venture capital activities,
business consulting and investments); Trustee, MML Series Investment Fund
(open-end investment company).
John V. Murphy* Trustee of the Trust
1295 State Street
Springfield, MA 01111
Age:
Executive Vice President (since 1997) of MassMutual; Executive Vice
President, Director and Chief Operating Officer (1995-1997), David L.
Babson and Company Incorporated (investment adviser); Chief Operating
Officer (1993-1996), Concert Capital Management, Inc.; Senior Vice
President and Director (1995-1997), Potomac Babson Incorporated; Chief
Financial Officer (1985-1993), Liberty Financial Companies (financial
services); Director, Emerald Isle Bancorp and Hibernia Savings Bank
(wholly-owned subsidiary of Emerald Isle Bancorp).
John H. Southworth Trustee of the Trust
195 Eton Road
Longmeadow, MA 01106
Age: 70
Chairman (since 1993), Southworth Company (manufacturer of paper and
calendars); Director (since 1995), Trustee (until 1995), SIS Bank
(formerly, Springfield Institution for Savings); Trustee, MML Series
Investment Fund (open-end investment company).
Stuart H. Reese President of the Trust
1295 State Street
Springfield, MA 01111
Age: 42
Chief Executive Director (since 1997), Senior Vice President (1993-1997),
MassMutual; President (since 1993), MML Series Investment Fund (open-end
investment company); President (since 1995), Executive Vice President
(1993-1995), MassMutual Corporate Investors and MassMutual Participation
Investors (closed-end investment companies); Director (since 1996), Antares
Leveraged Capital Corp. (finance company) and Charter Oak Capital
Management, Inc. (investment adviser); President and Director (since 1996)
HYP Management, Inc. (managing member of MassMutual High Yield Partners
LLC), and MMHC Investment, Inc. (investor in MassMutual High Yield Partners
LLC); Director (since 1994), MassMutual Corporate Value Partners Limited
(investor in debt and equity securities) and MassMutual Corporate Value
Limited (parent of MassMutual Corporate Value Partners Limited);
Supervisory Director (since 1994), MassMutual/Carlson CBO (collateralized
bond fund); Director and Member of Investment Committee (since 1994), MML
Bay State Life Insurance Company (wholly-owned insurance subsidiary of
MassMutual); Director and Member of Investment and Auditing Committees, MML
Pension Insurance Company (wholly-owned insurance subsidiary of MassMutual
Holding Company Two MSC, Inc.); Director (since 1994), Pace Industries
(aluminum die caster); Chairman and President (1990-1993), Aetna Financial
Services, Inc.
- ---------------
* Trustee who is an "interested person" of the Trust within the definition set
forth in Section 2(a)(19) of the 1940 Act.
B-13
<PAGE>
Hamline C. Wilson Vice President and Chief Financial
1295 State Street Officer of the Trust
Springfield, MA 0111
Age: 60
Senior Managing Director (since 1996), Vice President and Managing Director
(1989-1996), MassMutual; Vice President and Chief Financial Officer, MML
Series Investment Fund, MassMutual Corporate Investors and MassMutual
Participation Investors.
Stephen L. Kuhn Vice President and Secretary
1295 State Street of the Trust
Springfield, MA 01111
Age: 51
Vice President and Associate General Counsel (since 1992), MassMutual; Vice
President and Secretary, MML Series Investment Fund, MassMutual
Participation Investors and MassMutual Corporate Investors; President,
MassMutual/Carlson CBO Incorporated; Chief Legal Officer and Assistant
Secretary (since 1995), DLB Acquisition Corporation (holding company for
investment advisers); Assistant Secretary (since 1997), Oppenheimer
Acquisition Corporation (investment advisor holding company).
Charles C. McCobb, Jr. Vice President of the Trust
1295 State Street
Springfield, MA 01111
Age: 54
Managing Director (since 1997), MassMutual; Managing Director/Vice
President (1994-1997), Citicorp; Managing Director/Vice President (1973-
1994), Aetna Life & Casualty Company.
Edmond F. Ryan Vice President of the Trust
1295 State Street
Springfield, MA 01111
Age: 49
Senior Vice President (since 1995), Vice President (1985-1995), MassMutual.
Raymond B. Woolson Treasurer of the Trust
1295 State Street
Springfield, MA 01111
Age: 39
Senior Managing Director (since 1996), Second Vice President (1992-1996),
MassMutual; Treasurer, MassMutual Corporate Investors and MassMutual
Participation Investors (closed-end investment companies); Treasurer (since
1996), MML Series Investment Fund (open-end investment company).
Mark B. Ackerman Comptroller of the Trust
1295 State Street
Springfield, MA 01111
Age: 32
Investment Director (since 1996), Associate Director (1993-1996),
MassMutual; Controller (since 1997), Associate Treasurer (1995-1997),
MassMutual Participation Investors and MassMutual Corporate Investors
(closed-end investment companies); Comptroller (since 1997), Associate
Treasurer (1995-1996), MML Series Investment Fund (open-end investment
company).
The Audit Committee makes recommendations to the Trustees as to the engagement
or discharge of the Trust's independent auditors, supervises investigations into
matters relating to audit functions, reviews with the Trust's independent
auditors the results of the audit engagement, and considers the audit fees. The
Nominating Committee consists of Trustees who are not "interested persons" (as
defined in the 1940 Act) of the Trust or any adviser and considers making all
nominations for non-interested members of the Board of Trustees. The selection
and nomination of management nominees for such vacancies is committed to the
discretion of the Nominating Committee. The Investment Pricing Committee
determines the fair value of securities for which market quotations are not
readily available.
B-14
<PAGE>
COMPENSATION
------------
The Trust, on behalf of the Fund, pays each of its Trustees who is not an
officer or employee of Massachusetts Mutual Life Insurance Company
(``MassMutual'') a fee of $2,000 per quarter plus $2,000 per meeting attended.
Such Trustees who serve on the Audit Committee of the Trust are paid an
additional fee of $1,000 per year. Such Trustees who serve on the Nominating
Committee or the Investment Pricing Committee are paid an additional fee of $500
per meeting attended. In addition, the Trust reimburses out-of-pocket business
travel expenses to such Trustees. Trustees who are officers or employees of
MassMutual receive no fees from the Trust.
COMPENSATION TABLE
------------------
The following table discloses the compensation paid to the Registrant's non-
interested trustees for the 1997 fiscal year. The Registrant has no pension,
retirement, or deferred compensation plans. All of the non-interested Trustees
also serve as Trustees or Advisory Board Members of one other investment company
managed by MassMutual. Total Compensation from Registrant and Fund Complex
reflects compensation paid in the 1997 fiscal year.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Total Compensation
Aggregate From Registrant and
Name/Position Compensation from Registrant Fund Complex
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Ronald J. Abdow $16,000 $32,000
Trustee
- ----------------------------------------------------------------------------------------------------------
Richard H. Ayers 5,674 13,674
Trustee
- ----------------------------------------------------------------------------------------------------------
Mary E. Boland 16,000 32,000
Trustee
- ----------------------------------------------------------------------------------------------------------
David E. A. Carson 5,674 13,674
Trustee
- ----------------------------------------------------------------------------------------------------------
Richard W. Greene 5,674 13,674
Trustee
- ----------------------------------------------------------------------------------------------------------
Beverly C. L. Hamilton 5,674 13,674
Trustee
- ----------------------------------------------------------------------------------------------------------
F. William Marshall, Jr. 16,000 31,333
Trustee
- ----------------------------------------------------------------------------------------------------------
Charles J. McCarthy 17,000 34,000
Trustee
- ----------------------------------------------------------------------------------------------------------
John H. Southworth 17,000 63,098*
Trustee
*Includes deferred compensation
plan benefits received from
other investment company in
Fund Complex.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
The officers and Trustees of the Trust as a group own less than 1% of any class
of any series of outstanding shares of the Trust.
The Trust's shareholders have the right, upon the declaration in writing or vote
of at least two-thirds of the votes represented by its outstanding shares, to
remove a Trustee. The Trustees shall call a meeting of shareholders to vote on
the removal of a Trustee upon the written request of the record holders of
shares representing at least 10% of all of the votes represented by all
outstanding shares of the Trust. In addition, whenever ten or more shareholders
of record who have been such for at least six months preceding the date of
application, and who hold in the aggregate either shares having a net asset
value of at least $25,000 or at least 1% of the Trust's outstanding shares,
whichever is less, shall apply to the Trustees in writing, stating that they
wish to communicate with other shareholders with a view to obtaining signatures
for a request for a meeting for the purpose of voting upon the question of
removal of
B-15
<PAGE>
any Trustee or Trustees and accompanied by the form of communication and request
which they wish to transmit, the Trustees shall within five business days after
receipt of such application either: (1) afford to such applicants access to a
list of the names and addresses of all shareholders as recorded on the books of
the Trust; or (2) inform such applicants as to the approximate number of
shareholders of record, and the approximate cost of mailing to them the proposed
communication and form of request. If the Trustees elect to follow the latter
course, the Trustees, upon the written request of such applicants, accompanied
by a tender of the material to be mailed and of the reasonable expenses of
mailing, shall, with reasonable promptness, mail such material to all
shareholders of record at their addresses as recorded on the books of the Trust,
unless within five business days after such tender the Trustees shall mail to
such applicants and file with the SEC, together with a copy of the material to
be mailed, a written statement signed by at least a majority of the Trustees to
the effect that in their opinion either such material contains untrue statements
of fact or omits to state facts necessary to make the statements contained
therein not misleading, or would be in violation of applicable law, and
specifying the basis of such opinion.
After opportunity for hearing regarding the objections specified in the written
statement so filed, the SEC may, and if demanded by the Trustees or by such
applicants shall, enter an order either sustaining one or more of such
objections, or refusing to sustain any of them. If the SEC shall enter an order
refusing to sustain any such objections or if, after the entry of an order
sustaining one or more of such objections, the SEC shall find, after notice and
opportunity for hearing, that all objections so sustained have been met, and
shall enter an order so declaring, the Trustees shall mail copies of such
material to all shareholders with reasonable promptness after the entry of such
order and the renewal of such tender.
On any matters submitted to a vote of shareholders, all shares of the Trust then
entitled to vote shall be voted in the aggregate as a single class without
regard to series of the Trust or class, except that: (i) when required by the
1940 Act or when the Trustees shall have determined that the matter affects one
or more of the series or classes materially differently, shares will be voted by
individual series or class; and (ii) when the Trustees have determined that any
matter affects only the interests of one or more series or classes, then only
shareholders of such series or class shall be entitled to vote thereon.
Shareholder inquiries should be directed to MassMutual Institutional Funds, 1295
State Street, Springfield, Massachusetts 01111.
CONTROL PERSON AND PRINCIPAL HOLDER OF SECURITIES
-------------------------------------------------
It is anticipated that MassMutual, through its separate investment accounts and
any direct investment in the Trust, will own 100% of the shares of each class of
each series of the Trust as of the date of this Statement of Additional
Information.
FUND ADMINISTRATOR AND SUB-ADMINISTRATOR
----------------------------------------
MassMutual has entered into an administrative services agreement
("Administrative Services Agreement") with the Fund pursuant to which MassMutual
is obligated to provide all necessary administrative and shareholder services
and to bear some Class expenses, such as federal and state registration fees,
printing and postage. MassMutual may, at its expense, employ others to supply
all or any part of the services to be provided to the Fund pursuant to the
Administrative Services Agreement. The Trust, on behalf of the Fund, pays
MassMutual an administrative services fee monthly at an annual rate based upon
the average daily net assets of the applicable class of shares of the Fund equal
to .7688% for Class A shares; .5688% for Class Y shares; and .3588% for
Class S shares. MassMutual has entered into a sub-administration agreement with
Investors Bank & Trust Company ("IBT"). As sub-administrator, IBT generally
assists in all aspects of fund administration. IBT is compensated by MassMutual
for providing administrative services to the Fund. IBT also serves as the
sub-administrator to the Master Portfolio and is compensated by BGI (defined
below) for providing administrative services to the Master Portfolio.
THE DISTRIBUTOR
---------------
The Trust's shares are continuously distributed by OppenheimerFunds Distributor,
Inc. (the "Distributor") pursuant to an amended and restated Distribution
Agreement with the Trust dated December 1, 1997 (the "Distribution Agreement").
The Distributor pays commissions to its selling dealers as well as the cost of
printing and mailing Prospectuses to potential investors and of any advertising
incurred by it in connection with distribution of shares of the Fund. MML
Investors Services, Inc. serves as the sub-distributor to the Trust pursuant to
an agreement with the Distributor dated September 8, 1994.
B-16
<PAGE>
The Distribution Agreement will continue in effect for successive one-year
periods, provided that each such continuance is specifically approved (i) by the
vote of a majority of the Trustees or by a vote of a majority of the shares of
the Trust; and (ii) by a majority of the Trustees who are not parties to the
Distribution Agreement or interested persons (as defined in the 1940 Act) of any
such person, cast in person at a meeting called for the purpose of voting on
such approval.
CLASS A SERVICE PLAN
--------------------
The Trust has adopted, with respect to the Class A shares of the Fund, a Service
Plan and Agreement (the "Plan") pursuant to rule 12b-1 under the 1940 Act. The
Trustees of the Trust, including a majority of the Trustees who are not
interested persons of the Trust and who have no direct or indirect financial
interest in the operation of the Plan, by vote cast in person at a meeting
called for the purpose of voting on the Plan, approved the Plan on August 4,
1997. Under the terms of the Plan, the Trust is permitted to compensate, out of
the assets attributable to the Class A shares of the Fund, in an amount up to
0.25% on an annual basis of the average daily net assets attributable to that
class, MassMutual for services provided and expenses incurred by it for purposes
of maintaining or providing personal services (the "Servicing Fee") to Class A
shareholders. The Servicing Fee may be spent by MassMutual on personal services
rendered to Class A Shareholder accounts. MassMutual's Servicing Fee
expenditures may include, but shall not be limited to, compensation to, and
expenses (including telephone and overhead expenses) of agents or employees of
MassMutual, the Fund's Distributor or Sub-Distributor, pension consultants or
participating or introducing brokers and other financial intermediaries who
assist investors in completing account forms and selecting dividend and other
account options; who aid in the process of redemption requests for Class A
shares or the processing of dividend payments with respect to Class A shares;
who prepare print and deliver prospectuses and shareholder reports to
shareholders; who oversee compliance with federal and state laws pertaining to
the sale of Class A shares; who provide information periodically to Class A
shareholders showing their position in Class A shares; who furnish shareholder
sub-accounting; who issue account statements to Class A shareholders; who
forward communications from the Fund to Class A shareholders; who render advice
regarding the particular shareholder account options offered by the Fund in
light of shareholder needs; who provide and maintain elective shareholder
services; who provide and maintain pre-authorized investment plans for Class A
shareholder; who respond to inquiries from Class A shareholders relating to such
services; or who provide such similar services as permitted under applicable
statutes, rules or regulations.
The Plan provides that it may not be amended to materially increase the costs
which Class A shareholders may bear under the Plan without the approval of a
majority of the outstanding Class A shares of the Fund.
The Plan provides that it may not take effect until approved by vote of a
majority of both (i) the Trustees of the Trust and (ii) the Trustees of the
Trust who are not interested persons of the Trust and have no direct or indirect
financial interest in the operation of the Plan or any agreements related to it.
The Plan provides that it shall continue in effect so long as such continuance
is specifically approved at least annually by (i) Trustees of the Trust and (ii)
the Trustees of the Trust who are not interested persons of the Trust and have
no direct or indirect financial interest in the operation of the Plan or any
agreements related to it. The Plan provides that MassMutual shall provide to the
Trustees, and the Board shall review at least quarterly, a written report of the
amounts so expended and the purposes for which such expenditures were made.
The Conduct Rules of the NASD limit the amount of distribution fees that may be
paid by mutual funds. "Service fees," defined to mean fees paid for providing
shareholder services or the maintenance of accounts (but not transfer agency
services) are not subject to the limits. The Trust believes that all of the
fees paid pursuant to the Plan will qualify as "service fees" and therefore
will not be limited by NASD rules.
The Plan was not in effect prior to the date of this Statement of Additional
Information and no payments were made thereunder in prior fiscal periods.
CUSTODIAN, DIVIDEND DISBURSING AGENT AND TRANSFER AGENT
-------------------------------------------------------
IBT, located at 200 Clarendon Street, Boston, Massachusetts 02116, is the
custodian of the Fund's investments (the "Custodian") and is the Fund's transfer
agent and dividend disbursing agent (the "Transfer Agent"). The Custodian and
the Transfer Agent do not assist in, and are not responsible for, the investment
decisions and policies of the Fund.
INDEPENDENT PUBLIC ACCOUNTANT
-----------------------------
Coopers & Lybrand L.L.P., located at 2300 BayBank Tower, 1500 Main Street,
Springfield, Massachusetts 01101, is the Trust's independent public accountant.
B-17
<PAGE>
INVESTMENT ADVISER AND OTHER MASTER PORTFOLIO SERVICE PROVIDERS
---------------------------------------------------------------
The following information supplements and should be read in conjunction with
information set forth in the Prospectus regarding the investment adviser and
other service providers of the Master Portfolio.
Investment Adviser
BGFA provides investment advisory services to the Master Portfolio pursuant to
an Investment Advisory Contract (the "BGFA Advisory Contract") with MIP, dated
January 1, 1996. For providing these investment advisory services, BGFA is
entitled to receive monthly fees at the annual rate of 0.05% of the average
daily net assets of the Master Portfolio. As to the Master Portfolio, the BGFA
Advisory Contract is subject to annual approval by (i) MIP's Board of Trustees
or (ii) vote of a majority of the outstanding voting securities of the Master
Portfolio, provided that in either event the continuance also is approved by a
majority of MIP's Board of Trustees who are not "interested persons" (as
defined in the 1940 Act) of MIP or BGFA, by vote cast in person at a meeting
called for the purpose of voting on such approval. As to the Master Portfolio,
the BGFA Advisory Contract is terminable without penalty, on 60 days' written
notice, by either party. The BGFA Advisory Contract will terminate
automatically, in the event of its assignment (as defined in the 1940 Act).
Prior to January 1, 1996, Wells Fargo Bank provided investment advisory services
to the Master Portfolio pursuant to an Investment Advisory Agreement (the
"Advisory Agreement") dated February 25, 1994 with MIP. The terms of the
Advisory Agreement were identical in all material respects, other than the
identity of the parties, to the BGFA Advisory Contract.
For the period beginning May 26, 1994 (commencement of operations) and ended
February 28, 1995 and the period beginning March 1, 1995 and ended December 31,
1995, the Master Portfolio paid the following advisory fees to Wells Fargo Bank
and Wells Fargo Bank waived the indicated amounts. For the period beginning
January 1, 1996 and ended February 29, 1996, and the year ended February 28,
1997, the Master Portfolio paid the following advisory fees to BGFA, without
waivers:
<TABLE>
<CAPTION>
May 26, 1994 - March 1, 1995 - January 1, 1996 - Year Ended
February 28, 1995 December 31, 1995 February 29, 1996 February 28, 1997
Fees Paid Fees Waived Fees Paid Fees Waived Fees Paid Fees Paid
--------- ----------- --------- ----------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Master Portfolio $138,830 $17,864 $279,843 $0 $73,598 $577,637
</TABLE>
Sub-Investment Adviser. The Master Portfolio does not currently engage a
sub-adviser. However, prior to January 1, 1996, Wells Fargo Nikko Investment
Advisers ("WFNIA") provided sub-investment advisory services to the Master
Portfolio pursuant to a SubInvestment Advisory Agreement dated February 25, 1994
with Wells Fargo Bank and MIP. For the period from May 26, 1994 (commencement
of operations) to February 28, 1995, and the period beginning March 1, 1995 and
ended December 31, 1995, Wells Fargo Bank paid sub-advisory fees (without
waivers) of $117,651 and $224,069, respectively, to WFNIA for services provided
on behalf of the Master Portfolio.
Other Service Providers
Co-Administrators. Stephens and Barclays Global Investors, N.A. ("BGI") are
the Master Portfolio's co-administrators. Stephens and BGI provide the Master
Portfolio with administrative services, including general supervision of the
Master Portfolio's non-investment operations, coordination of the other services
provided to the Master Portfolio, compilation of information for reports to the
SEC and the state securities commissions, preparation of proxy statements and
shareholder reports, and general supervision of data compilation in connection
with preparing periodic reports to MIP's trustees and officers. Stephens
also furnishes office space and certain facilities to conduct the Master
Portfolio's business, and compensates MIP's trustees, officers and employees who
are affiliated with Stephens. Stephens and BGI are not entitled to compensation
for providing administration services to the Master Portfolio. BGI has delegated
certain of its duties as co-administrator to IBT. IBT, as sub-administrator, is
compensated by BGI for performing certain administration services.
B-18
<PAGE>
Prior to October 21, 1996, Stephens alone provided administration services to
MIP pursuant to an Administration Agreement dated February 25, 1994. Stephens
was not entitled to compensation for providing administrative services to the
Master Portfolio so long as Stephens received fees for providing similar
services to a feeder fund of another investment company investing all of its
assets in the Master Portfolio. The Master Portfolio did not pay any
administration fees to Stephens.
Placement Agent. Stephens is the placement agent for the Master Portfolio.
Stephens is a full service broker/dealer and investment advisory firm located at
111 Center Street, Little Rock, Arkansas 72201. Stephens and its predecessor
have been providing securities and investment services for more than 60 years,
including discretionary portfolio management services since 1983. Stephens
currently manages investment portfolios for pension and profit sharing plans,
individual investors, foundations, insurance companies and university
endowments. Stephens does not receive compensation for acting as placement
agent. Registered broker/dealers and investment companies, insurance company
separate accounts, common and commingled trust funds, group trust and similar
organizations and entities which constitute accredited investors, as defined in
the regulations adopted under the Securities Act of 1933, as amended, may
continuously invest in the Master Portfolio of MIP.
Custodian. IBT currently acts as the Master Portfolio's custodian. The principal
business address of IBT is 200 Clarendon Street, Boston, Massachusetts 02116.
Prior to October 21, 1996, BGI acted as the Master Portfolio's custodian. The
principal business address of BGI is 45 Fremont Street, San Francisco,
California 94105. BGI did not receive compensation for its custodial
services.
Transfer and Dividend Disbursing Agent. Wells Fargo Bank is the Master
Portfolio's transfer and dividend disbursing agent. The principle business
address of Wells Fargo Bank is 525 Market Street, San Francisco, California
94105. Wells Fargo Bank is not entitled to receive compensation for providing
such services to MIP so long as it receives fees for providing similar services
to the funds which invest substantially all of their assets in the Master
Portfolio. To date, the Master Portfolio has not paid any transfer and dividend
disbursing agency fees.
Independent Auditor. KPMG Peat Marwick LLP has been selected as the independent
auditor for MIP. KPMG Peat Marwick LLP's address is Three Embarcadero Center,
San Francisco, California 94111.
PORTFOLIO TRANSACTIONS AND BROKERAGE
------------------------------------
BGFA assumes general supervision over placing orders on behalf of the Master
Portfolio for the purchase or sale of portfolio securities. Allocation of
brokerage transactions, including their frequency, is made in the best judgment
of BGFA and in a manner deemed fair and reasonable to shareholders. In executing
portfolio transactions and selecting brokers or dealers, BGFA seeks to obtain
the best overall terms available for the Master Portfolio. In assessing the
best overall terms available for any transaction, BGFA considers factors deemed
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. The primary consideration is prompt
execution of orders at the most favorable net price. Certain of the brokers or
dealers with whom the Master Portfolio may transact business offer commission
rebates to the Master Portfolio. BGFA considers such rebates in assessing the
best overall terms available for any transaction. The overall reasonableness of
brokerage commissions paid is evaluated by BGFA based upon its knowledge of
available information as to the general level of commissions paid by other
institutional investors for comparable services. Prior to January 1, 1996,
WFNIA exercised general supervision over placing orders on behalf of the Master
Portfolio for the purchase or sale of portfolio securities and the brokerage
allocation practices described herein were applicable to WFNIA and the Master
Portfolio prior to January 1, 1996.
Brokers also are selected because of their ability to handle special executions
such as are involved in large block trades or broad distributions, provided the
primary consideration is met. Portfolio turnover may vary from year to
B-19
<PAGE>
year, as well as within a year. High turnover rates over 100% are likely to
result in comparatively greater brokerage expenses.
For the period from commencement of operations until February 28, 1995 and for
the years ended February 29, 1996 and February 28, 1997, the Master Portfolio
paid brokerage commissions of $244,742 in 1995, $80,902 in 1996, and $69,826 in
1997. None of the brokerage commissions were paid to affiliated brokers. On
February 28, 1997, the Master Portfolio did not own securities of its ``regular
brokers or dealers" or their parents, as defined in the 1940 Act.
SHAREHOLDER INVESTMENT ACCOUNT
------------------------------
A Shareholder Investment Account is established for each Investor in the
Fund./1/ Each account contains a record of the shares of the Fund maintained by
the Fund's Transfer Agent. No share certificate will be issued. Whenever a
transaction takes place in the Shareholder Investment Account, the Investor will
be mailed a statement showing the transaction and the status of the account.
REDEMPTION OF SHARES
--------------------
With respect to the Fund, the Trustees may suspend the right of redemption,
postpone the date of payment or suspend the determination of net asset value (a)
for any period during which the New York Stock Exchange ("NYSE") is closed
(other than for customary weekend and holiday closing), (b) for any period
during which trading in the markets the Fund normally uses is restricted, (c)
when an emergency exists as determined by the SEC so that disposal of the Fund's
investments or a determination of its net asset value is not reasonably
practicable, or (d) for such other periods as the SEC by order may permit for
the protection of the Trust's shareholders. While the Trust's Declaration of
Trust would permit it to redeem shares in cash or other assets of the Fund or
both, the Trust has filed an irrevocable election with the SEC to pay in cash
all requests for redemption received from any shareholder if the aggregate
amount of such requests in any 90-day period does not exceed the lesser of
$250,000 or 1% of the Fund's net assets.
VALUATION OF PORTFOLIO SECURITIES
---------------------------------
The net asset value per share of the Fund is determined by the Fund's Custodian
at 4:00 p.m. Eastern Time, on each day the NYSE is open for trading and the
Custodian is open for business. The NYSE currently is not open for trading on
New Year's Day, Martin Luther King, Jr. Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
and on occasion is closed early or entirely due to weather or other
conditions.
The securities of the Master Portfolio, including covered call options written
by the Master Portfolio, are valued as discussed below. Domestic securities are
valued at the last sale price on the domestic securities or commodities exchange
or national securities market on which such securities primarily are traded.
Securities not listed on a domestic exchange or national securities market, or
securities in which there were no transactions, are valued at the most recent
bid prices. Portfolio securities which are traded primarily on foreign
securities or commodities exchanges generally are valued at the preceding
closing values of such securities on their respective exchanges, except that
when an occurrence subsequent to the time a value was so established is likely
to have changed such value, then the fair value of those securities is
determined by BGFA in accordance with guidelines approved by MIP's Board of
Trustees. Short-term investments are carried at amortized cost, which
approximates value. Any securities or other assets for which recent market
quotations are not readily available are valued at fair value as determined in
good faith by BGFA in accordance with such guidelines.
Restricted securities, as well as securities or other assets for which market
quotations are not readily available, or are not valued by a pricing service
approved by MIP's Board of Trustees, are valued at fair value as determined in
good faith by BGFA in accordance with guidelines approved by MIP's Board of
Trustees. BFGA and MIP's Board of
- --------------
/1/ "Investor" includes a plan sponsor, plan fiduciary, trustee, institutional
investor, insurance company separate investment account and/or any other person
or entity described in the Prospectus as an eligible purchase of shares, that
purchases shares of the Trust. An Investor that is a separate investment account
of MassMutual is referred to as a "SIA Investor." Investors that are purchasing
shares of a fund on behalf of a Plan are sometimes referred to as "Plan
Investors." The term Investor does not include a Plan Participant.
B-20
<PAGE>
Trustees periodically review the method of valuation. In making its good faith
valuation of restricted securities, BGFA generally takes the following factors
into consideration: restricted securities which are, or are convertible into,
securities of the same class of securities for which a public market exists
usually will be valued at market value less the same percentage discount at
which purchased. This discount is revised periodically if it is believed that
the discount no longer reflects the value of the restricted securities.
Restricted securities not of the same class as securities for which a public
market exists usually are valued initially at cost. Any subsequent adjustment
from cost is based upon considerations deemed relevant by MIP's Board of
Trustees.
The proceeds received by the Fund for each issue or sale of its shares, and all
net investment income, realized and unrealized gain will be specifically
allocated to the Fund and constitute the underlying assets of the Fund. The
underlying assets of the Fund will be segregated on the books of account, and
will be charged with the liabilities in respect of the Fund and with a share of
the general liabilities of the Trust. Expenses with respect to any two or more
series of the Trust are to be allocated in proportion to the net asset values of
the respective series except where allocations of direct expenses can otherwise
be fairly made. Each class of shares of the Fund will be charged with
liabilities directly attributable to such class, and other Fund expenses are to
be allocated in proportion to the net asset values of the respective
classes.
DESCRIPTION OF FUND SHARES
--------------------------
Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the Trust's
Declaration of Trust disclaims liability of the shareholders, Trustees, or
officers of the Trust for acts or obligations of the Trust, which are binding
only on the assets and property of the Trust, and requires that notice of such
disclaimer be given in each agreement, obligation, or instrument entered into or
executed by the Trust or the Trustees. The Trust's Declaration of Trust
provides for indemnification out of the Trust property for all loss and expense
of any shareholder held personally liable for the obligations of the Trust.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is considered remote since it is limited to circumstances
in which the disclaimer is inoperative and the Trust itself is unable to meet
its obligations.
MASTER PORTFOLIO ORGANIZATION
-----------------------------
The Master Portfolio is a series of MIP, an open-end, series management
investment company organized as a Delaware business trust. MIP was organized on
October 21, 1993. In accordance with Delaware law and in connection with the
tax treatment sought by MIP, MIP's Declaration of Trust provides that its
investors are personally responsible for MIP liabilities and obligations, but
only to the extent MIP's property is insufficient to satisfy such liabilities
and obligations. MIP's Declaration of Trust also provides that MIP must
maintain appropriate insurance (for example, fidelity bonding and errors and
omissions insurance) for the protection of MIP, its investors, trustees,
officers, employees and agents covering possible tort and other liabilities, and
that investors will be indemnified to the extent they are held liable for a
disproportionate share of MIP's obligations. Thus, the risk of an investor
incurring financial loss on account of investor liability is limited to
circumstances in which both inadequate insurance existed and MIP itself was
unable to meet its obligations.
MIP's Declaration of Trust further provide that obligations of MIP are not
binding upon its trustees individually but only upon the property of MIP and
that the trustees will not be liable for any action or failure to act, but
nothing in the Declarations of Trust protects a trustee against any liability to
which the trustee would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties involved in the
conduct of the trustee's office.
Pursuant to MIP's Declaration of Trust, MIP's Trustees are authorized to issue
shares of beneficial interests in the Master Portfolio. Investors are entitled
to participate pro rata in distributions of taxable income, loss, gain and
credit of the Master Portfolio. Upon liquidation or dissolution of the Master
Portfolio, investors are entitled to share pro rata in the Master Portfolio's
net assets available for distribution to its investors. Investments in the
Master Portfolio have no preference, preemptive, conversion or similar rights
and are fully paid and non-assessable, except as set forth below. Investments in
the Master Portfolio may not be transferred. No certificates are issued.
Each investor is entitled to vote, with respect to matters affecting MIP's
portfolios, in proportion to the amount of its investment in MIP. Investors in
MIP do not have cumulative voting rights, and investors holding more than 50%
of
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<PAGE>
the aggregate beneficial interest in MIP may elect all of the Trustees of MIP if
they choose to do so and in such event the other investors in MIP would not be
able to elect any Trustee. MIP is not required to hold annual meetings of
investors but MIP may hold special meetings of investors when in the judgment of
MIP's Trustees it is necessary or desirable to submit matters for an investor
vote.
Rule 18f-2 under the 1940 Act provides that any matter required to be submitted
under the provisions of the 1940 Act or applicable state law or otherwise to the
holders of the outstanding voting securities of an investment company, such as
MIP, will not be deemed to have been effectively acted upon unless approved by
the holders of a majority of the outstanding shares of each series of MIP
affected by such matter. Rule 18f-2 further provides that the Master Portfolio
shall be deemed to be affected by a matter unless it is clear that the interests
of the Master Portfolio in the matter are identical or that the matter does not
affect any interest of the Master Portfolio. However, the Rule exempts the
selection of independent accountants and the election of trustees from the
separate voting requirements of the Rule.
Whenever the Fund is requested to vote on a matter with respect to the Master
Portfolio, the Fund will either hold a meeting of Fund shareholders and will
cast its votes as instructed by such shareholders, or vote the shares of the
Master Portfolio held by it in the same proportion as the vote of all other
holders of such security. If the Fund is requested to vote on matters pertaining
to the Master Portfolio and the Fund holds a meeting of the Fund's shareholders,
the Trustees of the Trust will vote shares for which they receive no voting
instructions in the same proportion as the shares for which they do receive
voting instructions.
As of December 31, 1997, the S&P 500 Stock Fund of MasterWorks Funds, Inc., 111
Center Street, Little Rock, Arkansas 72201, owned approximately 94% of the
outstanding voting securities of the Master Portfolio and could be considered a
"controlling person" of the Master Portfolio for purposes of the 1940 Act.
INVESTMENT PERFORMANCE
----------------------
The total return figures for the Fund may be provided in reports, sales
literature and advertisements. Total return quotations will be based upon a
stated period and will be computed by determining the average annual compounded
rate of return over the stated period that would equate an initial amount
invested to the ending redeemable value of the investment (assuming reinvestment
of all distributions), according to the following formula:
P(1 + T)/n/ = ERV
Where: P = a hypothetical initial payment of $1000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value at the end of the stated period of a
hypothetical $1000 payment made at the beginning of the stated
period.
For periods prior to March 1, 1998 (the commencement of the Fund's operations),
the Fund calculates the performance of each class by including the corresponding
total return of the Master Portfolio and its predecessor adjusted to reflect the
deduction of anticipated fees and expenses applicable to each Class of the Fund
as stated in the fee table contained in the Prospectus.
The Fund's total return is not fixed or guaranteed and the Fund's principal is
not insured. Investment performance quotations should not be considered to be
representations of the performance for any period in the future. Total return
is a function of the value of the Fund's investment in the Master Portfolio over
time, which may be expected to fluctuate, as well as of income earned by the
Fund on such securities and of the Fund's operating expenses.
Performance Comparisons. From time-to-time and only to the extent the comparison
is appropriate for the Fund, the Trust may quote the performance of the Fund in
advertising and other types of literature and may compare the performance of the
Fund to the performance of various indices and investments for which reliable
performance data is available. The performance of the Fund may be compared in
advertising and other literature to averages, performance rankings and other
information prepared by recognized mutual fund statistical services.
Performance information for the Fund may be compared, in reports and promotional
literature, to the S&P 500 Index, the Wilshire 5000 Equity Index, the Lehman
Brothers 20+ Treasury Index, Donoghue's Money Fund Averages, the Lehman Brothers
5-7 Year Treasury Index, Lehman Brothers Government Bond Index, Lehman Brothers
Treasury Bond Index, Lipper Balanced Fund Average, Lipper Growth Fund Average,
Lipper Flexible Portfolio Fund Average, Lehman Brothers Intermediate Treasury
Index, 91-Day Treasury Bill Average, or other
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<PAGE>
appropriate managed or unmanaged indices of the performance of various types of
investments, so that investors may compare the Fund's results with those of
indices widely regarded by investors as representative of the security markets
in general. Unmanaged indices may assume the reinvestment of dividends, but
generally do not reflect deductions for administrative and management costs and
expenses. Managed indices generally do reflect such deductions.
The Trust also may use the following information in advertisements and other
types of literature, only to the extent the information is appropriate for the
Fund: (1) the Consumer Price Index may be used to assess the real rate of
return from an investment in the Fund; (2) other government statistics,
including, but not limited to, The Survey of Current Business, may be used to
illustrate investment attributes of the Fund or the general economic, business,
investment, or financial environment in which the Fund operates; (3) the effect
of tax-deferred compounding on the investment returns of the Fund, or on returns
in general, may be illustrated by graphs, charts, etc., where such graphs or
charts would compare, at various points in time, the return from an investment
in the Fund (or returns in general) on a tax-deferred basis (assuming
reinvestment of capital gains and dividends and assuming one or more tax rates)
with the return on a taxable basis; and (4) the sectors or industries in which
the Fund invests may be compared to relevant indices of stocks or surveys (e.g.,
S&P Industry Surveys) to evaluate the Fund's historical performance or current
or potential value with respect to the particular industry or sector.
The Fund's performance also may be compared to those of other mutual funds
having similar objectives. This comparative performance could be expressed as a
ranking prepared by Lipper Analytical Services, Inc., (including the Lipper
General Bond Fund Average, the Lipper Intermediate Investment Grade Debt Fund
Average, the Lipper Bond Fund Average, the Lipper Growth Fund Average, the
Lipper Flexible Fund Average), Donoghue's Money Fund Report, including
Donoghue's Taxable Money Market Fund Average, or Morningstar, Inc., independent
services which monitor the performance of mutual funds. The Fund's performance
will be calculated by relating net asset value per share at the beginning of a
stated period to the net asset value of the investment, assuming reinvestment of
all gains distributions and dividends paid, at the end of the period. Any such
comparisons may be useful to investors who wish to compare the Fund's past
performance with that of its competitors. Of course, past performance cannot be
a guarantee of future results.
In addition, MIP also may use, in advertisements and other types of literature,
information and statements: (1) showing that bank savings accounts offer a
guaranteed return of principal and a fixed rate of interest, but no opportunity
for capital growth; and (2) describing BGFA, and its affiliates and
predecessors, as one of the first investment managers to advise investment
accounts using asset allocation and index strategies. MIP also may include in
advertising and other types of literature information and other data from
reports and studies prepared by the Tax Foundation, including information
regarding federal and state tax levels and the related "Tax Freedom Day." MIP
also may disclose in advertising and other types of sales literature the assets
and categories of assets under management by the Master Portfolio's investment
adviser, any sub-investment adviser or their affiliates.
Other Advertising Items. The Trust may discuss in advertising and other types
of literature that the Fund has been assigned a rating by a nationally
recognized statistical rating organization ("NRSRO"), such as Standard &
Poor's Corporation. Such rating would assess the creditworthiness of the
investments held by the Fund. The assigned rating would not be a recommendation
to purchase, sell or hold the Fund's shares since the rating would not comment
on the market price of the Fund's shares or the suitability of the Fund for a
particular investor. In addition, the assigned rating would be subject to
change, suspension or withdrawal as a result of changes in, or unavailability
of, information relating to the Fund or its investments. The Trust may compare
the Fund's performance with other investments which are assigned ratings by
NRSROs. Any such comparisons may be useful to investors who wish to compare the
Fund's past performance with other rated investments. Of course past
performance cannot be a guarantee of future results. General mutual fund
statistics provided by the Investment Company Institute may also be used.
B-23
<PAGE>
TAXATION
--------
The Fund intends to qualify each year and elect to be taxed as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). The Fund seeks to qualify as a regulated investment
company by investing all of its assets in the Master Portfolio and consequently
all references to the Fund's assets and activities will be to those of the
Master Portfolio. In order to qualify as a "regulated investment company,"
the Fund must, among other things: (a) derive at least 90% of its gross income
from dividends, interest, payments with respect to securities loans, gains from
the sale or other disposition of stock, securities, or foreign currencies, and
other income (including gains from forward contracts) derived with respect to
its business of investing in such stock, securities, or currencies; and (b)
diversify its holdings so that, at the close of each quarter of its taxable
year, (i) at least 50% of the value of its total assets consists of cash, cash
items, U.S. Government securities, and other securities limited generally with
respect to any one issuer to not more than 5% of the total assets of the Fund
and not more than 10% of the outstanding voting securities of such issuer, and
(ii) not more than 25% of the value of its total assets is invested in the
securities of any issuer (other than U.S. Government securities). If the Fund
fails to qualify as a regulated investment company, it will be treated as an
ordinary corporation for federal income tax purposes.
As a regulated investment company electing to have its tax liability determined
under Subchapter M, in general the Fund will not be subject to federal income
tax on its ordinary income or capital gains that are distributed. As a
Massachusetts business trust, the Fund under present law will not be subject to
any excise or income taxes imposed by Massachusetts.
An excise tax at the rate of 4% will be imposed on the excess, if any, of the
Fund's "required distribution" over its actual distributions in any calendar
year. Generally, the "required distribution" is 98% of the Fund's ordinary
income for the calendar year plus 98% of its capital gain net income recognized
during the one-year period ending on October 31 (or December 31, if the Fund so
elects) plus undistributed amounts from prior years. The Fund intends to make
distributions sufficient to avoid imposition of the excise tax. Distributions
declared by the Fund during October, November or December to shareholders of
record on a date in any such month and paid by the Fund during the following
January will be treated for federal tax purposes as paid by the Fund and
received by shareholders on December 31 of the year in which declared.
Except in the case of certain shareholders eligible for preferential tax
treatment, e.g., qualified retirement or pension trusts, shareholders of the
Fund will be subject to federal income taxes on distributions made by the Fund
whether received in cash or additional shares of the Fund. Distributions by the
Fund of net income and short-term capital gains, if any, will be taxable to
shareholders as ordinary income. Designated distributions of long-term capital
gains, if any, will be taxable to shareholders as long-term capital gains,
without regard to how long a shareholder has held shares of the Fund. Under the
Taxpayer Relief Act of 1997, long-term capital gains generally will be subject
to a 28% or 20% tax rate, depending on the holding period in the portfolio
investment.
Dividends and distributions on Fund shares received shortly after their
purchase, although in effect a return of capital, are subject to federal income
taxes. Investment income and gains received by the Fund from sources outside
the United States might be subject to foreign taxes which are withheld at the
source. The effective rate of these foreign taxes cannot be determined in
advance because it depends on the specific countries in which its assets will be
invested, the amount of the assets invested in each such country and the
possible applicability of treaty relief.
Redemptions and exchanges of the Fund's shares are taxable events and,
accordingly, shareholders subject to federal income taxes may realize gains and
losses on these transactions. If shares have been held for more than one year,
gain or loss realized will be long-term capital gain or loss, provided the
shareholder holds the shares as a capital asset. Under the Taxpayer Relief Act
of 1997, long-term capital gains generally will be subject to a 28% or 20% tax
rate depending on the Investor's holding period in Fund shares. However, a loss
on the sale of shares held for six months or less will be treated as a long-term
capital loss to the extent of any long-term capital gain dividend paid to the
shareholder with respect to such shares. Furthermore, no loss will be allowed
on the sale of Fund shares to the extent the shareholder acquired other shares
of the same Fund within 30 days prior to the sale of the loss shares or 30 days
after such sale. The state and local tax effects of distributions received from
the Fund, and any special tax considerations associated with foreign investments
of the Fund, should be examined by investors with regard to their own tax
situation.
B-24
<PAGE>
The Fund's transactions through the Master Portfolio in foreign currency-
denominated debt instruments and its hedging activities will likely produce a
difference between its book income and its taxable income. This difference may
cause a portion of the Fund's distributions of book income to constitute returns
of capital for tax purposes or require the Fund to make distributions exceeding
book income in order to permit the Fund to continue to qualify, and be taxed
under Subchapter M of the Code, as a regulated investment company.
Under federal income tax law, a portion of the difference between the purchase
price of zero-coupon securities in which the Fund has invested through the
Master Portfolio and their face value ("original issue discount") is considered
to be income to the Fund each year even though the Fund will not receive cash
interest payments from these securities. This original issue discount (imputed
income) will make up a part of the net investment income of the Fund which must
be distributed to shareholders in order to maintain the qualification of the
Fund as a regulated investment company and to avoid federal income tax at the
level of the Fund.
The foregoing is a general and abbreviated summary of the applicable provisions
of the Code and regulations currently in effect. For the complete provisions,
reference should be made to the pertinent Code sections and regulations. The
Code and regulations are subject to change by legislative or administrative
action. This discussion of the federal income tax treatment of the Fund and its
shareholders does not describe in any respect the tax treatment of any
particular arrangement, e.g., tax-exempt trusts or insurance products, pursuant
to which or by which investments in the Fund may be made.
The name MassMutual Institutional Funds is the designation of the Trustees under
a Declaration of Trust dated May 28, 1993, as amended from time to time. The
obligations of the Trust are not personally binding upon, nor shall resort be
had to the property of any of the Trustees, shareholders, officers, employees or
agents of the Trust, but only the property of the relevant series of the Trust
shall be bound.
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<PAGE>
APPENDIX - DESCRIPTION OF SECURITIES RATINGS
Although the ratings of fixed-income securities by Standard & Poor's Ratings
Group ("S&P") and Moody's Investors Service, Inc. ("Moody's") are a
generally accepted measurement of credit risk, they are subject to certain
limitations. For example, ratings are based primarily upon historical events
and do not necessarily reflect the future. Furthermore, there is a period of
time between the issuance of a rating and the update of the rating, during which
time a published rating may be inaccurate.
The descriptions of the S&P and Moody's commercial paper, bond and municipal
securities ratings are set forth below.
Commercial Paper Ratings:
S&P commercial paper ratings are graded into four categories, ranging from A for
the highest quality obligations to D for the lowest. The A, A-1 and A-2
categories are described as follows:
A Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are further refined with
the designations 1, 2, and 3 to indicate the relative degree of safety.
A-1 This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be noted with a plus (+) sign
designation.
A-2 Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues designated
A-1.
Moody's employs three designations, all judged to be investment grade, to
indicate the relative repayment ability of rated issuers. The two highest
designations are as follows:
Issuers (or supporting institutions) rated Prime-1 (or P-1) have a superior
ability for repayment of senior shortterm debt obligations. Prime-1 (or P-1)
repayment ability will normally be evidenced by many of the following
characteristics:
. Leading market positions in well-established industries.
. High rates of return on funds employed.
. Conservative capitalization structure with moderate reliance on debt and
ample asset protection.
. Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
. Well-established access to a range of financial markets and assured sources
of alternate liquidity.
Issuers (or supporting institutions) rated Prime-2 (or P-2) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
Bond Ratings:
S&P describes its four highest ratings for corporate debt as follows:
AAA Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in a small degree.
A Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas such debt normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
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<PAGE>
The ratings from AA to CCC may be modified by the addition of a plus or minus
sign to show relative standing within the major rating categories.
Moody's describes its four highest corporate bond ratings as follows:
Aaa Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
``gilt-edged.'' Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they compose what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A Bonds which are rated A possess many favorable investment attributes and
may be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment in the future.
Baa Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a midrange ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
B-27
<PAGE>
PART C: OTHER INFORMATION
- -------------------------
Item 24: Financial Statements and Exhibits
- ------------------------------------------
(a) Financial Statements:
Not Applicable
(b) Exhibits:
Exhibit 1: Copy of Registrant's Agreement and
Declaration of Trust, as amended
June 14, 1993./1/
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<PAGE>
Exhibit 2: Copy of Registrant's By-Laws, as now in
effect./1/
Exhibit 3: None.
Exhibit 4: None.
Exhibit 5: None.
Exhibit 6(a): Copy of Amended and Restated General
Distributors Agreement between the Trust and
OppenheimerFunds Distributor, Inc.
("Oppenheimer")./4/
(b): Copy of sub-distribution agreement between
Oppenheimer and MML Investors Services,
Inc./1/
Exhibit 7: None.
Exhibit 8(a): Copy of Custodian Agreement between the
Trust and Investors Bank & Trust Company
("IBT")./1/
(b): Form of Administrative and Shareholder
Services Agreement between Registrant, on
behalf of MassMutual Indexed Equity Fund
(the "Fund") and MassMutual for the
provision of administrative and shareholder
services./4/
(c): Copy of Amended and Restated Transfer Agency
Agreement among the Trust, MassMutual and
IBT./4/
Exhibit 9: Form of Third Party Feeder Fund Agreement
with Master Investment Portfolio and
Barclays Global Fund Advisers./4/
Exhibit 10: Opinion of Counsel./4/
Exhibit 11(a): Consent of Ropes & Gray.(incorporated by
reference to Exhibit 10)/4/
C-2
<PAGE>
(b): None.
(c)-(g): Powers of Attorney for Gary E. Wendlandt,
Ronald J. Abdow, Charles J. McCarthy,
John H. Southworth, Mary E. Boland./1/
(i)-(o): Powers of Attorney for Richard H. Ayers,
David E.A. Carson, Richard G. Dooley,
Richard W. Greene, Beverly C.L. Hamilton,
F. William Marshall, Jr., and John V.
Murphy./2/
(p): Powers of Attorney for Master Investment
Portfolio/4/
Exhibit 12: None.
Exhibit 13: None.
Exhibit 14: None.
Exhibit 15(a): Form of Rule 12b-1 Plan for Class A shares
of the Fund./4/
(b): Form of Rule 12b-1 Plan for Class Y shares
of the Fund./4/
Exhibit 16: None.
Exhibit 17: None.
Exhibit 18: Rule 18f-3 Plan./4/
- -------------
/1/Incorporated by reference to Registrant, Post-Effective Amendment No. 4 to
the Registration Statement filed via EDGAR October 2, 1997.
/2/Incorporated by reference to Registrant's Post-Effective Amendment No. 3 to
the Registration Statement filed via EDGAR April 28, 1997.
/3/Incorporated by reference to Registrant's Post-Effective Amendment No. 5 to
the Registration Statement filed via EDGAR November 26, 1997.
/4/Filed herewith.
Item 25: Person Controlled by or Under Common Control with Registrant
- ---------------------------------------------------------------------
At the date of this Post-Effective Amendment to the Registration Statement,
Registrant did not, directly or indirectly, control any person.
Registrant was organized by MassMutual primarily to offer investors both the
opportunity to pursue long-term investment goals and the flexibility to respond
to changes in their investment objectives and economic and market conditions.
The Registrant will provide a vehicle for the investment of assets of various
separate investment accounts established by MassMutual and life insurance
company subsidiaries of MassMutual. The assets in such separate accounts are,
under state law, assets of the life insurance companies which have established
such accounts. Thus, at any time MassMutual and its life insurance company
subsidiaries will own such outstanding shares of Registrant's series as are
purchased with separate account assets. As a
C-3
<PAGE>
result, MassMutual will own substantially all of the shares of Registrant,
probably for a number of years.
The following entities are, or may be deemed to be, controlled by MassMutual
through the direct or indirect ownership of such entities' stock.
1. CM Assurance Company, a Connecticut life, accident, disability and health
insurer, all the stock of which is owned by MassMutual.
2. CM Benefit Insurance Company, a Connecticut life, accident, disability and
health insurer, all the stock of which is owned by MassMutual.
3. C.M. Life Insurance Company, a Connecticut life, accident, disability and
health insurer, all the stock of which is owned by MassMutual.
4. MML Bay State Life Insurance Company, a Connecticut life and health
insurer, all the stock of which is owned by MassMutual.
5. MML Distributors, LLC, formerly known as Connecticut Mutual Financial
Services, LLC, a registered broker-dealer incorporated as a limited
liability company in Connecticut. MassMutual has a 99% ownership interest
and G.R. Phelps & Co. has a 1% ownership interest therein.
6. MassMutual Holding Company, a Delaware holding company, all the stock of
which is owned by MassMutual.
7. MassMutual of Ireland, Limited, incorporated in the Republic of Ireland, to
operate a group life and health claim office for MassMutual, all of the
stock of which is owned by MassMutual.
8. MML Series Investment Fund, a registered open-end investment company
organized as a Massachusetts business trust, all of the shares of which are
owned by separate accounts of MassMutual and companies controlled by
MassMutual.
9. MassMutual Institutional Funds, a registered open-end investment company
organized as a Massachusetts business trust, all of the shares of which are
owned by MassMutual.
10. G.R. Phelps & Co., Inc., a Connecticut corporation which formerly operated
as a securities broker-dealer, all the stock of which is owned by
MassMutual Holding Company.
11. MML Investors Services, Inc. is a, registered broker-dealer incorporated in
Massachusetts. MassMutual Holding
Company owns 86% of the capital stock and G.R. Phelps & Co., Inc. owns 14%
of the capital stock of MML Investors Services, Inc.
C-4
<PAGE>
12. MassMutual Holding MSC, Inc., a Massachusetts corporation, which acts as a
holding company for MassMutual positions in investment entities organized
outside the United States. MassMutual Holding Company owns all the
outstanding shares of MassMutual Holding MSC, Inc.
13. MassMutual Holding Trust I, a Massachusetts business trust, which acts as a
holding company for certain MassMutual investment subsidiaries. MassMutual
Holding Company owns all the outstanding shares of MassMutual Holding
Trust I.
14. MassMutual Holding Trust II, a Massachusetts business trust, which acts as
a holding company for certain MassMutual investment subsidiaries.
MassMutual Holding Company owns all the outstanding shares of MassMutual
Holding Trust II.
15. MassMutual International, Inc., a Delaware corporation that acts as a
holding company of and provides services to international insurance
companies, all of the stock of which is owned by MassMutual Holding
Company.
16. MML Insurance Agency, Inc., a licensed insurance broker incorporated in
Massachusetts, all of the stock of which is owned by MML Investors
Services, Inc.
17. MML Securities Corporation, a "Massachusetts Securities Corporation", all
of the stock of which is owned by MML Investors Services, Inc.
18. DISA Insurance Services Agency of America, Inc. (Alabama), a licensed
insurance broker incorporated in Alabama. MML Insurance Agency, Inc. owns
all the shares of outstanding stock.
19. Diversified Insurance Services Agency of America, Inc. (Hawaii), a licensed
insurance broker incorporated in Hawaii. MML Insurance Agency, Inc. owns
all the shares of outstanding stock.
20. MML Insurance Agency of Mississippi, P.C., a Mississippi professional
corporation that operates as an insurance broker, and is controlled by MML
Insurance Agency, Inc.
21. MML Insurance Agency of Nevada, Inc., a Nevada corporation that operates as
an insurance broker, all of the stock of which is owned by MML Insurance
Agency, Inc.
22. MML Insurance Agency of Ohio, Inc., a subsidiary of MML Insurance Agency,
Inc., is incorporated in the state of Ohio and operates as an insurance
broker. The outstanding capital stock is controlled by MML Insurance
Agency, Inc. through a voting trust agreement.
23. MML Insurance Agency of Texas, Inc., a subsidiary of MML Insurance Agency,
Inc., is incorporated in the state of Texas and operates as an insurance
broker. The
C-5
<PAGE>
outstanding capital stock is controlled by MML Insurance Agency, Inc.
through an irrevocable proxy arrangement.
24. MassMutual/Carlson CBO N.V., a Netherlands Antilles corporation which
operates a collateralized bond obligation fund. MassMutual Holding MSC,
Inc. and Carlson Investment Management Co. together own 99% of the
outstanding shares.
25. MassMutual Corporate Value Limited, a Cayman Islands corporation that owns
approximately 93% of MassMutual Corporate Value Partners Limited.
MassMutual Holding MSC, Inc. owns 46.19% of the outstanding capital stock
of MassMutual Corporate Value Limited.
26 MassMutual Corporate Value Partners Limited, a Cayman Islands corporation
that operates as a high yield bond fund. MassMutual Corporate Value Limited
holds an approximately 93% ownership interest in this company.
27. 9048-5434 Quebec, Inc., a Quebec corporation, which operates as the owner
of hotel property in Montreal, Quebec, Canada. MassMutual Holding MSC, Inc.
owns all the shares of 9048-5434 Quebec, Inc.
28. Antares Leveraged Capital Corp., a Delaware corporation that operates as a
finance company. MassMutual Holding Trust I owns approximately 98.7% of the
capital stock of Antares.
29. Charter Oak Capital Management, Inc., a Delaware corporation that operates
as an investment manager. MassMutual Holding Trust I owns 80% of the
capital stock of Charter Oak.
30. Cornerstone Real Estate Advisers, Inc., a Massachusetts equity real estate
advisory corporation, all the stock of which is owned by MassMutual Holding
Trust I.
31. DLB Acquisition Corporation ("DLB") is a Delaware corporation, which serves
as a holding company for David L. Babson and Company, Incorporated.
MassMutual Holding Trust I owns 83.7% of the outstanding capital stock of
DLB.
32. Oppenheimer Acquisition Corporation ("OAC") is a Delaware corporation,
which serves as a holding company for OppenheimerFunds, Inc. MassMutual
Holding Trust I owns 86% of the capital stock of OAC.
33. David L. Babson and Company, Incorporated, a registered investment adviser
incorporated in Massachusetts, all of the stock of which is owned by DLB.
34. Babson Securities Corporation, a registered broker-dealer incorporated in
Massachusetts, all of the stock of which is owned by David L. Babson and
Company, Incorporated.
C-6
<PAGE>
35. Babson-Stewart-Ivory International, a Massachusetts general partnership,
which operates as a registered investment adviser. David L. Babson and
Company Incorporated holds a 50% ownership interest in the partnership.
36. Potomac Babson Incorporated, a Massachusetts corporation, is a registered
investment adviser. David L. Babson and Company Incorporated owns 60% of
the outstanding shares of Potomac Babson Incorporated.
37. OppenheimerFunds, Inc., a registered investment adviser incorporated in
Colorado, all of the stock of which is owned by Oppenheimer Acquisition
Corporation.
38. Centennial Asset Management Corporation, a Delaware corporation that serves
as the investment adviser and general distributor of the Centennial Funds.
OppenheimerFunds, Inc. owns all the stock of Centennial Asset Management
Corporation.
39. HarbourView Asset Management Corporation, a registered investment adviser
incorporated in New York, all the stock of which is owned by
OppenheimerFunds, Inc.
40. MultiSource Service, Inc., a Colorado corporation that operates as a
clearing broker, 80% of the stock of which is owned by OppenheimerFunds,
Inc.
41. OppenheimerFunds Distributor, Inc., a registered broker-dealer incorporated
in New York, all the stock of which is owned by OppenheimerFunds, Inc.
42. Oppenheimer Partnership Holdings, Inc., a Delaware holding company, all the
stock of which is owned by OppenheimerFunds, Inc.
43. Oppenheimer Real Asset Management, Inc., a commodity pool operator
incorporated in Delaware, all the stock of which is owned by
OppenheimerFunds, Inc.
44. Shareholder Financial Services, Inc., a transfer agent incorporated in
Colorado, all the stock of which is owned by OppenheimerFunds, Inc.
45. Shareholder Services, Inc., a transfer agent incorporated in Colorado, all
the stock of which is owned by OppenheimerFunds, Inc.
46. Centennial Capital Corporation, a Delaware corporation that formerly
sponsored a unit investment trust. Centennial Asset Management Corporation
owns all the outstanding shares of Centennial Capital Corporation.
47 Cornerstone Office Management, LLC, a Delaware limited liability company
that is 50% owned by Cornerstone Real Estate Advisers, Inc. and 50% owned
by MML Realty Management Corporation.
C-7
<PAGE>
48. Cornerstone Suburban Office Investors, LP, a Delaware limited partnership,
which operates as a real estate operating company. Cornerstone Office
Management, LLC holds a 1% general partnership interest in this fund and
MassMutual holds a 99% limited partnership interest.
49. CM Advantage, Inc., a Connecticut corporation that acts as a general
partner in real estate limited partnerships. MassMutual Holding Trust II
owns all of the outstanding stock.
50. CM International, Inc., a Delaware corporation that holds a mortgage pool
and issues collateralized mortgage obligations. MassMutual Holding Trust II
owns all the outstanding stock of CM International, Inc.
51. CM Property Management, Inc., a Connecticut real estate holding company,
all the stock of which is owned by MassMutual Holding Trust II.
52. HYP Management, Inc., a Delaware corporation which is the LLC Manager for
MassMutual High Yield Partners LLC and owns 1.28% of the LLC units of such
entity. MassMutual Holding Trust II owns all the outstanding stock of HYP
Management, Inc.
53. MMHC Investment, Inc., a Delaware corporation which is a passive investor
in MassMutual/Darby CBO LLC, MassMutual High Yield Partners LLC and other
MassMutual investments. MassMutual Holding Trust II owns all the
outstanding stock of MMHC Investment, Inc.
54. MassMutual High Yield Partners LLC, a Delaware limited liability company,
that operates as a high yield bond fund. MassMutual holds 5.28%, MMHC
Investment Inc. holds 35.99%, and HYP Management, Inc. hold 1.28% for a
total of 42.55% of the ownership interest in this company.
55. MML Realty Management Corporation, a former property manager incorporated
in Massachusetts, all the stock of which is owned by MassMutual Holding
Trust II.
56. 505 Waterford Park Limited Partnership, a Delaware limited partnership,
which holds title to an office building in Minneapolis, Minnesota. MML
Realty Management Corporation holds a 1% general partnership interest in
this partnership and MassMutual holds a 99% limited partnership interest.
57. MassMutual/Darby CBO IM Inc., a Delaware corporation which operates as the
LLC Manager of MassMutual/Darby CBO LLC. MMHC Investment, Inc. owns 50% of
the capital stock of this company.
58. MassMutual/Darby CBO LLC, a Delaware limited liability company that
operates as a fund investing in high yield debt securities of U.S. and
emerging market issuers. MassMutual holds 1.79%, MMHC Investment Inc. holds
44.91% and MassMutual High Yield Partners LLC holds 2.39% of the ownership
interest in this company.
59. Urban Properties, Inc., a Delaware real estate holding and development
company, all the stock of which is owned by MassMutual Holding Trust II.
60. Westheimer 335 Suites, Inc., was incorporated in Delaware to serve as a
general partner of the Westheimer 335 Suites Limited Partnership.
MassMutual Holding Trust II owns all the stock of Westheimer 335 Suites,
Inc.
C-8
<PAGE>
61. Westheimer 335 Suites Limited Partnership, a Texas limited partnership of
which Westheimer 335 Suites, Inc. is the general partner.
62. MassMutual Internacional (Argentina) S.A., an Argentine corporation, which
operates as a holding company. MassMutual International Inc. owns 99.9% of
the outstanding shares and MassMutual Holding Company owns the remaining
0.1% of the shares.
63. MassMutual Internacional (Chile) S.A., a Chilean corporation, which
operates as a holding company. MassMutual International Inc. owns 99.9% of
the outstanding shares and MassMutual Holding Company owns the remaining
0.1% of the shares.
64. MassMutual International (Bermuda) Ltd., a Bermuda life insurance company,
all of the stock of which is owned by MassMutual International Inc.
65. MassMutual International (Luxembourg) S.A., a Luxembourg corporation, which
operates as an insurance company. MassMutual International Inc. owns 99.9%
of the outstanding shares and MassMutual Holding Company owns the remaining
0.1% of the shares.
66. MassLife Seguros de Vida S.A., a life insurance company incorporated in
Argentina. MassMutual International Inc. owns 99.9% of the outstanding
capital stock of MassLife Seguros de Vida S.A.
67. MassMutual Services, S.A., an Argentine corporation, which operates as a
service company. MassMutual Internacional (Argentina) S.A. owns 99.9% of
the outstanding shares and MassMutual International, Inc. owns 0.1% of the
shares.
68. Mass Seguros de Vida S.A., a life insurance company incorporated in Chile.
MassMutual International (Chile) S.A. owns 33.5% of the outstanding capital
stock of Mass Seguros de Vida S.A.
69. Origen Inversiones S.A., a Chilean corporation which operates as a holding
company. MassMutual Internacional (Chile) S.A. holds a 33.5% ownership
interest in this corporation.
70. Compania Seguros de VidaCorp, S.A. a Chilean insurance company. Origen
Inversiones S.A. owns 99% of the outstanding shares of this company.
71. Oppenheimer Series Fund Inc., a Maryland corporation and a registered
open-end investment company of which MassMutual and its affiliates own a
majority of the outstanding shares issued by the fund.
C-9
<PAGE>
72. Panorama Series Fund, Inc., a registered open-end investment company
organized as a Maryland corporation. Shares of the fund are sold only to
MassMutual and its affiliates.
73. The DLB Fund Group, an open-end management investment company advised by
David L. Babson and Company Incorporated. MassMutual owns at least 25% of
several of the series of the DLB Fund Group.
MassMutual acts as the investment adviser to each of the following investment
companies, and as such may be deemed to control them.
1. MML Series Investment Fund, a registered open-end Massachusetts business
trust, all of the shares are owned by separate accounts of MassMutual and
companies controlled by MassMutual.
2. MassMutual Corporate Investors, a registered closed-end Massachusetts
business trust.
3. MassMutual Corporate Value Partners Limited, a Cayman Islands corporation
that operates as a high-yield bond fund. MassMutual Corporate Value Limited
holds an approximately 93% ownership interest in this company.
4. MassMutual High Yield Partners LLC, a Delaware limited liability company,
that operates as a high yield bond fund. MassMutual holds 5.28%, MMHC
Investment Inc. holds 35.99%, and HYP Management, Inc. hold 1.28% for a
total of 42.55% of the ownership interest in this company.
5. MassMutual Institutional Funds, a registered open-end Massachusetts
business trust, all of the shares of which are owned by MassMutual.
6. MassMutual Participation Investors, a registered closed-end Massachusetts
business trust.
7. MassMutual/Carlson CBO N.V., a Netherlands Antilles corporation which
operates a collateralized bond obligation fund. MassMutual Holding MSC,
Inc. and Carlson Investment Management Co. each own 50% of the outstanding
shares.
8. MassMutual/Darby CBO, LLC, a Delaware limited liability Company that
operates as a fund investing in high yield debt securities of U.S. and
emerging market issuers. Mass Mutual owns 1.79%, MMHC Investment, Inc. owns
44.91% and Mass Mutual High Yield Partners LLC owns 2.39% of the ownership
interest in this Company.
C-10
<PAGE>
Item 26: Number of Holders of Securities
- ----------------------------------------
As of the date of this Post-Effective Amendment, the number of holders of
record of each class of securities of MassMutual Indexed Equity Fund was as
follows:
<TABLE>
<CAPTION>
Title of Class Number of Record Holders
-------------- ------------------------
<S> <C>
Shares of
Beneficial 0
Interest
</TABLE>
Item 27: Indemnification
- ------------------------
Article VIII of Registrant's Agreement and Declaration of Trust provides for the
indemnification of Registrant's Trustees and officers. Registrant undertakes to
apply the indemnification provisions of its Agreement and Declaration of Trust
in a manner consistent with Securities and Exchange Commission Release No.
IC-11330 so long as the interpretation of Section 17(h) and 17(i) of the
Investment Company Act of 1940 (the "1940 Act") set forth in such Release shall
remain in effect and be consistently applied.
Trustees and officers of Registrant are also indemnified by MassMutual pursuant
to its by-laws which apply to subsidiaries, including Registrant. No
indemnification is provided with respect to any liability to any entity which is
registered as an investment company under the 1940 Act or to the security
holders thereof, where the basis for such liability is willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of office.
MassMutual's directors' and officers' liability insurance program, which covers
Registrant's Trustees and officers, consists of two distinct coverages. The
first coverage reimburses MassMutual, subject to specified limitations, for
amounts which MassMutual is legally obligated to pay out under its
indemnification by-law, discussed above. The second coverage directly protects a
Trustee or officer of Registrant against liability from shareholder derivative
and similar lawsuits which are indemnifiable under the law. There are, however,
specific acts giving rise to liability which are excluded from this coverage.
For example, no Trustee or officer is insured against personal liability for
libel or slander, acts of deliberate dishonesty, fines or penalties, illegal
personal profit or advantage at the expense of Registrant or its shareholders,
violation of employee benefit plans, regulatory statutes, and similar acts which
would traditionally run contrary to public policy and hence reimbursement by
insurance.
C-11
<PAGE>
MassMutual's present insurance coverage has an overall limit of $60 million
annually ($15 million of which is underwritten by Continental Casualty Company,
$15 million of which is underwritten by Executive Risk Indemnity, Inc., $15
million of which is underwritten by Federal Insurance Co. and $15 million of
which is underwritten by Sargasso Mutual Insurance Company). There is a
deductible of $200,000 per claim under the corporate coverage. There is no
deductible for individual Trustees or officers.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "1933 Act") may be permitted to Trustees, officers and controlling
persons of Registrant pursuant to the foregoing provisions, or otherwise,
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
1933 Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a Trustee, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such Trustee, officer or controlling person in connection with the
securities being registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
Item 28: Business and Other Connections of the Investment Adviser
- -----------------------------------------------------------------
The Fund currently does not retain an investment adviser because the Fund's
assets will be invested in the S&P 500 Index Master Portfolio (the "Master
Portfolio") of Master Investment Portfolio ("MIP"). Barclays Global Fund
Advisors ("BGFA") serves as the investment adviser to the Master Portfolio.
BGFA's business is that of a registered investment adviser to certain
open-end, management investment companies and various other institutional
investors. The directors and officers of BGFA consist primarily of persons who
during the past two years have been active in the investment management business
of the former sub-adviser to the Master Portfolio, Wells Fargo Nikko Investment
Advisors ("WFNIA") and, in some cases, the service business of Barclays Global
Investors, N.A. ("BGI"). Each of the directors and executive officers of BGFA
also have substantial responsibilities as directors and/or officers of BGI. To
the knowledge of the Registrant, except as set forth below, none of the
directors or executive officers of BGFA is or has been at any time during the
past two fiscal years engaged in any other business, profession, vocation or
employment of a substantial nature.
<TABLE>
<CAPTION>
Name and Position Principal Business(es) During at
at BGFA Least the Last Two Fiscal Years
- ------- -------------------------------
<S> <C>
Frederick L.A. Grauer Director of BGFA and Co-Chairman and Director of BGI
Director 45 Fremont Street, San Francisco, CA 94105
Patricia Dunn Director of BGFA and Co-Chairman and Director of BGI
Director 45 Fremont Street, San Francisco, CA 94105
Lawrence G. Tint Chairman of the Board of Directors of BGFA and
Chairman and Director Chief Executive Officer of BGI
45 Fremont Street, San Francisco, CA 94105
Geoffrey Flecher Chief Financial Officer of BGFA and BGI since May 1997
Chief Financial Officer 45 Fremont Street, San Francisco, CA 94105
Managing Director and Principal Accounting Officer at
Bankers Trust Company from 1988-1997
505 Market Street, San Francisco, CA 94105
</TABLE>
C-12
<PAGE>
Item 29: Principal Underwriters
- -------------------------------
(a) OppenheimerFunds Distributor, Inc. is the General Distributor of
the Trust's shares and is also general distributor of the following open-end
management investment companies:
1. The "Denver-Based" Oppenheimer funds. The address for these
-------------------------------------
funds is 6803 South Tucson Way, Englewood, CO 80112.
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Equity Income Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Integrity Funds (consisting of the following
series:)
Oppenheimer Bond Fund
Oppenheimer International Bond Fund
Oppenheimer High Yield Fund
Oppenheimer Main Street Funds, Inc.(R)
(consisting of the following 2 series:)
Oppenheimer Main Street Income & Growth Fund
Oppenheimer Main Street California Municipal Fund
Oppenheimer Real Asset Fund
Oppenheimer Strategic Income Fund
Oppenheimer Municipal Fund
(consisting of the following 2 series:)
Oppenheimer Insured Municipal Fund
Oppenheimer Intermediate Municipal Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Total Return Fund, Inc. Capital Accumulation Plan
Oppenheimer Variable Account Funds
(consisting of the following 9 series:)
Oppenheimer Money Fund
Oppenheimer High Income Fund
Oppenheimer Bond Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Growth Fund
C-13
<PAGE>
Oppenheimer Multiple Strategies Fund
Oppenheimer Growth & Income Fund
Oppenheimer Global Securities Fund
Oppenheimer Strategic Bond Fund
Panorama Series Fund, Inc.
(consisting of the following 7 series:)
Total Return Portfolio
Growth Portfolio
International Equity Portfolio
LifeSpan Capital Appreciation Portfolio
LifeSpan Balanced Portfolio
LifeSpan Diversified Income Portfolio
Government Securities Portfolio
2. The "New York-Based" Oppenheimer funds. The address for these
---------------------------------------
funds is 2 World Trade Center, New York, NY 10048-0203.
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multiple Strategies Fund
Oppenheimer Multi-State Municipal Trust
(consisting of the following 3 series:)
Oppenheimer Florida Municipal Fund
Oppenheimer New Jersey Municipal Fund
Oppenheimer Pennsylvania Municipal Fund
Oppenheimer New York Municipal Fund
Oppenheimer Series Fund, Inc.
(consisting of the following 5 series:)
Oppenheimer Disciplined Allocation Fund
Oppenheimer Disciplined Value Fund
Oppenheimer LifeSpan Growth Fund
Oppenheimer LifeSpan Balanced Fund
Oppenheimer LifeSpan Income Fund
Oppenheimer International Small Company Fund
C-14
<PAGE>
Oppenheimer Municipal Bond Fund
Oppenheimer U.S. Government Trust
3. The "Quest" Oppenheimer Funds. OpCap Advisors (previously named
-----------------------------
Quest for Value Advisors) is sub-adviser. The address for these
funds is 2 World Trade Center, New York, NY 10048-0203.
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Quest for Value Funds
(consisting of the following 4 series:)
Oppenheimer Quest Opportunity Value Fund
Oppenheimer Quest Small Cap Value Fund
Oppenheimer Quest Growth & Income Value Fund
Oppenheimer Quest Officers Value Fund
Oppenheimer Quest Global Value Fund, Inc.
4. The "Rochester" Oppenheimer Funds. The address for these funds
----------------------------------
is 350 Linden Oaks, Rochester, NY 14625.
Bond Fund Series - Oppenheimer Bond Fund for Growth
Rochester Fund Municipals
Rochester Portfolio Series - Limited Term New York Municipal
Fund
5. Oppenheimer Mid Cap Fund - The address for this Fund is 2
------------------------
World Trade Center, New York, NY 10048-0203
(b) The information contained in the registration on Form BD of
OppenheimerFunds Distributor, Inc., filed under the Securities Exchange Act of
1934, is incorporated herein by reference.
Item 30: Location of Accounts and Records
- -----------------------------------------
Each account, book or other document required to be maintained by
Registrant pursuant to Section 31 (a) of the Investment Company Act of 1940 and
Rules 31a-1 to 31a-3 thereunder is maintained as follows:
(Articles of Incorporation and Bylaws)
MassMutual Institutional Funds
1295 State Street
Springfield, Massachusetts 01111
(With respect to its services as Administrator)
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, Massachusetts 01111
C-15
<PAGE>
(With respect to its services as Distributor)
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York
(With respect to its services as Sub-Administrator, Transfer Agent and
Custodian)
Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts
(With respect to their services as counsel)
Ropes & Gray
One International Place
Boston, Massachusetts
Item 31: Management Services
- ----------------------------
Not Applicable.
Item 32: Undertakings
- ---------------------
(a) The Registrant hereby undertakes to call a meeting of shareholders
for the purposes of voting upon the question of removal of a trustee or
trustees, and to assist in communications with other shareholders as required by
Section 16(c) of the Securities Act of 1933, as amended, but only where it is
requested to do so by the holders of at least 10% of the Registrant's
outstanding voting securities.
C-16
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant has duly
caused this Post-Effective Amendment to the Registration Statement to be signed
on its behalf by the undersigned, thereto duly authorized, in the City of
Springfield and The Commonwealth of Massachusetts on the 5th day of February,
1998. The Registrant certifies that this Post-Effective Amendment meets all the
requirements for effectiveness pursuant to Rule 485(b) under the Securities Act
of 1933.
MASSMUTUAL INSTITUTIONAL FUNDS
By: /s/ Hamline C. Wilson
---------------------
Hamline C. Wilson
Vice President & Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the 5th day of February 1998.
Signature Title
--------- -----
/s/ Gary E. Wendlandt Chairman, Trustee &
--------------------- Chief Executive Officer
Gary E. Wendlandt
/s/ Stephen L. Kuhn * Trustee
-------------------
Ronald J. Abdow
/s/ Stephen L. Kuhn * Trustee
-------------------
Richard H. Ayers
/s/ Stephen L. Kuhn * Trustee
-------------------
Mary E. Boland
/s/ Stephen L. Kuhn * Trustee
-------------------
David E. A. Carson
<PAGE>
/s/ Stephen L. Kuhn * Trustee
-------------------
Richard G. Dooley
/s/ Stephen L. Kuhn * Trustee
-------------------
Richard W. Greene
/s/ Stephen L. Kuhn * Trustee
-------------------
Beverly C. L. Hamilton
/s/ Stephen L. Kuhn * Trustee
-------------------
F. William Marshall, Jr.
/s/ Stephen L. Kuhn * Trustee
-------------------
Charles J. McCarthy
/s/ John V. Murphy Trustee
------------------
John V. Murphy
/s/ Stephen L. Kuhn * Trustee
-------------------
John H. Southworth
/s/ Hamline C. Wilson Vice President &
--------------------- Chief Accounting and
Hamline C. Wilson Financial Officer
/s/ Stephen L. Kuhn
-------------------
* Stephen L. Kuhn, as Attorney-in-fact pursuant to Powers of Attorney
granted on or about August 5, 1994, April 18, 1996 and April 21, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 7 to the Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Little Rock,
State of Arkansas on the 29th day of January, 1998.
MASTER INVESTMENT PORTFOLIO-
S&P 500 INDEX MASTER PORTFOLIO
By: /s/ Richard H. Blank, Jr.
----------------------------
Richard H. Blank, Jr.
Secretary and Treasurer
(Principal Financial Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 7 to the Registration Statement on Form N-1A has
been signed below by the following persons in the capacities and on the date
indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
Chairman, President (Principal Executive
- -------------------------- Officer), and Trustee January 29, 1998
R. Greg Feltus*
/s/ Richard H. Blank, Jr. Secretary and Treasurer (Principal January 29, 1998
- -------------------------- Financial Officer)
Richard H. Blank, Jr.
Trustee January 29, 1998
- --------------------------
Jack S. Euphrat*
Trustee January 29, 1998
- --------------------------
Thomas S. Goho*
Trustee January 29, 1998
- --------------------------
W. Rodney Hughes*
Trustee January 29, 1998
- --------------------------
J. Tucker Morse*
</TABLE>
* Richard H. Blank, Jr. signs this document pursuant to powers of attorney
filed with this Post-Effective Amendment No. 7 to the Registration Statement
on Form N-1A.
*By /s/ Richard H. Blank, Jr.
----------------------------
Richard H. Blank, Jr.
Secretary and Treasurer
(Principal Financial Officer)
<PAGE>
INDEX TO EXHIBITS
-----------------
<TABLE>
<CAPTION>
Exhibit No. Title of Exhibit
- ----------- ----------------
<S> <C>
6.A Amended and Restated General Distributor's Agreement
8(b) Form of Administrative and Shareholder Services Agreement
8(c) Amended and Restated Transfer Agency Agreement
9 Form of Third Party Feeder Fund Agreement
10 Opinion of counsel
11(p) Powers of Attorney for Master Investment Portfolio
15(a) Form of Rule 12b-1 Plan for Class A shares
15(b) For of Rule 12b-1 Plan for Class Y shares
18 Rule 18F-3 Plan
</TABLE>
<PAGE>
Exhibit 6.A
AMENDED AND RESTATED
GENERAL DISTRIBUTOR'S AGREEMENT
BETWEEN
MASSMUTUAL INSTITUTIONAL FUNDS
AND
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
Date: December 1, 1997
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
Two World Trade Center, Suite 3400
New York, NY 10048-0203
Dear Sirs:
MASSMUTUAL INSTITUTIONAL FUNDS, a Massachusetts business trust (the "Trust"), is
registered as an investment company under the Investment Company Act of 1940
(the "1940 Act"), and an indefinite number of one or more classes of shares of
beneficial interest of the following series of the Trust: (1) MassMutual Prime
Fund; (2) MassMutual Short-Term Bond Fund; (3) MassMutual Core Bond Fund; (4)
MassMutual Balanced Fund; (5) MassMutual Value Equity Fund; (6) MassMutual Small
Cap Value Equity Fund; and (7) MassMutual International Equity Fund, have been
registered under the Securities Act of 1933, as amended (the "1933 Act") to be
offered for sale to the public in a continuous public offering in accordance
with the terms and conditions set forth in each series' Prospectus and Statement
of Additional Information ("SAI") included in the Trust's Registration Statement
as it may be amended from time to time (the "current Prospectus and/or SAI"). As
used herein, the term "Fund" refers to each of the series of the Trust described
above and any additional series of the Trust that have Shares which become
registered under the 1933 Act to be offered for sale to the public in a
continuous public offering in accordance with the terms and conditions set forth
in such series' current Prospectus and/or SAI.
In this connection, the Trust desires that your firm (the "General Distributor")
act in a principal capacity as General Distributor for the sale and distribution
of Class A and Class Y Shares which have been registered as described above and
of any additional Shares of any Fund which may become registered during the term
of this Agreement and as to which you agree to act as to the General Distributor
("Shares"). You have advised the Trust that you are willing to act as General
Distributor on such terms, and it is accordingly agreed by and between us as
follows:
1. Appointment of the Distributor. The Trust hereby appoints you as the sole
-------------------------------
General Distributor, pursuant to the aforesaid continuous public offering of its
Shares, and the Trust further agrees from and after the date of this Agreement,
that it will not, without your consent, sell or agree to sell any Shares
otherwise than through you, except (a) the Trust may itself sell Shares without
sales charge as an investment to the officers, trustees or directors and bona
fide present and former full-time employees of the Trust, the Trust's Investment
Adviser and affiliates thereof, the Separate Investment Accounts of the Adviser,
and to investors who are identified in the current Prospectus and/or SAI as
having the privilege to buy Shares at net asset value; (b) the Trust may issue
Shares in connection with a merger, consolidation or acquisition of
1
<PAGE>
assets on such basis as may be authorized or permitted under the 1940 Act; (c)
the Trust may issue Shares for the reinvestment of dividends and other
distributions of the Trust or of any other Fund if permitted by the current
Prospectus and/or SAI; and (d) the Trust may issue Shares as underlying
securities of a unit investment trust or other registered open-end investment
company (or series thereof) if such unit investment trust or registered open-end
investment company (or series thereof) has elected to use Shares as an
underlying investment.
2. Sale of Shares. You hereby accept such appointment and agree to sell Shares,
---------------
provided, however, that when requested by the Trust at any time because of
market or other economic considerations or abnormal circumstances of any kind,
or when agreed to by mutual consent of the Trust and the General Distributor,
you will suspend such efforts. The Trust may also withdraw the offering of
Shares at any time when required by the provisions of any statute, order, rule
or regulation of any governmental body having jurisdiction. It is understood
that you do not undertake to sell all or any specific number of Shares.
3. Sales Charge. Shares shall be sold by you at net asset value plus, if
-------------
applicable, a front-end sales charge not in excess of 8.5% of the offering
price, but which front-end sales charge, if any, shall be proportionately
reduced or eliminated for larger sales and under other circumstances, in each
case on the basis set forth in the current Prospectus and/or SAI. The
redemption proceeds of Shares offered and sold at net asset value with or
without a front-end sales charge may be subject to a contingent deferred sales
charge ("CDSC") under the circumstances described in the current Prospectus
and/or SAI. You may reallow such portion of the front-end sales charge to
dealers or cause payment (which may exceed the front-end sales charge, if any)
of commissions to brokers through which sales are made, as you may determine,
and you may pay such amounts to dealers and brokers on sales of Shares from your
own resources (such dealers and brokers shall collectively include all domestic
or foreign institutions eligible to offer and sell the Shares), and in the event
a Fund has more than one class of Shares outstanding, then you may impose a
front-end sales charge and/or a CDSC on Shares of one class that is different
from the charges imposed on Shares of a Fund's other class(es), in each case as
set forth in the current Prospectus and/or SAI, provided the front-end sales
charge and CDSC to the ultimate purchaser do not exceed the respective levels
set forth for such category of purchaser in the current Prospectus and/or SAI.
4. Purchase of Shares.
-------------------
(a) As General Distributor, you shall have the right to accept or reject
orders for the purchase of Shares at your discretion. Any consideration
which you may receive in connection with a rejected purchase order will be
returned promptly.
(b) You agree promptly to issue or to cause an agent appointed by you or
the duly appointed transfer or shareholder servicing agent of the Trust to
issue as your agent confirmations of all accepted purchase orders and to
transmit a copy of such confirmations to the Trust. The net asset value of
all Shares which are the subject of such confirmations, computed in
accordance with the applicable rules under the 1940 Act, shall be a
liability of the General Distributor to the Trust to be paid promptly after
receipt of payment from the originating dealer or broker (or investor, in
the case of direct purchases) and not later than eleven business days after
such confirmation even if you have not actually received payment from the
originating dealer or broker, or investor. In no event shall the General
Distributor make payment to the Trust later than permitted by applicable
rules of the National Association of Securities Dealers, Inc.
(c) If the originating dealer or broker shall fail to make timely
settlement of its purchase order in accordance with applicable rules of the
National Association of Securities Dealers,
2
<PAGE>
Inc., or if a direct purchaser shall fail to make good payment for Shares
in a timely manner, you shall have the right to cancel such purchase order
and, at your account and risk, to hold responsible the originating dealer
or broker, or investor. You agree promptly to reimburse a Fund for losses
suffered by it that are attributable to any such cancellation, or to errors
on your part in relation to the effective date of accepted purchase orders,
limited to the amount that such losses exceed contemporaneous gains
realized by a Fund for either of such reasons with respect to other
purchase orders.
(d) In the case of a canceled purchase for the account of a directly
purchasing shareholder, the Trust agrees that if such investor fails to
make you whole for any loss you pay to a Fund on such canceled purchase
order, a Fund will reimburse you for such loss to the extent of the
aggregate redemption proceeds of any other Shares of a Fund owned by such
investor, on your demand that a Fund exercise its right to claim such
redemption proceeds.
The Trust shall register or cause to be registered all Shares sold to you
pursuant to the provisions hereof in such names and amounts as you may
request from time to time. All Shares, when so issued and paid for, shall
be fully paid and non-assessable by the Trust (which shall not prevent the
imposition of any CDSC that may apply) to the extent set forth in the
current Prospectus and/or SAI.
5. 1933 Act Registration. The Trust has delivered to you a copy of the current
----------------------
Prospectus and SAI. The Trust agrees that it will use its best efforts to
continue the effectiveness of the Registration Statement under the 1933 Act.
The Trust further agrees, at its expense, to prepare and file any amendments to
its Registration Statement as may be necessary and any supplemental data in
order to comply with the 1933 Act. The Trust will promptly furnish you at your
expense with a reasonable number of copies of the Prospectus and SAI and any
amendments thereto for use in connection with the sale of Shares.
6. 1940 Act Registration. The Trust has registered under the 1940 Act as an
----------------------
investment company, and it will use its best efforts to maintain such
registration and to comply with the requirements of the 1940 Act.
7. State Blue Sky Notification. At your request, the Trust will, at its expense,
----------------------------
take such steps as may be necessary and feasible to determine what action is
necessary to file notices necessary for the sale of Shares and where required,
to file notices for the sale of Shares in states, territories or dependencies of
the United States, the District of Columbia, the Commonwealth of Puerto Rico and
to qualify Shares in foreign countries, in accordance with the laws thereof, and
to renew or extend any such notification or qualification; provided, however,
that the Trust shall not be required to qualify Shares or to maintain the
qualification of Shares in any jurisdiction where it shall deem such
qualification disadvantageous to the Trust. The Trust shall keep you informed of
the State Blue Sky Notifications of the Shares.
8. Duties of Distributor. You agree that:
----------------------
(a) Neither you nor any of your officers will take any long or short
position in the Shares;
(b) You shall, upon reasonable request of the Trust, furnish to the Trust
any pertinent information required to be inserted with respect to you as
General Distributor within the purview of the 1933 Act in any reports or
registrations required to be filed with any governmental authority;
(c) You will not make any representations inconsistent with the information
contained in the current Prospectus and/or SAI;
3
<PAGE>
(d) You or your agent shall maintain such records relating to your acting
as General Distributor of the Trust as may be reasonably required for the
Trust or its transfer or shareholder servicing agent to respond to
shareholder requests or complaints, and to permit the Trust to maintain
proper accounting records, and you shall make such records reasonably
available to the Trust and its transfer agent or shareholder servicing
agent upon request; and
(e) In performing your obligations under this Agreement, you shall comply
with all requirements of a Fund's current Prospectus and/or SAI and all
applicable laws, rules and regulations with respect to the purchase, sale
and distribution of Shares.
9. Duties of the Trust. The Trust agrees that:
--------------------
(a) It shall promptly furnish to you, at least 10 days prior to use, any
description of you or the services you perform hereunder which the Trust
intends to use in the Prospectus, SAI, in sales literature reports,
advertisements or otherwise. Such description may not be utilized if you
object thereto in writing;
(b) It shall promptly furnish to you for your approval and filing with the
National Association of Securities Dealers, Inc. any proposed sales
literature or advertisement relating to, or referring to the Trust or the
Shares;
(c) It shall promptly advise you of any information concerning the Trust or
the Shares, which may affect your ability to properly discharge your
obligations hereunder; and
(d) It shall not use the word "Oppenheimer" other than merely identifying
the General Distributor as such unless such use is specifically approved by
you.
10. Allocation of Costs. The Trust shall pay, or cause others to pay, the cost
--------------------
of composition and printing of sufficient copies of a Fund's Prospectus and SAI
as shall be required for periodic distribution to a Fund's shareholders and the
expense of registering Shares for sale under federal securities laws and filing
notices in states to sell Shares in such states. You shall pay the expenses
normally attributable to the sale of Shares, other than as paid under a Fund's
Plan under Rule 12b-1 of the 1940 Act, including the cost of printing and
mailing of the Prospectus (other than those furnished to existing shareholders)
and any sales literature or advertisements used by you in the public sale of the
Shares.
11. Duration. This Agreement shall take effect on the date first written above,
---------
and shall supersede any and all prior General Distributor's Agreements by and
among the Trust and you. Unless earlier terminated pursuant to Section 12
hereof, this Agreement shall remain in effect until December 1, 1998. This
Agreement shall continue in effect from year to year thereafter, provided that
such continuance shall be specifically approved at least annually: (a) by the
Trust's Board of Trustees or by vote of a majority of the voting securities of
the Trust; and (b) by the vote of a majority of the Trustees, who are not
parties to this Agreement or "interested persons" (as defined in the 1940 Act)
of any such person, cast in person at a meeting called for the purpose of voting
on such approval.
12. Termination. This Agreement may be terminated (a) by the General Distributor
------------
at any time without penalty by giving no less than sixty days' written notice
(which notice may be waived by the Trust); (b) by the Trust at any time without
penalty upon sixty days' written notice to the General Distributor (which notice
may be waived by the General Distributor); or (c) by mutual consent of the Trust
and the General
4
<PAGE>
Distributor, provided that such termination by the Trust shall be directed or
approved by the Board of Trustees of the Trust or by the vote of the holders of
a majority of the outstanding voting securities of the Trust. In the event this
Agreement is terminated, the General Distributor shall be entitled to be paid
the CDSC, if any, under paragraph 3 hereof on the redemption proceeds of Shares
sold prior to the effective date of such termination.
13. Assignment. This Agreement may not be amended or changed except in writing
-----------
and shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors; however, this Agreement shall not be assigned
by either party and shall automatically terminate upon assignment.
14. Disclaimer of Shareholder Liability. The General Distributor understands and
------------------------------------
agrees that the obligations of the Trust under this Agreement are not binding
upon any Trustee or shareholder of the Trust personally, but bind only the Trust
and the Trust's property; the General Distributor represents that it has notice
of the provisions of the Agreement and Declaration of Trust dated May 29, 1993,
as amended, disclaiming shareholder liability for acts or obligations of the
Trust.
15. Section Headings. The headings of each section is for descriptive purposes
-----------------
only, and such headings are not to be construed or interpreted as part of this
Agreement.
If the foregoing is in accordance with your understanding, so indicate by
signing in the space provided below.
MASSMUTUAL INSTITUTIONAL FUNDS
By:
---------------------------
Accepted:
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
By:
-------------------------------
5
<PAGE>
Exhibit 8(b)
FORM OF
ADMINISTRATIVE AND SHAREHOLDER SERVICES AGREEMENT
Between
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
And
MASSMUTUAL INSTITUTIONAL FUNDS
(As to the MassMutual Indexed Equity Fund)
<PAGE>
ADMINISTRATIVE AND SHAREHOLDER SERVICES AGREEMENT
-------------------------------------------------
This ADMINISTRATIVE AND SHAREHOLDER SERVICES AGREEMENT (the "Agreement"),
dated as of this 6th day of February, 1998 (the "Effective Date") is by and
between MassMutual Institutional Funds (the "Trust") on behalf of MassMutual
Indexed Equity Fund (the "Fund") and Massachusetts Mutual Life Insurance Company
(the "Manager").
WHEREAS, The Fund is a diversified series of the Trust, a Massachusetts
business trust which is an open--end, management investment company registered
as such with the Securities and Exchange Commission (the "Commission") pursuant
to the Investment Company Act of 1940, as amended (the "1940 Act"), and
WHEREAS, the Trust, on behalf of the Fund, and the Manager wish to enter
into this Agreement whereby the Manager will provide, or cause to be provided,
administrative and shareholder services for the Fund and assume certain expenses
of the Fund.
NOW, THEREFORE, in consideration of the covenants and mutual promises of
the parties made to each other, it is hereby covenanted and agreed as follows:
ARTICLE I: ADMINISTRATIVE AND SHAREHOLDER SERVICES
--------------------------------------------------
A. General Responsibilities. Subject to the exceptions set forth in Sub-
Section C hereof and subject to the direction and control of the Board of
Trustees of the Trust, the Manager will provide, or cause to be provided, all
services required for the administration of the Trust and the Fund, including
fund accounting, shareholder servicing, and transfer agency services.
B. Specific Responsibilities. Without limiting the responsibilities of the
Manager, the Manager will:
1. Maintain office facilities (which may be in the offices of the
Manager or a corporate affiliate but shall be in such location as the Trust
reasonably determines).
2. Furnish statistical and research data, clerical services and
stationery and office supplies.
3. Compile data for, prepare for execution by the Fund and file all the
Fund's federal and state tax returns and required tax filings other than
those required by this Agreement to be made by the Fund's custodian and
transfer agent.
4. Prepare compliance filings pursuant to state securities laws with the
advice of the Trust's counsel.
5. Prepare the Trust's Annual and Semi-Annual Reports to Shareholders
and amendments to its Registration Statements (on Form N-1A or any
replacement therefor).
<PAGE>
6. Compile data for, prepare and file timely Notices to the SEC required
pursuant to Rule 24f-2 under the 1940 Act.
7. Determine the daily pricing of the portfolio securities and
computation of the net asset value and the net income of Fund in accordance
with the Prospectus, resolutions of the Trust's Board of Trustees, and the
procedures set forth in EXHIBIT A: NET ASSET VALUE CALCULATIONS.
8. Keep and maintain the financial accounts and records of the Fund and
provide the Trust with certain reports, as needed or requested by the Fund.
9. Provide officers for the Trust as requested by the Trust's Board of
Trustees.
10. Perform fund accounting services for the Fund as set forth in EXHIBIT
B: FUND ACCOUNTING FUNCTIONS.
11. Generally assist in all aspects of the operations of the Fund.
C. Excepted Responsibilities. The Manager shall not perform the following
services pursuant to this Agreement:
1. Those performed by the custodian for the Trust under the Custodian
Agreement between the Trust and Investors Bank & Trust Company or any
successor custodian (the "Bank");
2. Those performed by the distributor(s) of the Trust's shares;
3. Those provided by the Trust's independent legal counsel;
4. Those performed by the independent public accountants for the Trust;
5. Those performed by the Fund's investment manager;
6. Those provided by the Trust's independent trustees, and
7. Those provided by Investors Bank & Trust Company pursuant to a
Transfer Agency Agreement.
D. Sub-contract Rights. The Manager may in its discretion (subject only to
approval by the Trust's Board of Trustees) delegate or subcontract some or all
of the Manager's duties, but shall remain ultimately responsible for the
provision of such services. The Manager shall be responsible for payment of all
compensation to any person or entity that Manager delegates any duties
hereunder.
3
<PAGE>
ARTICLE II: EXPENSES
---------------------
A. Expenses. The Manager shall assume all expenses of the Trust and the Fund,
including the Manager's reasonable out-of-pocket disbursements; provided,
however, that the Fund or the Trust shall pay:
1. Taxes and corporate fees payable to governmental agencies;
2. Brokerage commissions (which may be higher than other brokers would
charge if paid to a broker which provides brokerage and research services
to the Manager for use in providing investment advice and management to the
Fund and other accounts over which the Manager exercises investment
discretion) and other capital items payable in connection with the purchase
or sale of the Fund's investments (The words "brokerage and research
services" shall have the meaning given in the Securities Exchange Act of
1934 and the Rules and Regulations thereunder.);
3. Interest on account of any borrowing by the Fund;
4. Fees and expenses of the Trust's Trustees who are not interested
persons (as defined in the 1940 Act) of the Manager or of the Trust;
5. Fees payable to the Trust's certified independent public accountants;
6. Fees paid to the Trust's independent legal counsel;
7. Fees paid to the Fund's custodian;
8. Fees paid to the Fund's Investment Manager;
9. Payments due pursuant to any 12b-1 Plan adopted by the Trust and
applicable to the Fund; and
10. Fees required under any license agreement relating to the Fund's
ability to use certain trademarks relating to the S&P 500 Index.
ARTICLE III: COMPENSATION
--------------------------
The Manager's Compensation. For the services to be rendered and the facilities
to be furnished by the Manager as provided for in this Agreement, the Trust will
compensate the Manager as the Trust and the Manager may from time to time agree.
4
<PAGE>
ARTICLE IV: STANDARD OF CARE
-----------------------------
A. Standard of Care. The Manager shall use reasonable care in performing its
duties hereunder. In the performance of such duties, the Manager its directors,
officers, employees, and agents, successors and assigns will be protected and
will not be liable, and will be indemnified and held harmless by the Trust for
any error of judgement, mistake of law, or any other loss, claim, damages,
liabilities, or expenses arising by reason of it acting hereunder, by the Trust
except in the case of the negligence, willful misconduct, bad faith, reckless
disregard of duties or obligations hereunder, including knowing violations of
law, or fraud of the Manager, or of its officers, employees, or agents, except
as otherwise set forth in this Article IV. Notwithstanding anything herein to
the contrary, the Manager shall have no discretion over the Trust's assets or
choice of investments and shall not be held liable hereunder for any losses
suffered by the Fund.
B. Legal Advice. On issues that are legal in nature, the Manager will be
entitled to receive and act upon the advice of independent legal counsel of its
own selection, provided such counsel is chosen with reasonable care and which
can be counsel for the Trust, and will be without liability for any action taken
or thing done or omitted to be done in accordance with this Agreement in good
faith conformity with such advice. Except as otherwise agreed to by the Trust,
the Manager shall pay the fees and expenses of such counsel, unless such counsel
is the Trust's counsel. On issues that are related to financial accounting
matters, the Manager will be entitled to receive and act upon the advice of the
Trust's independent public accountants, provided that the Manager promptly
notifies the Trust that it has sought such advice and discloses the nature of
the matter. Except as otherwise agreed to by the parties, the Trust shall bear
the expenses and costs of obtaining advice from its independent public
accountants, if such advice is sought pursuant to this subsection B of Article
IV.
C. Good Faith Reliance. The Manager will be protected and not be liable, and
will be indemnified and held harmless for any action taken or omitted to be
taken by it in reliance upon any document, certificate or instrument which it
reasonably believes to be genuine and to be signed or presented by the proper
person or persons.
D. Damages. Notwithstanding anything in this Agreement to the contrary, in
no event shall the Manager or the Trust be liable to the other, or to any third
party, for special, punitive or consequential damages arising, directly or
indirectly from this Agreement, even if said party has been advised by the other
party of the possibility of such damages.
E. Acts of God. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God,
interruption of electrical power or other utilities, equipment or transmission
failure or damage reasonably beyond its control, or other causes reasonably
beyond its control, such party shall not be liable to the other for any damages
resulting from such failure to perform or otherwise from such causes. The
Manager and the Trust shall notify each other as soon as reasonably possible
following the occurrence of an event described in this subsection.
5
<PAGE>
ARTICLE V: EFFECTIVE DATE, TERMINATION AND AMENDMENT
-----------------------------------------------------
A. Effective Date. This Agreement will become effective on the Effective Date
and, unless sooner terminated as provided herein, will continue for an initial
term of one-year from the Effective Date and thereafter shall continue for
successive one year periods; provided however, that such continuance shall be
specifically approved at least annually by (i) the Board of Trustees of the
Trust, or (ii) by vote of a majority of the outstanding shares of the Fund (as
defined in the 1940 Act), provided however, that in either event the continuance
is also approved at least annually by a majority of the Trust's Trustees who are
not parties to this Agreement or interested persons (as defined in the 1940
Act)(other than a Trustees of the Trust) of the Manager or of the Trust by vote
cast in person at a meeting called for the purpose of voting on such approval.
B. Termination. Anything to the contrary herein notwithstanding, (1) this
Agreement may at any time be terminated by the Trust on 90 days' written notice
to the Manager without the payment of any penalty either by the Board of
Trustees of the Trust or by vote of majority of the outstanding shares of the
Fund (as defined in the 1940 Act); (2) this Agreement shall immediately
terminate in the event of its assignment (within the meaning of the 1940 Act);
and (3) this Agreement may be terminated by the Manager on 90 days' written
notice to the Trust without the payment of any penalty. Any notice under this
Agreement shall be given in writing, addressed and delivered, or mailed
postpaid, to the other party at the principal office of such party.
C. Amendment. This Agreement may be amended at any time by mutual written
consent of the parties, provided that such consent on the part of the Trust
shall have been approved at a meeting by the vote of a majority of the Trustees
of the Trust and by a majority of the Trustees of the Trust who are not parties
to this Agreement or interested persons (within the meaning of the 1940 Act) of
the Trust or of the Manager by vote cast in person at a meeting called for the
purpose of acting on such amendment.
ARTICLE VI: MISCELLANEOUS
--------------------------
A. Services Not Exclusive. The services of the Manager to the Trust and the
Fund under this Agreement are not exclusive and the Manager shall be free to
render similar services to others.
B. Use of Name by the Trust. The Trust recognizes the Manager's control of
the name "MassMutual" and agrees that its right to use this name is non-
exclusive and can be terminated by the Manager at any time. The use of such name
will automatically be terminated if at any time the Manager, a subsidiary or an
affiliate of the Manager ceases to be investment manager for the Fund, provided,
however, that the Fund's failure to have MassMutual or a subsidiary or an
affiliate of MassMutual be the investment manager for the Fund shall not result
in the automatic termination of its use of the name so long as (i) the Fund
invests all of its assets in another investment company, rather than in a
portfolio of securities, and (ii) MassMutual or a subsidiary
6
<PAGE>
or an affilaite of MassMutual is the Manager.
C. Interested and Affiliated Persons. It is understood that members of the
Board of Trustees, officers, employees or agents of the Trust or the Fund may
also be directors, officers, employees or agents of the Manager, and Sub-
Advisers, and that the Manager and Sub-Advisers, and their directors, officers,
employees or agents may be interested in the Fund as shareholders or otherwise.
D. Records and Confidentiality. All records pertaining to the operation and
administration of the Trust and the Fund (whether prepared by the Manager or
supplied to the Manager by the Trust or the Fund) are the property and subject
to the control of the Trust. In the event of the termination of this Agreement,
all such records in the possession of the Manager shall be promptly turned over
to the Trust free from any claim or retention of rights. All such records shall
be deemed to be confidential in nature and the Manager shall not disclose or use
any records or information obtained pursuant to this Agreement in any manner
whatsoever except as expressly authorized by the Trust or as required by federal
or state regulatory authorities. The Manager shall submit to all regulatory and
administrative bodies having jurisdiction over the operations of the Manager or
the Trust, present or future, any information, reports or other material
obtained pursuant to this Agreement which any such body may request or require
pursuant to applicable laws or regulations.
E. Disclaimer of Liability. A copy of the Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Board of Trustees of the Trust as Trustees and not individually and that the
obligations of this instrument are not binding upon any of the Trustees or
shareholders individually but are binding upon the assets and property of the
Trust; provided, however, that the Agreement and Declaration of Trust of the
Trust provides that the assets of a particular series of the Trust shall under
no circumstances be charged with liabilities attributable to any other series of
the Trust and that all persons extending credit to, or contracting with or
having any claim against a particular series of the Trust, shall look only to
the assets of that particular series for payment of such credit, contract or
claim.
F. Notices. Any notice or other instrument in writing authorized or required
by this Agreement to be given to either party hereto will be sufficiently given
if addressed to such party and mailed or delivered to it at its office at the
address set forth below; namely:
(a) In the case of notices sent to the Trust to:
MassMutual Institutional Trusts
1295 State Street
Springfield, Massachusetts 01111
Attention: Stephen L. Kuhn
Vice President & Secretary
7
<PAGE>
(b) In the case of notices sent to the Manager to:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, Massachusetts 01111
Attention: John V. Murphy
Executive Vice President
In the case of notices sent to either party, a copy to the Bank to:
Investors Bank & Trust Company
P.O. Box 1537
Boston, Massachusetts 02205-1537
Attention: Andrew Nesvett
or at such other place as such party may from time to time designate in writing.
I. Parties. This Agreement will be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Trust
without the written consent of the Manager or by the Manager without the written
consent of the Trust, authorized and approved by its Board; and provided further
that termination proceedings pursuant to Article V, Section B hereof will not be
deemed to be an assignment within the meaning of this provision.
J. Governing Law. This Agreement and all performance hereunder will be
governed by the laws of the Commonwealth of Massachusetts.
K. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Administrative and
Shareholder Services Agreement to be executed on the day and year first above
written.
MASSMUTUAL INSTITUTIONAL FUNDS
on behalf of MassMutual Indexed Equity Fund
8
<PAGE>
By:
-------------------------------------
Stuart H. Reese
President
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By:
-------------------------------------
John V. Murphy
Executive Vice President
9
<PAGE>
EXHIBIT A: NET ASSET VALUE CALCULATIONS
----------------------------------------
MassMutual shall compute and, unless otherwise directed by the Board, determine
as of the close of business on the New York Stock Exchange on each day on which
said Exchange is open for unrestricted trading and as of such other hours, if
any, as may be authorized by the Board the net asset value and the public
offering price of a share of capital stock of the Trust, such determination to
be made in accordance with the provisions of the Articles and By-laws of the
Trust and Prospectus and Statement of Additional Information relating to the
Trust, as they may from time to time be amended, and any applicable resolutions
of the Board at the time in force and applicable and promptly to notify the
Trust, the proper exchange and the NASD or such other persons as the Trust may
request of the results of such computation and determination.
In computing the net asset value hereunder, MassMutual may rely in good faith
upon information furnished to it by any Authorized Person in respect of `(i) the
manner of accrual of the liabilities of the Trust and in respect of liabilities
of the Trust not appearing on its books of account kept by the Bank, (ii)
reserves, if any, authorized by the Board or that no such reserves have been
authorized, (iii) the source of the quotations to be used in computing the net
asset value, (iv) the value to be assigned to any security for which no price
quotations are available, and (v) the method of computation of the public
offering price on the basis of the net asset value of the shares, and the Bank
shall not be responsible for any loss occasioned by such reliance or for any
good faith reliance on any quotations received from a source pursuant to (iii)
above.
10
<PAGE>
EXHIBIT B: FUND ACCOUNTING FUNCTIONS
-------------------------------------
MassMutual shall have the following responsibilities pursuant to (S)10 of
Article I(B):
1. Maintain the books and records of the Fund pursuant to applicable rules
of the Investment Company Act of 1940, including the following:
(a) Journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and disbursements of cash
and all other debits and credits, as required;
(b) General and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts as required;
(c) A monthly trial balance of all ledger accounts as required.
2. Daily pricing of all portfolio securities using securities valuations or
other methods as may be approved by the Fund's Trustees from time to time.
3. Daily posting of all income and expense accruals and reconciliation of
general ledger balances and total shares outstanding.
4. Computation of the daily net asset value as of the close of business of
the New York Stock Exchange on each day on which the Exchange is open for
business (See Exhibit A: Net Asset Value Calculations).
5. Reporting of the daily net asset value and dividend distributions to
transfer agent, Fund, management, NASDAQ, and others as requested by 5:30
p.m. each day.
6. Calculation of dividends and capital gain distributions.
7. Routine monitoring of the Fund's investments and providing prompt notice
of any violations of the diversification requirements, investment
restrictions or investment policies.
8. Calculation of yields and returns pursuant to S.E.C. formulas, and any
other performance calculations as required.
9. Providing Fund prices and performance numbers to industry reporting
services.
10. Preparing reports on expense limitations and net asset value analysis, as
requested.
11. Maintain historical records of all Fund net asset values and dividend
distributions.
11
<PAGE>
12. Preparing Blue Sky filings.
13. Preparing audited annual and unaudited semi-annual reports including
statement of investments, financial statements and footnotes.
14. Producing documents and responding to inquiries during S.E.C. audit, IRS
audit and others as required.
15. Providing the portfolio managers with cash availability based on security
settlements, shareholder activity, maturities, and income collections for
each fund by 8:30 a.m. each valuation day.
12
<PAGE>
Exhibit 8(c)
AMENDED AND RESTATED TRANSFER AGENCY AND SERVICE AGREEMENT
This AMENDED AND RESTATED TRANSFER AGENCY AND SERVICE AGREEMENT (the
"Transfer Agency Agreement") made as of the 3rd day of February, 1998 by and
among Massachusetts Mutual Life Insurance Company , a corporation organized
under the laws of Massachusetts ( "MassMutual"), MassMutual Institutional Funds,
a Massachusetts business trust (the "Trust"), and INVESTORS BANK & TRUST
COMPANY, a Massachusetts trust company (the "Bank").
WHEREAS, the Trust was organized on or about May 28, 1993 and is registered
as an open end management investment Company under the Investment Company Act of
1940, as amended (the "1940 Act");
WHEREAS, the Trust is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets and the Trust is authorized to issue multiple classes in each
such series ("Class(s)");
WHEREAS, the Trust is authorized to issue and has offered shares in each of
the series and classes listed on Appendix A hereto (such series and classes,
together with all other series and classes subsequently established by the Trust
and made subject to the Agreement in accordance with Section 17, being herein
referred to as the "Fund(s)");
WHEREAS, MassMutual has entered into administrative, shareholder services,
and investment management agreements with each of the Funds, which agreements
impose upon MassMutual the obligation to provide, or cause to be provided,
certain services, including transfer agency services;
WHEREAS, the Bank is duly registered as a transfer agent as provided in
Section 17A(c) of the Securities Exchange Act of 1934, as amended, (the "1934
Act");
WHEREAS, MassMutual, the Trust and the Bank have entered into a Transfer
Agency and Service Agreement dated as of the 29th day of August 1994 pursuant to
which the Bank agreed to act the Trust's Transfer Agent, as its dividend
disbursing agent and as its agent in connection with certain other activities;
and
WHEREAS, MassMutual, the Trust and the Bank each desire to amend and
restate the Transfer Agency and Service Agreement dated as of the 29th day of
August 1994.
NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
MassMutual and the Bank agree as follows:
1. Terms of Appointment; Duties of the Bank.
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1.1 Subject to the terms and conditions set forth in this Agreement, the
Trust hereby employs and appoints the Bank to act, and the Bank agrees to act
as, (I) transfer agent for each of the Fund(s)' authorized and issued shares of
beneficial interest ("Shares"), (ii) dividend disbursing agent and (iii) agent
in connection with any accumulation, open-account or similar plans provided to
the shareholders of the Trust appearing on the record books of the Bank
("Shareholders") and set out in the currently effective Prospectus and Statement
of Additional Information, as each may be amended from time to time, (the
"Prospectus") of the Trust, including without limitation any periodic investment
plan or periodic withdrawal program.
<PAGE>
1.2 Without limiting the generality of the foregoing, the Bank agrees that
it will perform the following specific services for each Fund in accordance with
Trust policies set forth in the Prospectus or established by the Trust's Board
of Trustees:
(a) In connection with procedures established from time to time by
agreement between MassMutual and the Bank, the Bank shall:
(i) Receive for acceptance orders and payment for the
purchase of Shares and promptly deliver payment and appropriate documentation
therefor to the custodian of the Trust appointed by the Board of Trustees of the
Trust (the "Custodian");
(ii) Pursuant to purchase orders, issue the appropriate number
of Shares and hold such issued Shares in the appropriate Shareholder account;
(iii) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation therefor to the Custodian;
(iv) At the appropriate time as and when it receives monies
paid to it by the Custodian with respect to any redemption of shares, pay over
or cause to be paid over in the appropriate manner such monies as instructed by
the redeeming Shareholders;
(v) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and
distributions declared by the Trust on behalf of a Fund;
(vii) Create and maintain all necessary records including those
specified in Article 10 hereof, in accordance with all applicable laws, rules
and regulations, including but not limited to records required by Section 31(a)
of the 1940 Act, and those records pertaining to the various functions performed
by it hereunder. All records shall be available for inspection and use by the
Trust and its designate. Where applicable, such records shall be maintained by
the Bank for the periods and in the places required by Rule 31a-2 under the 1940
Act;
(viii) Make available during regular business hours all records
and other data created and maintained pursuant to this Agreement for reasonable
audit and inspection by the Trust, or any person retained by the Trust. Upon
reasonable notice by the Trust, the Bank shall make available during regular
business hours its facilities and premises employed in connection with its
performance of this Agreement for reasonable visitation by the Trust, or any
person retained by the Trust;
(ix) Record the issuance of Shares of the Trust and maintain,
pursuant to Rule 17Ad-10(e) under the 1934 Act, a record of the total number of
Shares by Fund and by Class of the Trust which are authorized, based upon data
provided to it by the Trust, and issued and outstanding. The Bank shall also
provide the Trust on a regular basis with the total number of Shares which are
authorized and issued and outstanding and shall have no obligation, when
recording the issuance of Shares, to monitor the issuance of such Shares or to
take cognizance of any laws relating to the issue or sale of such Shares, which
functions shall be the sole responsibility of the Trust.
<PAGE>
(b) In addition to and not in lieu of the services set forth in the
above paragraph (a) or in any Schedule hereto, the Bank shall: (i) Except as
provided in paragraph 1.3 herein or in writing and agreed to by the Bank, the
Trust and MassMutual, perform all of the customary services of a transfer agent,
dividend disbursing agent and, as relevant, agent in connection with
accumulation, open-account or similar plans (including without limitation any
periodic investment plan or periodic withdrawal program); including maintaining
all Shareholder accounts. and (ii) Provide a system which will enable the Trust
to monitor the total number of Shares sold in each State or jurisdiction in
which Shares are sold and monitor the daily activity for each State or
jurisdiction in which Shares of the Trust are registered.
(c) Additionally, the Bank shall utilize a system to identify all
share transactions which involve purchase and redemption orders that are
processed at a time other than the time of the computation of net asset value
per share next computed after receipt of such orders, and shall compute the net
effect upon the Fund(s) of such transactions so identified on a daily and
cumulative basis.
1.3 The Bank shall not be responsible for providing Shareholder services,
including, but not limited to: preparing Shareholder meeting lists, mailing
proxies, receiving and tabulating proxies, preparing and mailing Shareholder
reports and prospectuses to current Shareholders, withholding federal taxes and
preparing and filing U.S. Treasury Department Forms 1099 and other appropriate
forms required with respect to dividends and distributions by federal
authorities for all Shareholders.
2. Sale of Trust Shares.
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2.1 Whenever the Trust shall sell or cause to be sold any Shares of a
Fund, MassMutual or the Trust shall deliver or cause to be delivered to the Bank
a document or electronic file duly specifying: (i) the name of the Fund and the
Class thereof whose Shares were sold; (ii) the number of Shares sold, trade
date, and price; (iii) the amount of money to be delivered to the Custodian for
the sale of such Shares and specifically allocated to such Fund; and (iv) in the
case of a new account, a new account application or sufficient information to
establish an account, and (v) the name of the holder.
2.2 The Bank will, upon receipt by it of a check or other payment
identified by it as an investment in Shares of one of the Funds and drawn or
endorsed to the Bank as agent for, or identified as being for the account of,
one of the Funds, promptly deposit such check or other payment to the
appropriate account postings necessary to reflect the investment. The Bank will
notify the Trust, or its designee, and the Custodian of all purchases and
related account adjustments.
2.3 Under procedures as established by mutual agreement between MassMutual
and the Bank, the Bank shall credit to the purchaser or its authorized agent's
account such Shares, computed to the nearest three decimal points, as he is
entitled to receive, based on the appropriate net asset value of the Funds'
Shares, determined in accordance with the Prospectus and any applicable Federal
law or regulation. In issuing Shares to a purchaser or its authorized agent, the
Bank shall be entitled to rely upon the latest directions, if any, previously
received by the Bank from the purchaser or its authorized agent concerning the
delivery of such Shares. Unless otherwise agreed upon, the Bank shall have an
obligation to provide confirmations of share transactions.
2.4 The Bank shall not be required to issue any Shares of the Trust where
it has received a written instruction from MassMutual or the Trust or written
notification from any appropriate Federal or State authority that the sale of
the Shares of the Fund(s) in question has been suspended or discontinued, and
the Bank shall be entitled to rely upon such written instructions or written
notification.
<PAGE>
2.5 Upon the issuance of any Shares of any Fund(s) in accordance with
foregoing provisions of this Section, the Bank shall not be responsible for the
payment of any original issue or other taxes, if any, required to be paid by the
Trust in connection with such issuance.
2.6 The Bank may establish such additional rules and regulations governing
the transfer or registration of Shares as it may deem advisable and consistent
with such rules and regulations generally adopted by transfer agents (not
inconsistent with this Agreement). Moreover, with the written consent of the
Trust, the Bank may adopt any other rules and regulations.
3. Returned Checks. In the event that any check or other order for the
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transfer of money is returned unpaid for any reason, the Bank will take such
steps as the Bank may, in its discretion, deem appropriate to protect the Trust
from financial loss or as the Trust or its designee may instruct. Provided that
the standard procedures, as agreed upon from time to time, between the Trust and
the Bank, regarding purchases and redemptions of Shares, are adhered to by the
Bank, the Bank shall not be liable for any loss suffered by a Fund as a result
of returned or unpaid purchase or redemption transactions. Legal or other
expenses incurred to collect amounts owed to a Fund as a consequence of returned
or unpaid purchase or redemption transactions shall be an expense of that Fund.
4. Redemptions. Shares of any Fund may be redeemed in accordance with the
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procedures set forth in the Prospectus of the Trust and the Bank will duly
process all redemption requests transmitted to it in accordance with the Trust
policies set forth in the Prospectus.
5. Transfers and Exchanges. The Bank is authorized to review and process
-----------------------
transfers of Shares of each Fund, exchanges between Funds on the records of the
Funds maintained by the Bank, and exchanges between the Trust and any other
entity as may be permitted by the Prospectus of the Trust and, if applicable, in
accordance with instructions from MassMutual. The Bank will, upon an order to
transfer Shares by or on behalf of the registered holder thereof in proper form,
credit the same to the transferee on its books. If Shares are to be exchanged
for Shares of another Fund, the Bank will process such exchange in the same
manner as a redemption and sale of Shares, except that it may in its reasonable
discretion waive requirements for information and documentation.
6. Right to Seek Assurances. The Bank reserves the right to refuse to transfer
------------------------
or redeem Shares until it is satisfied that the requested transfer or redemption
is legally authorized, and it shall incur no liability for the refusal, in good
faith, to make transfers or redemptions which the Bank, in its reasonable
judgment, deems improper or unauthorized, or until it is satisfied that there is
no basis for any claims adverse to such transfer or redemption. The Bank may, in
effecting transfers, rely upon the provisions of the Uniform Act for the
Simplification of Fiduciary Security Transfers or the Uniform Commercial Code,
as the same may be amended from time to time, which in the opinion of legal
counsel for the Trust do not require certain documents in connection with the
transfer or redemption of Shares of any Fund, and the Trust shall indemnify the
Bank for any act done or omitted by it in reliance upon such laws or opinions of
counsel of the Trust.
7. Distributions.
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7.1 The Trust will promptly notify the Bank of the declaration of any
dividend or distribution. The Trust shall furnish to the Bank a resolution of
the Board of Trustees of the Trust certified by the Secretary (a "Certificate"):
(i) authorizing the declaration of dividends on a specified periodic basis and
authorizing the Bank to rely on oral instructions or a Certificate specifying
the date of the declaration of such dividend or distribution, the date of
payment thereof, the record date as of which Shareholders entitled to payment
shall be determined and the amount payable per Share to Shareholders
<PAGE>
of record as of such record date and the total amount payable to the Bank on the
payment date; or (ii) setting forth the date of the declaration of any dividend
or distribution by a Fund, the date of payment thereof, the record date as of
which Shareholders entitled to payment shall be determined, and the amount
payable per Share to the Shareholders of record as of the record date and the
total amount payable to the Bank as the Trust's disbursing agent on the payment
date.
7.2 To the extent that dividends are not automatically reinvested, the
Bank, on behalf of the Trust, shall instruct the Custodian to place in a
dividend disbursing account funds equal to the cash amount of any dividend or
distribution to be paid out. The Bank will calculate, prepare and mail checks to
(at the address as it appears on the records of the Bank), or (where
appropriate) credit such dividend or distribution to the account of, Fund
Shareholders, and maintain and safeguard all underlying records.
7.3 The Bank will promptly replace lost checks at its reasonable
discretion and in conformity with regular business practices.
7.4 The Bank will maintain all records necessary to reflect the crediting
of dividends or distributions which are reinvested in Shares of the Trust,
including without limitation daily dividends or distributions.
7.5 The Bank shall not be liable for any improper payments made in
accordance with a resolution of the Trust or Board of Trustees of the Trust.
7.6 If the Bank shall not receive from the Custodian sufficient cash to
make payment to all Shareholders of the Trust as of the record date, the Bank
shall, upon notifying the Trust, withhold payment to all Shareholders of record
as of the record date until such sufficient cash is provided to the Bank.
8. Other Duties. In addition to the duties expressly provided for herein, the
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Bank shall perform such other duties and functions and shall be paid such
amounts therefor as may from time to time be agreed to in writing.
9. Taxes. On behalf of the Trust, MassMutual will file all tax information
-----
returns concerning distributions such as the payment of dividends and capital
gain distributions and tax withholding with the proper Federal, State and local
authorities as are required by law to be filed by the Trust and shall withhold
such sums as are required to be withheld by applicable law.
10. Books and Records.
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10.1 The Bank shall maintain confidential records showing for each
Shareholder's account the following: (i) names, addresses and tax identification
numbers; (ii) numbers of Shares of each Fund and Class held; (iii) historical
information regarding the account of each Shareholder, including dividends and
distributions paid and date and price of all transactions on a Shareholder's
account; (iv) any stop or restraining order placed against a Shareholder's
account; (v) information with respect to withholdings by Fund; (vi) any capital
gain or dividend reinvestment order, plan application, dividend address and
correspondence relating to the current maintenance of a Shareholder's account by
Fund; (vii) [intentionally omitted]; (viii) any information required in order
for the Bank to perform the calculations contemplated or required by this
Agreement; and (ix) such other information and data as may be required by
applicable law or as mutually agreed upon by both parties.
<PAGE>
10.2 Any records required to be maintained by Rule 31a-1 under the 1940
Act will be preserved for the periods prescribed in Rule 31a-2 under the 1940
Act. Such records may be inspected by MassMutual or the Trust during regular
business hours upon reasonable notice. The Bank may, at its option at any time,
and shall forthwith upon MassMutual or the Trust's demand, turn over to
MassMutual or the Trust and cease to retain in the Bank's files, records and
documents created and maintained by the Bank in performance of its service or
for its protection. At the end of the retention period, such documents will
either be turned over to MassMutual or the Trust, or destroyed in accordance
with the Trust's authorization.
10.3 Procedures applicable to the services to be performed hereunder may
be established from time to time by agreement between the Fund(s) and the Bank.
The Bank shall have the right to utilize any shareholder accounting and
recordkeeping systems which, in its reasonable opinion, qualifies to perform any
services to be performed hereunder. The Bank shall keep records relating to the
services performed hereunder, in the form and manner as it may deem advisable.
11. Fees and Expenses.
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11.1 For performance by the Bank pursuant to this Agreement, MassMutual
agrees to pay the Bank an annual maintenance fee for each Shareholder account as
set out in a schedule agreed to by all parties from time to time. Such fees and
out-of-pocket expenses and advances identified under Section 11.2 below may be
changed from time to time subject to mutual written agreement between MassMutual
and the Bank.
11.2 In addition to the fee paid under Section 11.1 above, MassMutual
agrees to reimburse the Bank for out-of-pocket expenses incurred by the Bank for
the items set out in a schedule agreed to by all parties from time to time. In
addition, any other expenses incurred by the Bank at the specific written
request of MassMutual including, without limitation, any equipment or supplies
which MassMutual specifically orders or requires the Bank to purchase, will be
reimbursed by MassMutual.
11.3 MassMutual agrees to pay all fees and reimbursable expenses within
thirty days following its receipt of the respective billing notice in accordance
with procedures agreed upon by the parties to this Transfer Agency Agreement.
Postage for mailing of dividends, proxies, Fund reports and other mailings to
all shareholder accounts shall be advanced to the Bank by MassMutual at least
seven (7) days prior to the mailing date of such materials.
12. Representations and Warranties of the Bank.
------------------------------------------
The Bank represents and warrants to MassMutual and the Trust that:
12.1 It is a trust company duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
12.2 It is empowered under applicable laws and by its charter and by-laws
to enter into and perform this Transfer Agency Agreement.
12.3 All requisite corporate proceedings have been taken to authorize it
to enter into and perform this Agreement.
12.4 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Transfer Agency Agreement.
<PAGE>
13. Representations and Warranties of the Trust and MassMutual.
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13.1 The Trust represents and warrants to the Bank that:
(a) It is a business trust duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
(b) It is empowered under applicable laws and by its trust documents
and by-laws to enter into and perform this Transfer Agency Agreement.
(c) All proceedings required by said trust documents and by-laws
have been taken to authorize it to enter into and perform this Agreement.
(d) The trust is an open-end investment company registered under the
1940 Act.
(e) A registration statement on Form N-1A (including a prospectus
and statement of additional information) under the Securities Act of 1933 and
the 1940 Act has been filed with the Commission and is currently effective -- or
will become effective prior to the Trust commencing the offer and sale to the
public of its Shares, and will remain effective, and appropriate state
securities law filings, if necessary, will be or have been made and will
continue to be made, with respect to all Shares of the Trust being offered for
sale.
(f) When Shares are hereafter issued in accordance with the terms of
the Prospectus, such Shares shall be validly issued, fully paid and
nonassessable by the Fund(s).
13.2 MassMutual represents and warrants to the Bank that:
(a) It is a mutual life insurance company duly organized and
existing and in good standing under the laws of the Commonwealth of
Massachusetts.
(b) It is empowered under applicable laws and by its charter and by-
laws to enter into and perform this Transfer Agency Agreement.
(c) All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Transfer Agency Agreement.
14. Indemnification.
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14.1 Except as set forth in paragraphs 14.2 and 14.5 hereof, in no event
shall the Bank or any of its officers, directors, employees or agents
(collectively, the "Indemnified Parties") be liable to MassMutual, and
MassMutual shall indemnify and hold the Bank and the Indemnified Parties
harmless from and against any and all losses, damages, liability, charges,
payments, costs and expenses, including counsel fees, (a "Claim") arising out of
or attributable to:
(a) Any actions taken or omitted to be taken by the Bank or its
agents or subcontractors in good faith in reliance on, or use by the Bank or its
agents or subcontractors of, information, records and documents which (i) are
received by the Bank or its agents or subcontractors and furnished to such party
by or on behalf of the Fund(s), (ii) have been prepared and/or maintained by
<PAGE>
the Fund(s) or any other person or firm on behalf of the Fund(s), or (iii) were
received by the Bank or its agents or subcontractors from a prior transfer
agent.
(b) Any action taken or omitted to be taken by the Bank in good
faith reliance upon any law, act, regulation (a "Regulation") or interpretation
of a Regulation even though such Regulation may thereafter have been altered,
changed, amended or repealed.
(c) MassMutual's or the Trust's refusal or failure to comply with
the terms of this Agreement, or which arise out of MassMutual's, the Trust's or
their directors', officers', employees', agents', or subcontractors' bad faith,
negligence, willful misconduct, reckless disregard of duties hereunder,
including knowing violations of law, or fraud or which arise out of the breach
of any representation or warranty hereunder.
(d) The reliance on, or the carrying out by the Bank or its agents
or subcontractors of, any instructions or requests, whether written or oral, of
an officer or employee of MassMutual or the Trust.
(e) The offer or sale of Shares by the Trust in violation of (i) any
requirement under the federal securities laws or regulations; (ii) any
requirement under the securities laws or regulations of any state that such
Shares be registered in such State; or (iii) any stop order or other
determination or ruling by any federal or state agency with respect to the offer
or sale of such Shares in such State.
(f) The failure of MassMutual or the Trust to convey information
regarding share purchase and redemptions in a timely manner.
(g) On issues that are legal in nature, the Bank will be entitled to
receive and act upon the advice of independent legal counsel of its own
selection, provided such counsel is chosen with reasonable care and which can be
counsel for the Trust, and will be without liability for any action taken or
thing done or omitted to be done in accordance with this Agreement in good faith
conformity with such advice. Except as otherwise agreed to by the Trust, the
Bank shall pay the fees and expenses of such counsel, unless such counsel is the
Trust's counsel;
14.2 Indemnification by MassMutual or the Trust under this Transfer Agency
Agreement shall not apply to actions or omissions of the Bank or its directors,
officers, employees, agents or subcontractors in cases of its or their own bad
faith, negligence, willful misconduct, reckless disregard of duties hereunder,
including knowing violations of law or fraud.
14.3 At any time the Bank may apply to any officer of MassMutual or the
Trust for instructions, with respect to any matter arising in connection with
the services to be performed by the Bank under this Transfer Agency Agreement.
The Bank and its agents or subcontractors shall not be liable and shall be
indemnified by MassMutual and the Trust for any action taken or omitted by it in
reliance upon such instructions except for a knowing violation of law. The Bank,
its agents and subcontractors shall be protected and indemnified in acting upon
any paper or document furnished by or on behalf of the Fund(s), reasonably
believed to be genuine and to have been signed by the proper person or persons,
or upon any instruction, information, data, records or documents provided to the
Bank or its agents or subcontractors by machine readable input, telex, CRT data
entry or other similar means authorized by the Fund(s), and the Bank, its agents
and subcontractors shall not be held to have notice of any change of authority
of any person, until receipt of written notice thereof has been sent from
MassMutual or the Fund(s) to the Bank.
<PAGE>
14.4 In the event either party is unable to perform its obligations under
the terms of this Agreement because of acts of God, interruption of electrical
power or other utilities, equipment or transmission failure or damage reasonably
beyond its control, or other causes reasonably beyond its control, such party
shall not be liable to the other for any damages resulting from such failure to
perform or otherwise from such causes. The Bank, the Trust and MassMutual shall
notify each other as soon as reasonably possible following the occurrence of an
event described in this subsection.
14.5 Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any act
or failure to act hereunder as contemplated by this Agreement.
14.6 In order that the indemnification provisions contained in this
Article 14 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking the indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent, which consent shall not be unreasonably
withheld.
15. Covenants of MassMutual and the Trust and the Bank.
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15.1 MassMutual has furnished to the Bank the following:
(a) Officers' Certificate stating that the Trust Officer and the
MassMutual Officer signing this Transfer Agency Agreement have the authority to
bind MassMutual and the Trust, respectively, to the terms and conditions of this
Agreement, to appoint the Bank as Transfer Agent as provided herein, and to
execute and deliver this Transfer Agency Agreement.
(b) A copy of the trust documents and by-laws of the Trust and all
amendments thereto.
(c) Copies of each vote of the Trustees designating authorized
persons to give instructions to the Bank, and a Certificate providing specimen
signatures for such authorized persons.
(d) Certificates as to any change in any officer or Trustee of the
Trust.
(e) All account application forms and other documents relating to
shareholder accounts or relating to any plan, program or service offered by the
Trust.
(f) A list of all Shareholders of the Fund(s) with the name,
address and tax identification number of each Shareholder, and the number of
Shares of the Fund(s) held by each, certificate numbers and denominations ( if
any certificates have been issued), lists of any account against which stops
have been placed, together with the reasons for said stops, and the number of
Shares redeemed by the Fund(s).
(g) An opinion of counsel for the Trust with respect to the
validity of the Shares and the status of such Shares under the Securities Act of
1933.
<PAGE>
(h) Copies of the Fund(s) registration statement on Form N-1A (if
applicable)as amended and declared effective by the Securities and Exchange
Commission and all post-effective amendments thereto.
15.2 MassMutual shall promptly furnish to the Bank the following:
(a) Any amendments or updates to the documents as specified in
Section 15.1 of this Agreement.
(b) All documents listed in Section 15.1 hereof relating to any new
or additional Funds or series added to this Agreement pursuant to Section 17
hereof after the date hereof.
(c) Such other certificates, documents or opinions as the Bank may
deem necessary or appropriate for the Bank in the proper performance of its
duties hereunder.
15.3 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Trust for safekeeping of check forms and
facsimile signature imprinting devices, if any; and for the preparation or use,
and for keeping account of such forms and devices.
15.4 The Bank shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the 1940 Act and the Rules thereunder, the Bank agrees
that all such records prepared or maintained by the Bank relating to the
services to be performed by the Bank hereunder are the confidential property of
the Trust and will be preserved, maintained and made available in accordance
with such Section and Rules, and will be surrendered to the Trust on and in
accordance with its request.
15.5 The Bank and the Trust agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Transfer Agency
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law.
15.6 In case of any requests or demands for the inspection of the
Shareholder records of the Trust, the Bank will endeavor to notify the Trust and
to secure instructions from an authorized officer of the Trust as to such
instruction. The Bank reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be
subject to enforcement or other action by any court or regulatory body for the
failure to exhibit the Shareholder records to such person.
16. Term of Agreement. This Agreement shall become effective with respect to
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each Fund on the date hereof (the "Effective Date") and shall continue in effect
from year to year thereafter with respect to each Fund, provided that this
Transfer Agency Agreement may be terminated by either MassMutual or the Bank at
any time without payment of any penalty upon ninety (90) days written notice to
the other. In the event such notice is given by MassMutual, such notice shall
also designate a successor transfer agent.
17. Additional Funds. In the event that the Trust establishes one or more
----------------
series of Shares in addition to the series listed on Appendix A hereto with
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respect to which it desires to have the Bank render services as transfer agent
under the terms hereof, it shall so notify the Bank in writing, and if the Bank
agrees in writing to provide such services, such series of Shares shall become a
Fund hereunder and Appendix A shall be appropriately amended.
----------
<PAGE>
18. Assignment.
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18.1 Except as provided in Section 18.3 below, neither this Transfer
Agency Agreement nor any rights or obligations hereunder may be assigned by
either party without the written consent of the other party.
18.2 This Transfer Agency Agreement shall inure to the benefit of and be
binding upon the parties and their respective permitted successors and assigns.
18.3 The Bank, may without further consent on the part of MassMutual,
subcontract for the performance of any of the services to be provided hereunder
to third parties, including any affiliate of the Bank, provided that the Bank
shall give MassMutual 60 days' prior notice or such shorter period as is
practicable under the circumstances, and provided further that the Bank shall
remain liable hereunder for any acts or omissions of any subcontractor as if
performed by the Bank.
19. Amendment. This Transfer Agency Agreement may be amended or modified only
---------
by a written agreement executed by both parties.
20. Governing Law. This Transfer Agency Agreement shall be construed and the
-------------
provisions thereof interpreted under and in accordance with the laws of the
Commonwealth of Massachusetts, without regard to its conflict of laws
provisions.
21. Merger of Agreement and Severability.
------------------------------------
21.1 This Transfer Agency Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with respect to
the subject hereof whether oral or written.
21.2 In the event any provision of this Transfer Agency Agreement shall be
held unenforceable or invalid for any reason, the remainder of the Agreement
shall remain in full force and effect.
21.3 This Transfer Agency Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original; but such
counterparts shall together, constitute only one instrument.
22. Notices. Any notice or other instrument in writing authorized or required
-------
by this Transfer Agency Agreement to be given to either party hereto will be
sufficiently given if addressed to such party and mailed or delivered to it at
its office at the address set forth below:
To MassMutual:
Massachusetts Mutual Life
Insurance Company
1295 State Street
Springfield, MA 0111
<PAGE>
Attention: Thomas M. Kinzler, Second Vice President and
Associate General Counsel
To the Bank:
Investors Bank & Trust Company
200 Clarendon Street, P.O. Box 9130
Boston, Massachusetts 02117-9130
Attention: Andrew M. Nesvet, Director, Client Management
With a copy to: John E. Henry, General Counsel
If to either, a copy to:
To the Trust
MassMutual Institutional Funds
1295 State Street
Springfield, MA 01111
Attention: Raymond B. Woolson, Treasurer
23. Disclaimer and Limitation of Liability. A copy of the Trust's Agreement and
--------------------------------------
Declaration of Trust of the Trust is on file with the Secretary of the
Commonwealth of Massachusetts, and notice is hereby given that this instrument
is executed on behalf of the Board of Trustees of the Trust as Trustees and not
individually and that the obligations of this instrument are not binding upon
any of the Trustees of shareholders individually but are binding upon the assets
and property of the Trust; provided, however, that the Agreement and Declaration
of Trust of the Trust provides that the assets of a particular series of the
Trust shall under no circumstances be charges with liabilities attributable to
any other series of the Trust and that all persons extending credit to, or
contracting with or having any claim against a particular series of the Trust
shall look only to the assets of that particular series for payment of such
credit, contract or claim.
24. Insurance
24.1 The Bank shall at all times maintain insurance coverages adequate for
the nature of its operations, including directors and officers, errors and
omissions, and fidelity bond insurance coverages. The Bank shall have the Trust
named as a Certificate Holder on each of these coverages, and provide MassMutual
with Certificates of Insurance at each policy renewal. The Certificate shall
provide that MassMutual receive a minimum of twenty (20) days' notice of
cancellation, non-renewal, or materials change of policy coverages. The Bank
shall provide MassMutual with copies of its insurance policies, upon request. If
at any time, due to a material adverse change in policy coverages, MassMutual
reasonably believes that such coverages are insufficient in any material
respect, or if any policy is placed with an insurer with an A.M. Best rating of
less than A 12, the Bank shall take reasonable steps to satisfy MassMutual's
concerns.
24.2 Notwithstanding anything in this Agreement to the contrary, the Bank
shall have in place reasonable business continuity and disaster recovery
procedures and systems and shall provide MassMutual, at least annually, test
results of such procedures and systems.
<PAGE>
25. Miscellaneous. If the Bank acts upon instructions from MassMutual or the
-------------
Trust, even if conflicting instructions are subsequently received, it shall be
indemnified and held harmless by the Trust and MassMutual for any losses or
claims that might have arisen from its actions.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Transfer Agency
Agreement to be executed in their names and on their behalf under their seals by
and through their duly authorized officers, as of the day and the year first
above written.
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By:
---------------------------
Name:
Title:
INVESTORS BANK & TRUST COMPANY
By:
---------------------------
Name:
Title:
AGREED TO AND ACCEPTED BY
MASSMUTUAL INSTITUTIONAL FUNDS
By:
---------------------------
Name:
Title:
<PAGE>
Appendices
----------
Appendix A............................... Series or Portfolios
<PAGE>
APPENDIX A
----------
Series or Portfolios
--------------------
<TABLE>
<CAPTION>
Portfolios Classes
---------- -------
<S> <C>
MassMutual Core Bond Fund A,Y,S
MassMutual International Equity Fund A,Y,S
MassMutual Short-Term Bond Fund A,Y,S
MassMutual Prime Fund A,Y,S
MassMutual Value Equity Fund A,Y,S
MassMutual Small Cap Value Equity Fund A,Y,S
MassMutual Balanced Fund A,Y,S
MassMutual Indexed Equity Fund A,Y,S
</TABLE>
<PAGE>
Exhibit 9
FORM OF
THIRD PARTY FEEDER FUND
AGREEMENT
AMONG
MASSMUTUAL INSTITUTIONAL FUNDS
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
AND
MASTER INVESTMENT PORTFOLIO
dated as of
February 9, 1998
<PAGE>
TABLE OF CONTENTS
Preambles 1
ARTICLE I. REPRESENTATIONS AND WARRANTIES
1.1 Trust
1.2 MIP
1.3 MassMutual
ARTICLE II. COVENANTS
2.1 Trust
2.2 MIP
2.3 Reasonable Actions
ARTICLE III. INDEMNIFICATION
3.1 Trust and MassMutual
3.2 MIP
ARTICLE IV. ADDITIONAL AGREEMENTS
4.1 Access to Information
4.2 Confidentiality
4.3 Obligations of Trust and MIP
ARTICLE V. TERMINATION, AMENDMENT
5.1 Termination
5.2 Amendment
ARTICLE VI. GENERAL PROVISIONS
6.1 Expenses
6.2 Headings
6.3 Entire Agreement
6.4 Successors
6.5 Governing Law
6.6 Counterparts
6.7 Third Parties
6.8 Notices
6.9 Interpretation
6.10 Operation of Fund
6.11 Relationship of Parties; No Joint Venture, Etc.
6.12 Use of Name
Signatures
<PAGE>
AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the 1st day
of November, 1997, by and among MassMutual Institutional Funds, a Massachusetts
business trust ("Trust"), for itself and on behalf of its series, the MassMutual
Indexed Equity Fund ("Fund"), Massachusetts Mutual Life Insurance Company
("MassMutual"), a __________ corporation, and Master Investment Portfolio
("MIP"), a Delaware business trust, for itself and on behalf of its series, the
S&P 500 Index Master Portfolio ("Portfolio").
WITNESSETH
WHEREAS, Trust and MIP are each open-end management investment companies;
WHEREAS, Fund and Portfolio have the same investment objective and
substantially the same investment policies;
WHEREAS, Fund desires to invest on an ongoing basis all of its investable
assets (the "Assets") in Portfolio (the "Investments") on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual promises made
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES
1. 1 Trust. Trust represents and warrants to MIP that:
(a) Organization. Trust is a voluntary association with transferable
shares organized and existing under and by virtue of the laws of The
Commonwealth of Massachusetts and Fund is a duly and validly designated series
of Trust. Each of Trust and Fund has the requisite power and authority to own
its property and conduct its business as proposed to be conducted pursuant to
this Agreement.
(b) Authorization of Agreement. The execution and delivery of this
Agreement by Trust on behalf of Fund and the conduct of business contemplated
hereby, including the implementation of the Investments, have been duly
authorized by all necessary action on the part of Trust's Board of Trustees and
no other action or proceeding is necessary for the execution and delivery of
this Agreement by Fund, or the performance by Fund of its obligations hereunder.
This Agreement when executed and delivered by Trust on behalf of Fund shall
constitute a legal, valid and binding obligation of Trust, enforceable against
Fund in accordance with its terms. No
<PAGE>
meeting of, or consent by, shareholders of Fund is necessary to approve or
implement the Investments.
(c) 1940 Act Registration. Trust is duly registered as an open-end
management investment company under the Investment Company Act of 1940 (the
"1940 Act") and such registration is in full force and effect.
(d) SEC Filings. Trust has duly filed all SEC Filings, as defined
herein, relating to Fund and required to be filed with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of 1933 (the
"1933 Act") and the 1940 Act. All SEC Filings relating to Fund comply in all
material respects with the requirements of the applicable Securities Laws, as
defined herein, and do not, as of the date of this Agreement, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(e) Fund Assets. Fund currently intends on an ongoing basis to invest
its Assets solely in Portfolio, although it reserves the right to invest Assets
in other securities and/or to redeem units of the Portfolio at any time without
notice.
(f) Registration Statement. Trust has reviewed Portfolio's
registration statement on Form N-lA, as filed with the SEC, and agrees that
Fund's Investments will be subject to the terms thereof. Fund understands and
acknowledges that Portfolio has the right, in its sole discretion, at any time,
to limit or reject additional Investments from Fund.
(g) Insurance. Fund has in force reasonable insurance coverage
against any and all liabilities that may arise as a result of Fund's business as
a registered investment company.
1.2 MIP. MIP represents and warrants to Trust that:
(a) Organization. MIP is a trust duly organized, validly existing and
in good standing under the laws of the State of Delaware and Portfolio is a duly
and validly designated series of MIP. Each of MIP and Portfolio has the
requisite power and authority to own its property and conduct its business as
now being conducted.
(b) Authorization of Agreement. The execution and delivery of this
Agreement by MIP on behalf of Portfolio and the conduct of business contemplated
hereby have been duly authorized by all necessary action on the part of MIP's
Board of Trustees and no other action or proceeding is necessary for the
execution and delivery of this Agreement by Portfolio, or the performance by
Portfolio of its obligations hereunder. This Agreement when executed and
delivered by MIP on behalf of Portfolio shall constitute a legal, valid and
binding obligation of MIP and Portfolio, enforceable against MIP and Portfolio
in accordance with its terms. No meeting of, or consent by, interestholders of
Portfolio is necessary to approve the issuance of the Interests (as defined
below) to Fund.
<PAGE>
(c) Authorization of Issuance of Beneficial Interest. The issuance by
Portfolio of shares of beneficial interest ("Interests") in exchange for the
Investments by Fund of its Assets has been duly authorized by all necessary
action on the part of the Board of Trustees of Portfolio.
(d) 1940 Act Registration. MIP is duly registered as an open-end
management investment company under the 1940 Act and such registration is in
full force and effect.
(e) SEC Filings; Securities Exemptions. MIP has duly filed all SEC
Filings, as defined herein, relating to Portfolio required to be filed with the
SEC pursuant to the 1940 Act. Interests in Portfolio are not required to be
registered under the 1933 Act, because such Interests are offered solely in
private placement transactions which do not involve any "public offering" within
the meaning of Section 4(2) of the 1933 Act. In addition, Interests in Portfolio
are either noticed for sale or exempt from notice requirements under applicable
securities laws in those states or jurisdictions in which Interests are offered
and sold. All SEC Filings relating to Portfolio comply in all material respects
with the requirements of the applicable Securities Laws, as defined herein, and
do not, as of the date of this Agreement, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(f) Tax Status. Based upon applicable IRS interpretations and
rulings, Portfolio is treated as a partnership for federal income tax purposes
under the Code for its current taxable year.
1.3 MassMutual. MassMutual represents and warrants to MIP that the execution
and delivery of this Agreement by MassMutual have been duly authorized by all
necessary action on the part of MassMutual and no other action or proceeding is
necessary for the execution and delivery of this Agreement by MassMutual, or the
performance by MassMutual of its obligations hereunder. This Agreement when
executed and delivered by MassMutual shall constitute a legal, valid and binding
obligation of MassMutual, enforceable against MassMutual in accordance with its
terms.
ARTICLE II
COVENANTS
2.1 Trust. Trust covenants that:
(a) Advance Review of Certain Documents. Trust will furnish MIP at
least ten (10) business days prior to the earlier of filing or first use, as the
case may be, with drafts of Fund's registration statement on Form N-lA and any
amendments thereto, and also will give at least three (3) business days' advance
notice of any prospectus or statement of additional information supplements or
amendments. In addition, Trust will furnish or will cause to be furnished to MIP
at least five (5) business days prior to the earlier of filing or first use, as
the case may be, any proposed advertising or sales literature that contains
language that describes or refers to MIP or
<PAGE>
Portfolio and that was not previously approved by MIP. Trust agrees that it will
include in all such Fund documents any disclosures that may be required by law,
and that it will incorporate in all such Fund documents any material and
reasonable comments made by MIP. MIP will not, however, in any way be liable for
any errors or omissions in such documents, whether or not it makes any objection
thereto, except to the extent such errors or omissions result from information
provided in Portfolio's 1940 Act registration statement or otherwise provided by
MIP for inclusion therein. In addition, neither Fund nor MassMutual will make
any other written or oral representations about MIP or Portfolio other than
those contained in such documents without MIP's prior written consent.
(b) SEC and Blue Sky Filings. Trust will file all forms, reports,
proxy statements and other documents (collectively, the "SEC Filings") required
to be filed with the SEC under the 1933 Act, the 1934 Act and the 1940 Act, and
the rules and regulations thereunder, (collectively, the "Securities Laws") in
connection with the registration of Fund's shares, any meetings of its
shareholders and its registration as a series of an investment company. Trust
will file such similar or other documents as may be required to be filed with
any securities commission or similar authority by the laws or regulations of any
state, territory or possession of the United States, including the District of
Columbia, in which shares of Fund are or will be noticed for sale ("State
Filings"). Fund's SEC Filings will comply in all material respects with the
requirements of the applicable Securities Laws, and, insofar as they relate to
information other than that supplied or required to be supplied by Portfolio,
will not, at the time they are filed or used to offer Fund shares, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. Fund's
State Filings will be prepared in accordance with the requirements of applicable
state and federal law and the rules and regulations thereunder.
(c) 1940 Act Registration. Trust will be duly registered as an open-
end management investment company under the 1940 Act.
(d) Tax Status. Fund will qualify for treatment as a regulated
investment company under Subchapter M of the Code for any taxable year during
which this Agreement continues in effect, unless such lack of qualification is
solely as a result of Portfolio's failure to meet the diversification
requirements of Subchapter M of the Code.
(e) Fiscal Year. Fund shall take appropriate action to adopt and
maintain the same fiscal year end as Portfolio (currently February 28).
(f) Proxy Voting. If requested to vote on matters pertaining to MIP
or Portfolio, Fund will vote such shares in accordance with applicable law.
(g) Compliance with Laws. Trust shall comply, in all material
respects, with all applicable laws, rules and regulations in connection with
conducting its operations as a registered investment company.
<PAGE>
(h) Insurance. Fund will maintain in full force and effect for so
long as this Agreement is in effect reasonable insurance coverage against any
and all liabilities that may arise as a result of Fund's business as a
registered investment company.
2.2 MIP. MIP covenants that:
(a) Signature Pages. MIP shall promptly provide all required
signature pages to Trust for inclusion in any SEC Filings of Trust, provided
Trust is in material compliance with its covenants and other obligations under
this Agreement at the time such signature pages are provided and included in the
SEC Filing. Trust and MassMutual acknowledge and agree that the provision of
such signature pages does not constitute a representation by MIP, its Trustees
or Officers, that such SEC Filing complies with the requirements of the
applicable Securities Laws, or that such SEC Filing does not contain any untrue
statement of a material fact or does not omit to the state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except with respect to information provided by MIP for inclusion in
such SEC Filing or for use by Trust in preparing such filing, which shall in any
event include any written information obtained from MIP's current registration
statement on Form N-1A.
(b) Redemption. Except as otherwise provided in this Section 2.2(b),
redemptions of Interests owned by Fund will be effected pursuant to Section
2.2(c). In the event Fund desires to withdraw its entire Investment from
Portfolio, either by submitting a redemption request or by terminating this
Agreement in accordance with Section 5.1 hereof, Portfolio, unless otherwise
agreed to by the parties, and in all cases subject to Sections 17 and 18 of the
1940 Act and the rules and regulations thereunder, will effect such redemption
"in kind" and in such a manner that the securities delivered to Fund or its
custodian for the account of Fund mirror, as closely as practicable, the
composition of Portfolio immediately prior to such redemption. Portfolio further
agrees that, to the extent legally possible, it will not take or cause to be
taken any action without Fund's prior approval that would cause the withdrawal
of Fund's Investments to be treated as a taxable event to the Fund. Portfolio
further agrees to conduct its activities in accordance with all applicable
requirements of Rule 1.731-2(e) under the Internal Revenue Code or any successor
regulation.
(c) Ordinary Course Redemptions. Portfolio will effect its
redemptions in accordance with the provisions of the 1940 Act and the rules and
regulations thereunder, including, without limitation, Section 17 thereof. All
redemption requests other than a withdrawal of Fund's entire Investment in
Portfolio under Section 2.2(b) or, at the sole discretion of MIP, a withdrawal
(or series of withdrawals over any 3 consecutive business days) of an amount
that exceeds 10% of Portfolio's net asset value will be effected in cash at the
next determined net asset value after the redemption request is received.
Portfolio will use its best efforts to settle redemptions on the business day
following the receipt of a redemption request by Fund and if such next business
day settlement is not practicable, will immediately notify Fund and MassMutual
regarding the anticipated settlement date, which shall in all events be a date
permitted under the 1940 Act.
<PAGE>
(d) SEC Filings. MIP will file all SEC Filings required to be filed
with the SEC under the Securities Laws in connection with any meetings of
Portfolio's investors and Portfolio's registration as a series of an investment
company and will provide copies of all such definitive filings to Trust.
Portfolio's SEC Filings will comply in all material respects with the
requirements of the applicable Securities Laws, and will not, at the time they
are filed or used, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(e) 1940 Act Registration. MIP will remain duly registered as an
open-end management investment company under the 1940 Act.
(f) Tax Status. Based upon applicable IRS interpretations and
rulings, Portfolio will continue to be treated as a partnership for federal
income tax purposes under the Code. Portfolio will continue to satisfy the
diversification requirements of Subchapter M as if such requirements were
applicable directly to it for so long as this Agreement continues in effect. MIP
agrees to forward to Fund prior to Fund's initial Investment a copy of its
opinion of counsel or private letter ruling relating to the tax status of
Portfolio and agrees that Fund may rely upon such opinion or ruling during the
term of this Agreement.
(g) Securities Exemptions. Interests in Portfolio have been and will
continue to be offered and sold solely in private placement transactions which
do not involve any "public offering" within the meaning of Section 4(2) of the
1933 Act or require registration or notification under any state law.
(h) Advance Notice of Certain Changes. MIP shall provide Trust with
at least one hundred twenty (120) days' advance notice, or such lesser time as
may be agreed to by the parties, of any change in Portfolio's investment
objective, and at least sixty (60) days' advance notice, or if MIP has knowledge
that one of the following changes is likely to occur more than sixty (60) days
in advance of such event, notice shall be provided as soon as reasonably
possible after MIP obtains such knowledge, of any material change in Portfolio's
investment policies or activities, any material increase in Portfolio's fees or
expenses, or any change in Portfolio's fiscal year or time for calculating net
asset value for purposes of Rule 22c-1.
(i) Compliance with Laws. MIP shall comply, in all material respects,
with all applicable laws, rules and regulations in connection with conducting
its operations as a registered investment company.
2.3 Reasonable Actions. Each party covenants that it will, subject
to the provisions of this Agreement, from time to time, as and when requested by
another party or in its own discretion, as the case may be, execute and deliver
or cause to be executed and delivered all such documents, assignments and other
instruments, take or cause to be taken such actions, and do or cause to be done
all things reasonably necessary, proper or advisable in order to conduct the
business contemplated by this Agreement and to carry out its intent and purpose.
<PAGE>
ARTICLE III
INDEMNIFICATION
3.1 Trust and MassMutual
(a) Trust and MassMutual agree, jointly and severally, to indemnify
and hold harmless MIP, Portfolio and Portfolio's investment adviser, and any
director/trustee, officer, employee or agent of MIP, Portfolio or Portfolio's
investment adviser (in this Section, each, a "Covered Person" and collectively,
"Covered Persons"), against any and all losses, claims, demands, damages,
liabilities or expenses (including, with respect to each Covered Person, the
reasonable cost of investigating and defending against any claims therefor and
any counsel fees incurred in connection therewith, except as provided in
subparagraph (b)), that:
(i) arise out of or are based upon any violation or alleged
violation of any of the Securities Laws, or any other applicable statute, rule,
regulation or common law, or are incurred in connection with or as a result of
any formal or informal administrative proceeding or investigation by a
regulatory agency, insofar as such violation or alleged violation, proceeding or
investigation arises out of or is based upon any direct or indirect omission or
commission (or alleged omission or commission) by Trust, by Fund's distributor
or by MassMutual or any of its or their trustees/directors, officers, employees
or agents, but only insofar as such omissions or commissions relate to Fund; or
(ii) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any advertising or sales
literature, prospectus, registration statement, or any other SEC Filing relating
to Fund, or any amendments or supplements to the foregoing (in this Section,
collectively "Offering Documents"), or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was not made in the Offering Documents
in reliance upon and in conformity with MIP's registration statement on Form N-
1A and other written information furnished to Fund by MIP for use therein or for
use by Fund in preparing such documents, including but not limited to any
written information contained in MIP's current registration statement on Form N-
1A;
provided, however, that in no case shall Trust or MassMutual be
liable for indemnification hereunder with respect to any claims made against any
Covered Person unless a Covered Person shall have notified Trust or MassMutual
in writing within a reasonable time after the summons, other first legal
process, notice of a federal, state or local tax deficiency, or formal
initiation of a regulatory investigation or proceeding giving information of the
nature of the claim shall have properly been served upon or provided to a
Covered Person seeking indemnification. Failure to notify Trust or MassMutual of
such claim shall not relieve Trust or MassMutual from
<PAGE>
any liability that it may have to any Covered Person otherwise than on account
of the indemnification contained in this Section.
(b) Trust and MassMutual each will be entitled to participate at
its own expense in the defense or, if it so elects, to assume the defense of any
suit brought to enforce any such liability, but if Trust and/or MassMutual
elect(s) to assume the defense, such defense shall be conducted by counsel
chosen by Trust and/or MassMutual, as applicable. In the event Trust and/or
MassMutual elect(s) to assume the defense of any such suit and retain such
counsel, each Covered Person in the suit may retain additional counsel but shall
bear the fees and expenses of such counsel unless (A) Trust and MassMutual shall
have specifically authorized the retaining of and payment of fees and expenses
of such counsel or (B) the parties to such suit include any Covered Person and
Trust and/or MassMutual, and any such Covered Person has been advised in a
written opinion by counsel reasonably acceptable to Trust and MassMutual that
one or more legal defenses may be available to it that may not be available to
Trust and/or MassMutual, in which case Trust and/or MassMutual shall not be
entitled to assume the defense of such suit notwithstanding their obligation to
bear the fees and expenses of one counsel to such persons. For purposes of the
foregoing, the parties agree that the fact that interests in Portfolio are not
registered under the 1933 Act shall be deemed not to give rise to one or more
legal defenses available to Portfolio that are not available to Trust and/or
Fund. Trust shall not be required to indemnify any Covered Person for any
settlement of any such claim effected without its written consent and MassMutual
shall not be required to indemnify any Covered Person for any settlement of any
such claim effected without its written consent, which consent, in each case,
shall not be unreasonably withheld or delayed. The indemnities set forth in
paragraph (a) will be in addition to any liability that Trust and/or MassMutual
might otherwise have to Covered Persons.
3.2 MIP.
(a) MIP agrees to indemnify and hold harmless Trust, Fund,
MassMutual, MML Investors Services, Inc. and any affiliate providing services to
Trust and/or Fund, and any trustee/director, officer, employee or agent of any
of them (in this Section, each, a "Covered Person" and collectively, "Covered
Persons"), against any and all losses, claims, demands, damages, liabilities or
expenses (including, with respect to each Covered Person, the reasonable cost of
investigating and defending against any claims therefor and any counsel fees
incurred in connection therewith, except as provided in subparagraph (b)), that:
(i) arise out of or are based upon any violation or alleged
violation of any of the Securities Laws, or any other applicable statute, rule,
regulation or common law or are incurred in connection with or as a result of
any formal or informal administrative proceeding or investigation by a
regulatory agency, insofar as such violation or alleged violation, proceeding or
investigation arises out of or is based upon any direct or indirect omission or
commission (or alleged omission or commission) by MIP, or any of its trustees,
officers, employees or agents; or
(ii) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any advertising or sales
literature, or any other SEC Filing relating to
<PAGE>
Portfolio, or any amendments to the foregoing (in this Section, collectively,
the "Offering Documents") relating to Portfolio, or arise out of or are based
upon the omission or alleged omission to state therein, a material fact required
to be stated therein, or necessary to make the statements therein in light of
the circumstances under which they were made, not misleading; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Offering Documents relating
to Trust or Fund, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances under
which they were made, not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to Fund by MIP for use therein or for use by Fund in
preparing such documents, including but not limited to any written information
contained in MIP's current registration statement on Form N-1A.
provided, however, that in no case shall MIP be liable for
indemnification hereunder with respect to any claims made against any Covered
Person unless a Covered Person shall have notified MIP in writing within a
reasonable time after the summons, other first legal process, notice of a
federal, state or local tax deficiency, or formal initiation of a regulatory
investigation or proceeding giving information of the nature of the claim shall
have properly been served upon or provided to a Covered Person seeking
indemnification. Without limiting the generality of the foregoing, Portfolio's
indemnity to Covered Person shall include all relevant liabilities of Covered
Persons under the Securities Laws, notwithstanding the fact that the Portfolio
may not produce a "prospectus" within the meaning of the 1933 Act nor register
its interests under the 1933 Act pursuant to a registration statement meeting
the requirements of the 1933 Act. Failure to notify MIP of such claim shall not
relieve MIP from any liability that it may have to any Covered Person otherwise
than on account of the indemnification contained in this Section.
(b) MIP will be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but, if MIP elects to assume the defense, such
defense shall be conducted by counsel chosen by MIP. In the event MIP elects to
assume the defense of any such suit and retain such counsel, each Covered Person
in the suit may retain additional counsel but shall bear the fees and expenses
of such counsel unless (A) MIP shall have specifically authorized the retaining
of and payment of fees and expenses of such counsel or (B) the parties to such
suit include any Covered Person and MIP, and any such Covered Person has been
advised in a written opinion by counsel reasonably acceptable to MIP that one or
more legal defenses may be available to it that may not be available to MIP, in
which case MIP shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of one counsel to
such persons. MIP shall not be required to indemnify any Covered Person for any
settlement of any such claim effected without its written consent, which consent
shall not be unreasonably withheld or delayed. The indemnities set forth in
paragraph (a) will be in addition to any liability that MIP might otherwise have
to Covered Persons.
<PAGE>
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 Access to Information. Throughout the life of this Agreement, Trust
and MIP shall afford each other reasonable access at all reasonable times to
such party's officers, employees, agents and offices and to all relevant books
and records and shall furnish each other party with all relevant financial and
other data and information as such other party may reasonably request.
4.2 Confidentiality. Each party agrees that it shall hold in strict
confidence all data and information obtained from another party (unless such
information is or becomes readily ascertainable from public or published
information or trade sources or public disclosure of such information is
required by law) and shall ensure that its officers, employees and authorized
representatives do not disclose such information to others without the prior
written consent of the party from whom it was obtained, except if disclosure is
required by the SEC, any other regulatory body, Fund's or Portfolio's respective
auditors, or in the opinion of counsel to the disclosing party such disclosure
is required by law, and then only with as much prior written notice to the other
parties as is practical under the circumstances. Each party hereto acknowledges
that the provisions of this Section 4.2 shall not prevent Trust or MIP from
filing a copy of this Agreement as an exhibit to a registration statement on
Form N-1A as it relates to Fund or Portfolio, respectively, and that such
disclosure by Trust or MIP shall not require any additional consent from the
other parties.
4.3 Obligations of Trust and MIP. MIP agrees that the obligations of
Trust under this Agreement shall be limited in all cases to the assets of Fund,
and that except to the extent liability may be imposed under relevant Securities
Laws, MIP shall not seek satisfaction of any such obligation from the officers,
agents, employees, trustees or shareholders of Trust or other classes or series
of Trust. Trust agrees that the obligations of MIP under this Agreement shall
be limited in all cases to the assets of Portfolio and that Trust shall not seek
satisfaction of any such obligation from the officers, agents, employees,
trustees or shareholders of MIP or other classes or series of MIP.
ARTICLE V
TERMINATION, AMENDMENT
5.1 Termination. This Agreement may be terminated at any time by the
mutual agreement of all parties, or by any party on ninety (90) days' advance
written notice to the other parties hereto; provided, however, that, except as
provided in Sections 2.2(b) and (c), nothing in this Agreement shall limit
Trust's right to redeem all or a portion of its Investment in Portfolio pursuant
to the 1940 Act and the rules thereunder. The provisions of Article III and
Sections 4.2 and 4.3 shall survive any termination of this Agreement.
<PAGE>
5.2 Amendment. This Agreement may be amended, modified or supplemented at
---------
any time in such manner as may be mutually agreed upon in writing by the
parties.
ARTICLE VI
GENERAL PROVISIONS
6.1 Expenses. All costs and expenses incurred in connection with this
Agreement and the conduct of business contemplated hereby shall be paid by the
party incurring such costs and expenses.
6.2 Headings. The headings and captions contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.3 Entire Agreement. Except as set forth below, this Agreement sets
forth the entire understanding between the parties concerning the subject matter
of this Agreement and incorporates or supersedes all prior negotiations and
understandings. There are no covenants, promises, agreements, conditions or
understandings, either oral or written, between the parties relating to the
subject matter of this Agreement other than those set forth herein and the
terms, conditions and descriptions set forth in MIP's Registration Statement, as
in effect from time to time.
6.4 Successors. Each and all of the provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that neither this Agreement, nor any
rights herein granted may be assigned to, transferred to or encumbered by any
party, without the prior written consent of the other parties hereto.
6.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California; provided, however, that in
the event of any conflict between the 1940 Act and the laws of California, the
1940 Act shall govern.
6.6 Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing one or more counterparts.
6.7 Third Parties. Nothing herein expressed or implied is intended or
shall be construed to confer upon or give any person, other than the parties
hereto and their successors or assigns, any rights or remedies under or by
reason of this Agreement.
6.8 Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
when delivered in
<PAGE>
person or three days after being sent by certified or registered United States
mail, return receipt requested, postage prepaid, addressed:
If to Trust or MassMutual:
[President]
MassMutual Institutional Funds
1295 State Street
Springfield, MA 01111
and
[President]
Massachusetts Mutual Life Insurance Company
Two World Trade Center
New York, NY 10048
If to MIP:
Chief Operating Officer
Master Investment Portfolio
c/o Stephens Inc.
111 Center Street
Little Rock, AR 72201
6.9 Interpretation. Any uncertainty or ambiguity existing herein shall
not be interpreted against any party, but shall be interpreted according to the
application of the rules of interpretation for arms' length agreements.
6.10 Operation of Fund. Except as otherwise provided herein, this
Agreement shall not limit the authority of Fund, Trust or MassMutual to take
such action as it may deem appropriate or advisable in connection with all
matters relating to the operation of Fund and the sale of its shares.
6.11 Relationship of Parties; No Joint Venture, Etc. It is understood and
agreed that neither Trust nor MassMutual shall hold itself out as an agent of
MIP with the authority to bind such party, nor shall MIP hold itself out as an
agent of Trust or MassMutual with the authority to bind such party.
6.12 Use of Name. Except as otherwise provided herein or required by law
(e.g., in Trust's Registration Statement on Form N-1A), neither Trust, Fund nor
MassMutual shall describe or refer to the name of MIP, Portfolio or any
derivation thereof, or any affiliate thereof, or to the
<PAGE>
relationship contemplated by this Agreement in any advertising or promotional
materials without the prior written consent of MIP, nor shall MIP describe or
refer to the name of Trust, Fund or MassMutual or any derivation thereof, or any
affiliate thereof, or to the relationship contemplated by this Agreement in any
advertising or promotional materials without the prior written consent of Trust,
Fund or MassMutual, as the case may be. In no case shall any such consents be
unreasonably withheld or delayed. In addition, the party required to give its
consent shall have at least five (5) business days prior to the earlier of
filing or first use, as the case may be, to review the proposed advertising or
promotional materials.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers, thereunto duly authorized, as of the date first
written above.
MASSMUTUAL INSTITUTIONAL FUNDS
on behalf of itself and its series, the MASSMUTUAL
INDEXED EQUITY FUND
By
-----------------------------------
Name:
Title:
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By
----------------------------------
Name:
Title:
MASTER INVESTMENT PORTFOLIO,
on behalf of its series, the S&P 500 INDEX
MASTER PORTFOLIO
By
-----------------------------------
Name:
Title:
<PAGE>
Exhibit 10
February 6, 1998
MassMutual Institutional Funds
1295 State Street
Springfield, MA 01111
Ladies and Gentlemen:
We are furnishing this opinion in connection with the proposed offer and
sale from time to time by MassMutual Institutional Funds (the "Trust") of an
indefinite number of shares of beneficial interest (the "Shares") in MassMutual
Indexed Equity Fund (the "Fund") pursuant to a post-effective amendment to the
Trust's Registration Statement on Form N-1A (File No. 033-73824) under the
Securities Act of 1933, as amended.
We are familiar with the action taken by the Trustees of the Trust to
authorize the issuance of the Shares. We have examined the Trust's records of
Trustee action, its By-Laws and its Agreement and Declaration of Trust, as
amended to date. We have examined such other documents as we deem necessary for
the purposes of this opinion.
We assume that, upon sale of the Shares, the Trust will receive the
authorized consideration therefor, which will at least equal the net asset value
of the Shares.
We assume that appropriate action has been taken to register or qualify the
sale of the Shares under any applicable state laws regulating offerings and
sales of securities.
Based upon the foregoing, we are of the opinion that the Trust is
authorized to issue an unlimited number of Shares, and that, when the Shares are
issued and sold after the post-effective amendment to the Registration Statement
has been declared effective and the authorized consideration therefor is
received by the Trust, they will be validly issued, fully paid and nonassessable
by the Trust.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust or any
series of the Trust (a "Series"). However, the Agreement and Declaration of
Trust (i) provides that all persons extending credit to,
<PAGE>
MassMutual Institutional Funds -2- February 6, 1998
contracting with or having any claim against the Trust or a Series shall look
only to the assets of the Trust or the assets of the Series and that the
shareholders shall not be liable therefor, and (ii) requires that notice of such
disclaimer of shareholder liability be given in every note, bond, contract,
instrument, writing, certificate or undertaking made or issued by the Trustees
or by any officers or officer of the Trust. The Agreement and Declaration of
Trust provides for indemnification out of the assets of a particular Series for
all loss and expense of any shareholder held personally liable for the
obligations of that Series solely by reason of his or her being or having been a
shareholder. Thus, the risk of a shareholder incurring financial loss on account
of shareholder liability is limited to circumstances in which the relevant
Series would be unable to meet its obligations.
We consent to the filing of this opinion as an exhibit to the aforesaid
post-effective amendment to the Trust's Registration Statement.
Very truly yours,
Ropes & Gray
<PAGE>
Exhibit 11(p)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Marco E. Adelfio, Richard H. Blank, Jr., R. Greg Feltus and Robert M.
Kurucza, and each of them, his true and lawful attorney-in-fact and agent (each,
an "Attorney-in-Fact") with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, (i) to execute
the Registration Statement of each MasterWorks Funds Inc., Managed Series
Investment Trust, Master Investment Portfolio and any investment company whose
fund(s) invest in a Master Portfolio of Managed Series Investment Trust or
Master Investment Portfolio (each, a "Company"), and any or all amendments
(including post-effective amendments) thereto and to file the same, with any and
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and any state securities commissions or
authorities, and (ii) to execute any and all federal or state regulatory
filings, including all applications with regulatory authorities, state charter
or organizational documents and any amendments or supplements thereto, to be
executed by, on behalf of, or for the benefit of, a Company. The undersigned
hereby grants to each Attorney-in-Fact full power and authority to do and
perform each and every act and thing contemplated above, as fully and to all
intents and purposes as he might or could do in person, and hereby ratifies and
confirms all that said Attorney-in-Fact may lawfully do or cause to be done by
virtue hereof.
/s/ R. Greg Feltus
--------------------------------
R. Greg Feltus
Dated: January 28, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Marco E. Adelfio, Richard H. Blank, Jr., R. Greg Feltus and Robert M.
Kurucza, and each of them, his true and lawful attorney-in-fact and agent (each,
an "Attorney-in-Fact") with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, (i) to execute
the Registration Statement of each of MasterWorks Funds Inc., Managed Series
Investment Trust, Master Investment Portfolio and any investment company whose
fund(s) invest in a Master Portfolio of Managed Series Investment Trust or
Master Investment Portfolio (each, a "Company"), and any or all amendments
(including post-effective amendments) thereto and to file the same, with any and
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and any state securities commissions or
authorities, and (ii) to execute any and all federal or state regulatory
filings, including all applications with regulatory authorities, state charter
or organizational documents and any amendments or supplements thereto, to be
executed by, on behalf of, or for the benefit of, a Company. The undersigned
hereby grants to each Attorney-in-Fact full power and authority to do and
perform each and every act and thing contemplated above, as fully and to all
intents and purposes as he might or could do in person, and hereby ratifies and
confirms all that said Attorney-in-Fact may lawfully do or cause to be done by
virtue hereof.
/s/ Jack S. Euphrat
---------------------------------------
Jack S. Euphrat
Dated: January 28, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Marco E. Adelfio, Richard H. Blank, Jr., R. Greg Feltus and Robert M.
Kurucza, and each of them, his true and lawful attorney-in-fact and agent (each
an "Attorney-in-Fact") with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, (i) to execute
the Registration Statement of each of MasterWorks Funds Inc., Managed Series
Investment Trust, Master Investment Portfolio and any investment company whose
fund(s) invest in a Master Portfolio of Managed Series Investment Trust or
Master Investment Portfolio (each, a "Company"), and any or all amendments
(including post-effective amendments) thereto and to file the same, with any and
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and any state securities commissions or
authorities, and (ii) to execute any and all federal or state regulatory
filings, including all applications with regulatory authorities, state charter
or organizational documents and any amendments or supplements thereto, to be
executed by, on behalf of, or for the benefit of, a Company. The undersigned
hereby grants to each Attorney-in-Fact full power and authority to do and
perform each and every act and thing contemplated above, as fully and to all
intents and purposes as he might or could do in person, and hereby ratifies and
confirms all that said Attorney-in-Fact may lawfully do or cause to be done by
virtue hereof.
/s/ Thomas S. Goho
---------------------------------------
Thomas S. Goho
Dated: January 28, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Marco E. Adelfio, Richard H. Blank, Jr., R. Greg Feltus and Robert M.
Kurucza, and each of them, his true and lawful attorney-in-fact and agent (each,
an "Attorney-in-Fact") with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, (i) to execute
the Registration Statement of each MasterWorks Funds Inc., Managed Series
Investment Trust, Master Investment Portfolio and any investment company whose
fund(s) invest in a Master Portfolio of Managed Series Investment Trust or
Master Investment Portfolio (each, a "Company"), and any or all amendments
(including post-effective amendments) thereto and to file the same, with any and
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and any state securities commissions or
authorities, and (ii) to execute any and all federal or state regulatory
filings, including all applications with regulatory authorities, state charter
or organizational documents and any amendments or supplements thereto, to be
executed by, on behalf of, or for the benefit of, a Company. The undersigned
hereby grants to each Attorney-in-Fact full power and authority to do and
perform each and every act and thing contemplated above, as fully and to all
intents and purposes as he might or could do in person, and hereby ratifies and
confirms all that said Attorney-in-Fact may lawfully do or cause to be done by
virtue hereof.
Dated: January 28, 1998 /s/ W. Rodney Hughes
--------------------------------
W. Rodney Hughes
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Marco E. Adelfio, Richard H. Blank, Jr., R. Greg Feltus and Robert M.
Kurucza, and each of them, his true and lawful attorney-in-fact and agent
(each, an "Attorney-in-Fact") with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, (i) to execute the Registration Statement of each of MasterWorks
Funds Inc., Managed Series Investment Trust, Master Investment Portfolio and any
investment company whose fund(s) invest in a Master Portfolio of Managed Series
Investment Trust or Master Investment Portfolio (each, a "Company"), and any or
all amendments (including post-effective amendments) thereto and to file the
same, with any and all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission and any state securities
commissions or authorities, and (ii) to execute any and all federal or state
regulatory filings, including all applications with regulatory authorities,
state charter or organizational documents and any amendments or supplements
thereto, to be executed by, on behalf of, or for the benefit of, a Company. The
undersigned hereby grants to each Attorney-in-Fact full power and authority to
do and perform each and every act and thing contemplated above, as fully and to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all that said Attorney-in-Fact may lawfully do or cause to be done
by virtue hereof.
/s/ J. Tucker Morse
---------------------------------------
J. Tucker Morse
Dated: January 28, 1998
<PAGE>
Exhibit 15(a)
MASSMUTUAL INSTITUTIONAL FUNDS
------------------------------
MASSMUTUAL INDEXED EQUITY FUND: CLASS A SHARES
----------------------------------------------
Form of Service Plan and Agreement
This Plan and Agreement (the "Plan") constitutes the Service Plan of the Class A
shares of the MassMutual Indexed Equity Fund (the "Fund"), a series of the
MassMutual Institutional Funds, a Massachusetts business trust (the "Trust"),
adopted pursuant to the provisions of Rule 12b-1 under the Investment Company
Act of 1940 (the "Act") and the related agreement between the Trust and
OppenheimerFunds Distributor, Inc., the principal underwriter of the Trust's
shares (the "Distributor"). During the effective term of this Plan, the Trust
may make payments to Massachusetts Mutual Life Insurance Company, the Fund's
Administrator ("MassMutual"), upon the terms and conditions hereinafter set
forth:
Section 1. The Trust will pay service fees to MassMutual for services provided
and expenses incurred by it for purposes of maintaining or providing personal
services to Class A shareholders (the "Servicing Fee"). The amount of such
payments and the purposes for which they are made shall be determined by the
Qualified Trustees (as defined below). The Servicing Fee may be spent by
MassMutual on account of personal services rendered to Class A shareholders of
the Fund and/or maintenance of Class A shareholder accounts. MassMutual's
Servicing Fee expenditures may include, but shall not be limited to,
compensation to, and expenses (including telephone and overhead expenses) of
agents or employees of MassMutual, the Fund's Distributor or Sub-Distributor,
pension consultants or participating or introducing brokers and other financial
intermediaries who assist investors in completing account forms and selecting
dividend and other account options; who aid in the processing of redemption
requests for Class A shares or the processing of dividend payments with respect
to Class A shares; who provide information periodically to Class A shareholders
showing their position in Class A shares; who prepare, print and deliver
prospectuses and shareholder reports to Class A shareholders; who oversee
compliance with federal and state laws pertaining to the sale of Class A shares;
who issue account statements to Class A shareholders; who forward communications
from the Fund to Class A shareholders; who render advice regarding the
particular shareholder account options offered by the Fund in light of
shareholder needs; who provide and maintain elective shareholder services; who
furnish shareholder sub-accounting; who provide and maintain pre-authorized
investment plans for Class A shareholders; who respond to inquiries from Class A
shareholders relating to such services; and/or who provide such similar services
as permitted under applicable statutes, rules or regulations.
Payments under this Section 1 of the Plan shall not exceed in any fiscal year
the annual rate of .25% of the Fund's average daily net assets attributable to
Class A shares. A majority of the Qualified Trustees may, at any time and from
time to time, reduce the amount of such payments, or may suspend the operation
of the Plan for such period or periods of time as they may determine.
Section 2. To the extent that any payments made by the Fund to MassMutual,
including payment of management and administrative fees, should be deemed to be
indirect financing of any activity primarily intended to result in the sale of
shares issued by the Fund within the context of Rule 12b-1 under the Act, then
such payments shall be deemed to be authorized by this Plan.
Section 3. This Plan shall not take effect until it has been approved, together
with any related agreements, by votes of the majority (or whatever greater
percentage may, from time to time, be required by Section 12(b) of the Act or
the rules and regulations thereunder) of both (i) the Trustees of the Trust, and
(ii) the Qualified Trustees of the Trust, cast in person at a meeting called for
the purpose of voting on this Plan or such agreement.
Section 4. This Plan shall continue in effect for a period of more than one
year after it takes effect only so long as such continuance is specifically
approved at least annually in the manner provided for approval of this Plan in
Section 3.
Section 5. MassMutual shall provide to the Trustees of the Trust, and the
Trustees shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
<PAGE>
Section 6. This Plan may be terminated at any time by vote of a majority of the
Qualified Trustees, or by vote of a majority of the outstanding Class A shares
of the Fund.
Section 7. All agreements with any person relating to implementation of this
Plan shall be in writing, and any agreement related to this Plan shall provide:
(a) that such agreement may be terminated at any time, without payment of
any penalty, by vote of a majority of the Qualified Trustees or by vote of
a majority of the outstanding Class A shares of the Fund, on not more than
60 days' written notice to any other party to the agreement; and
(b) that such agreement shall terminate automatically in the event of its
assignment.
Section 8. This Plan may not be amended to increase materially the amount
permitted pursuant to Section 1 hereof without the approval of a majority of the
outstanding Class A shares of the Fund, and all material amendments to this Plan
shall be approved in the manner provided for approval of this Plan in Section 3.
Section 9. As used in this Plan, (a) the term "Qualified Trustees" shall mean
those Trustees of the Trust who are not interested persons of the Trust, and
have no direct or indirect financial interest in the operation of this Plan or
any agreements related to it, and (b) the terms "interested person" and "vote of
a majority of the outstanding voting securities" shall have the respective
meanings specified in the Act and the rules and regulations thereunder, subject
to such exemptions as may be granted by the Securities and Exchange Commission.
Section 10. A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of State of The Commonwealth of Massachusetts and notice
is hereby given that this instrument is executed on behalf of the Trustees of
the Trust as Trustees and not individually, and that the obligations of or
arising out of this instrument are not binding upon any of the Trustees,
officers or shareholders individually but are binding only upon the assets and
property attributable to the Class A shares of the Fund.
Executed as of this 6th day of February, 1998.
MASSMUTUAL INSTITUTIONAL MASSACHUSETTS MUTUAL LIFE
FUNDS on behalf of MASSMUTUAL INSURANCE COMPANY
INDEXED EQUITY FUND
By: By:
------------------------------ ------------------------------
Name: Stuart H. Reese Name: John V. Murphy
Title: President Title: Executive Vice President
-2-
<PAGE>
Exhibit 15(b)
MASSMUTUAL INSTITUTIONAL FUNDS
------------------------------
MASSMUTUAL INDEXED EQUITY FUND: CLASS Y SHARES
----------------------------------------------
Form of Distribution and Service Plan and Agreement
This Plan and Agreement (the "Plan") constitutes the Distribution and Service
Plan of the Class Y shares of the MassMutual Indexed Equity Fund (the "Fund"), a
series of the MassMutual Institutional Funds, a Massachusetts business trust
(the "Trust"), adopted pursuant to the provisions of Rule 12b-1 under the
Investment Company Act of 1940 (the "Act") and the related agreement between the
Trust and OppenheimerFunds Distributor, Inc., the principal underwriter of the
Trust's shares. During the effective term of this Plan, the Trust may make
payments to Massachusetts Mutual Life Insurance Company ("MassMutual") upon the
terms and conditions hereinafter set forth:
Section 1. To the extent that any payments made by the Fund to MassMutual,
including payment of management and administrative fees, should be deemed to be
indirect financing of any activity primarily intended to result in the sale of
shares issued by the Fund within the context of Rule 12b-1 under the Act, then
such payments shall be deemed to be authorized by the Plan.
Section 2. This Plan shall not take effect until it has been approved, together
with any related agreements, by votes of the majority (or whatever greater
percentage may, from time to time, be required by Section 12(b) of the Act or
the rules and regulations thereunder) of both (i) the Trustees of the Trust, and
(ii) the Qualified Trustees of the Trust, cast in person at a meeting called for
the purpose of voting on this Plan or such agreement.
Section 3. This Plan shall continue in effect for a period of more than one
year after it takes effect only so long as such continuance is specifically
approved at least annually in the manner provided for approval of this Plan in
Section 2.
Section 4. MassMutual shall provide to the Trustees of the Trust, and the
Trustees shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
Section 5. This Plan may be terminated at any time by vote of a majority of the
Qualified Trustees, or by vote of a majority of the outstanding Class Y shares
of the Fund.
Section 6. All agreements with any person relating to implementation of this
Plan shall be in writing, and any agreement related to this Plan shall provide:
(a) that such agreement may be terminated at any time, without payment of
any penalty, by vote of a majority of the Qualified Trustees or by vote of
a majority of the outstanding Class Y shares of the Fund, on not more than
60 days' written notice to any other party to the agreement; and
(b) that such agreement shall terminate automatically in the event of its
assignment.
Section 7. This Plan may not be amended to increase materially the amount of
distribution expenses permitted pursuant to Sections 1 hereof without the
approval of a majority of the outstanding Class Y shares of the Fund, and all
material amendments to this Plan shall be approved in the manner provided for
approval of this Plan in Section 2.
<PAGE>
Section 8. As used in this Plan, (a) the term "Qualified Trustees" shall mean
those Trustees of the Trust who are not interested persons of the Trust, and
have no direct or indirect financial interest in the operation of this Plan or
any agreements related to it, and (b) the terms "interested person" and "vote of
a majority of the outstanding voting securities" shall have the respective
meanings specified in the Act and the rules and regulations thereunder, subject
to such exemptions as may be granted by the Securities and Exchange Commission.
Section 9. A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of State of The Commonwealth of Massachusetts and notice
is hereby given that this instrument is executed on behalf of the Trustees of
the Trust as Trustees and not individually, and that the obligations of or
arising out of this instrument are not binding upon any of the Trustees,
officers or shareholders individually but are binding only upon the assets and
property attributable to the Class Y shares of the Fund.
Executed as of this 6th day of February, 1998.
MASSMUTUAL INSTITUTIONAL
FUNDS, on behalf of MASSMUTUAL
INDEXED EQUITY FUND
BY:
-----------------------------
Name: Stuart H. Reese
Title: President
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
BY:
-----------------------------
Name: John V. Murphy
Title: Executive Vice President
-2-
<PAGE>
EXHIBIT 18
MASSMUTUAL INSTITUTIONAL FUNDS
------------------------------
AMENDED AND RESTATED
--------------------
RULE 18F-3 PLAN
---------------
Adopted August 4, 1997
Introduction
MassMutual Institutional Funds (the "Trust") is a Massachusetts business trust
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company. Massachusetts Mutual Life
Insurance Company (the "Adviser") is a mutual life insurance company organized
under Massachusetts law. OppenheimerFunds Distributor, Inc. (the "Distributor")
is a registered broker-dealer which serves as principal underwriter to the
Trust. The Trust consists of seven separate series and expects to add up to six
(6) additional series (the "Funds"), each of which has and will have separate
investment objectives. Prior to the adoption of this Amended and Restated Rule
18f-3 Plan, each Fund had four (4) classes of shares - Class 1, Class 2, Class 3
and Class 4. Upon the effective date of this Amended and Restated Rule 18f-3
Plan, each Fund will have three (3) classes of shares - Class A, Class Y and
Class 4 (redesignated and referred to now as Class S).
This plan is prepared, and is being adopted by the Board of Trustees, pursuant
to the requirements of Rule 18f-3 (the "Rule 18f-3 Plan").
Description of Classes
Class A. Class A shares are marketed primarily to defined contribution plans and
defined benefit plans that qualify under section 401(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), individual retirement accounts described
in Code section 408, and tax-sheltered annuity custodial accounts described in
Code section 403(b)(7), in each case as provided for in the Prospectus and/or
Statement of Additional Information contained in the Trust's Registration
Statement, as amended from time to time (the "current Prospectus and/or SAI")
Class A shares may also be marketed to other institutional investors such as
deferred compensation plans described in Code section 457, voluntary employees'
beneficiary associations described in Code section 501(c)(9), other non-
qualified deferred compensation plans or other institutional or sophisticated
investors, in each case, as provided for in the current Prospectus and/or SAI.
Class A shares may also be offered to present or former officers, directors,
trustees and employees (and their spouses, parents, children and siblings) of
the Trust, the Adviser and its affiliates and retirement plans established by
them for their employees.
Class A shares may be offered with a front-end sales charge, provided that any
such front-end sales charge is in accordance with the current Prospectus and/or
SAI, and, provided further, that any such front-end sales charge shall not
exceed 5.75%. In cases where a front-end sales charge is not imposed and Class A
shares are offered at net asset value, there may be contingent deferred sales
charges applied for redemptions occurring in the 12 month period occurring after
the first purchase of Class A Shares.
Class Y. Class Y shares are marketed primarily to non-qualified deferred
compensation plans whereby the employer sponsor enters into an administrative
services agreement with the Adviser, or an affiliate of the Adviser, with
respect to administration of the plan. Class Y shares may also be marketed to
defined contribution plans and defined benefit plans under Code section 401(a)
and tax-sheltered annuity plans under Code Section 403(b), in each case with
plan assets in excess of a determined amount and which enter into an
administrative services or other agreement with the Adviser, or an affiliate of
the Adviser. Class Y shares may also be marketed to other institutional
investors, including other registered investment Companies (or any series
thereof) advised by the Adviser or an affiliate of the Adviser, in each case as
provided for in the current Prospectus and/or SAI. Class Y shares will be
offered at net asset value without a front-end or contingent deferred sales
charge.
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Class S. Class S shares are available only to the separate accounts of the
Adviser and life insurance company affiliates of the Adviser ("Separate
Accounts"). Interests in the Separate Accounts are offered only to defined
contribution plans and defined benefit plans under Code section 401(a) and
certain other plans in accordance with the Federal securities laws and the rules
and regulations thereunder. Class S shares are offered at net asset value
without a front-end or contingent deferred sales charge. Class S shares were
formerly known as Class 4 shares.
Distribution Arrangements
Class A. It is anticipated that Class A shares will primarily be marketed both
through independent and affiliated broker/dealers with the assistance of
independent intermediaries, but Class A shares also may be sold directly by
employees of the Adviser. In addition, there may also be "direct" sales of Class
A shares by employees of the Adviser in the case of Class A shares which are
sold to participants of qualified plans who roll their plan distributions into
individual retirement accounts. In either case, such employees of the Adviser
shall be registered representatives of a broker-dealer affiliate of the Adviser.
Class Y. It is anticipated that Class Y shares will be marketed primarily
through "direct" sales efforts of employees of the Adviser. In such cases,
employees of the Adviser shall be registered representatives of a broker-dealer
affiliate of the Adviser. Class Y shares may also be marketed through
independent and affiliated broker/dealers with the assistance of independent
intermediaries.
Class S. Class S shares may be sold only to Separate Accounts. It is anticipated
that there will not be any "direct" sales of Class S shares by employees of the
Adviser and sales of Separate Accounts need not be made by registered
representatives.
Servicing Arrangements -- Fees
In General. Each Fund has adopted or will adopt with respect to Class A shares a
Service Plan and Agreement pursuant to Rule 12b-1 under the 1940 Act (a "Service
Plan") which will provide for payment of service fees to the Adviser (the
"Service Fee") for the rendering services to Class A shareholders and/or
maintenance of Class A shareholder accounts. The Adviser will not use the 12b-1
Plan Fees charged to Class A shares within a Fund to support the distribution,
marketing or shareholder services of any other class within the Fund. A
defensive Rule 12b-1 Plan has been adopted for Class A and Class Y.
Class A. The Class A Service Plan provides that the Service Fee will be paid to
the Adviser at an annual rate not to exceed .25% of the average daily net asset
value of the Class A shares.
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Class Y. Class Y shares are not subject to any service fees; although the Class
does have a defensive 12b-1 Plan. Any expenses related to sales and distribution
would be borne by the Adviser and not by the Trust.
Class S. Class S shares are not subject to Rule 12b-1 fees because there are not
expected to be any distribution or service expenses attributable to Class S due
to the nature of the investors eligible to purchase Class S shares.
Administrative Arrangements
The Adviser has entered into a separate Administrative and Shareholder Services
Agreement for each Fund pursuant to which the Adviser is compensated for
administrative and shareholder services rendered and expenses incurred by it in
the rendering of such services and for the cost of bearing some Class expenses,
such as Federal and state registration fees, printing and postage. Each
Agreement anticipates that the Adviser will provide extensive services to Class
A, modest services to Class Y and limited services to Class S. The Trust, on
behalf of each Fund, pays the Adviser a monthly fee for the services performed
at an annual rate of the average daily net assets of the applicable class of
shares of the Fund within the range specified in the current Prospectus and/or
SAI. The administrative services fee is an Identifiable Class Expense.
Also, as described above in the section entitled Servicing Arrangement --
Fees, Class A shares will bear a service fee which is used to compensate the
Adviser for rendering personal services to shareholders and for expenses
incurred by it in the rendering of such services.
Administrative Arrangements -- Fees
Each Class of each Fund shall bear an administrative fee as set forth in each
Fund's Administrative and Shareholder Services Agreement. Such fees will vary
from Class to Class and may vary from Fund. Set forth below is the range
of administrative fees paid by each Class of the existing seven funds (the
MassMutual Prime Fund, MassMutual Short-Term Bond Fund, MassMutual Core Bond
Fund, MassMutual Balanced Fund, MassMutual Value Equity Fund, MassMutual Small
Cap Value Equity Fund and MassMutual International Equity Fund).
Class A. Class A shares will bear an annual administrative service fee not to
exceed a range of between .4752% and .4875%.
Class Y. Class Y shares will bear an annual administrative service fee not to
exceed a range of between .2752% and .2875%.
Class S. Class S shares will bear an annual administrative service fee not to
exceed a range of between .0774% and .0777%.
Voting and Other Rights and Obligations
Each share of the Trust, regardless of class, will have identical voting,
dividend, liquidation and other rights, preferences, powers, restrictions,
limitations, qualifications, designations and terms and conditions, except that:
(a) each class will have a different class designation;
(b) each class offered in connection with a Rule 12b-1 Plan will bear the
expense of the payments that would be made pursuant to such Rule 12b-1
Plan;
(c) each class will also bear certain other expenses that are directly
attributable only to the class (the "Identifiable Class Expenses"
as described in more detail under "Allocation of Fund Expenses-
Identifiable Class Expenses); and
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(d) only the holders of the shares of the appropriate class involved
will be entitled to vote on matters pertaining to a Rule 12b-1 Plan
relating to such class (e.g., the adoption, amendment or termination of
a Rule 12b-1 Plan) in accordance with the requirements and procedures
set forth in Rule 12b-1;
(e) each class will have separate voting rights on any matter submitted
to shareholders in which the interest of one class differs from the
interest of any other class; and
(f) each class will have different exchange privileges described
below.
Dividends paid by a Fund with respect to each class of shares, to the extent any
dividends are paid, will be calculated in the same manner, at the same time, on
the same day and will be in the same amount, except that fee payments made under
the Rule 12b-1 Plans relating to a particular class of shares will be borne
exclusively by such class and except that any Identifiable Class Expenses may be
borne by the applicable class of shares.
Allocation of Fund Expenses
Unattributed Expenses. All expenses of the Trust that cannot be attributed
directly to any one Fund will be allocated to each Fund based on the relative
net assets of such Fund. All expenses of a Fund that can not be allocated to any
one particular class will be allocated to each class based on the relative net
asset of such class. An independent expert previously reviewed the methodology
and procedures for the proper allocation of expenses among Class 1, Class 2,
Class 3 and Class 4 shares and the expert rendered a report that demonstrated
that such methodology and procedures were adequate to ensure that such
allocations will be made in an appropriate manner, subject to the conditions and
limitations in the report. The methodology and procedures for the proper
allocation of expenses among Class A, Class Y and Class S shares will be the
same as those reviewed by the independent expert for the Class 1, Class 2, Class
3 and Class 4 shares.
Identifiable Class Expenses. Identifiable Class Expenses will be allocated to a
particular class of a Fund and are limited to:
(a) transfer agency fees attributable to a specific class of shares;
(b) printing and postage expenses related to preparing and distributing
materials such as shareholder reports, prospectuses and proxies to
current shareholders of a specific class;
(c) Blue Sky registration fees incurred by a class of shares;
(d) SEC registration fees incurred by a class of shares;
(e) shareholder and administrative service fees payable under each Fund's
respective administrative service agreement; and
(f) any other incremental expenses subsequently identified that should be
properly allocated to one class which shall be approved by the Board
and is consistent with Rule 18f-3 and any SEC interpretations thereof.
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Waivers and Reimbursements of Expenses
The Adviser may choose to reimburse or waive the Identifiable Class Expenses of
certain classes on a voluntary, temporary basis. The amount of such expenses
waived or reimbursed by the Adviser may vary from class to class. In addition,
the Adviser may waive or reimburse expenses attributable to the Trust generally
and/or expenses attributable to a Fund (with or without a waiver or
reimbursement of Identifiable Class Expenses) but only if the same proportionate
amount of such expenses are waived or reimbursed for each class. Thus, any
expenses attributable to the Trust generally that are waived or reimbursed would
be credited to each class of a Fund based on the relative net assets of the
classes. Similarly, any expenses attributable to a Fund that are waived or
reimbursed would be credited to each class of that Fund according to the
relative net assets of the classes. The Adviser's flexibilty to waive expenses
may be subject to tax considerations.
No Conversion Provision
In General. Class A, Class Y and Class S shares of the Funds do not have a
conversion feature.
Exchange Provision
Class A. Shareholders of Class A shares of each Fund will generally be entitled
to exchange those shares at net asset value for Class A shares of other Funds
that offer Class A shares. Shareholders of Class A shares continue to be
subject to the Rule 12b-1 Plan fee applicable to Class A shares after the
exchange.
Class Y. Shareholders of Class Y shares of each Fund will generally be entitled
to exchange those shares at net asset value for Class Y shares of other Funds
that offer Class Y shares.
Class S. Shareholders of Class S shares of each Fund will generally be entitled
to exchange those shares at net asset value for Class S shares of other Funds
that offer Class S shares.
Effective Date
This Amended and Restated Rule 18f-3 Plan shall become effective upon the first
issuance of Class A and Class Y shares.
Approved: Date:
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Title: Vice President and Secretary
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