EXHIBIT
N
MASSMUTUAL
INSTITUTIONAL FUNDS
FORM OF
AMENDED
RULE 18f-3
PLAN
Adopted February
14, 2000
Introduction
MassMutual
Institutional Funds (the “Trust”) is a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended (the
“1940 Act”), as an open-end management investment company.
Massachusetts Mutual Life Insurance Company (the “Adviser”) is a
mutual life insurance company organized under Massachusetts law. MML
Distributors, LLC (the “Distributor”) is a registered
broker-dealer which serves as principal underwriter to the Trust. The Trust
consists of twenty-two separate, authorized series and may add additional
series from time to time in the future (the “Funds”), each of
which has and will have separate investment objectives. Prior to the
adoption of this Second Amended and Restated Rule 18f-3 Plan, each Fund had
four (4) classes of shares—Class A, Class, L, Class Y and Class S. Upon
the Effective Date of this Second Amended and Restated Rule 18f-3 Plan, each
Fund will continue to have four (4) classes of shares—Class S, Class Y,
Class L and Class A.
This plan is
prepared, and is being adopted by the Board of Trustees, pursuant to the
requirements of Rule 18f-3 under the 1940 Act (the “Rule 18f-3
Plan”).
Description of
Classes
Class
S. Class S shares are available to separate
investment accounts, including separate investment accounts of the Adviser
and life insurance company affiliates of the Adviser (“Separate
Accounts”). Interests in the Separate Accounts are generally offered
only to defined contribution plans and defined benefit plans under Section
401(a) of the Internal Revenue Code of 1986, as amended (the
“Code”) and certain other plans in accordance with the Federal
securities laws and the rules and regulations thereunder. In addition, Class
S shares may also be purchased by defined contribution and defined benefit
plans under Code Section 401(a), and by other retirement plans, which in
either case have plan assets in excess of $100,000,000, as well as other
institutional investors with assets generally in excess of $100,000,000, 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 S shares are
offered at net asset value without a front-end or contingent deferred sales
charge.
Class
Y. Class Y shares are marketed primarily to
nonqualified 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), tax-sheltered annuity plans under Code Section
403(b) and other retirement plans, in each case with plan assets in excess
of a determined amount as provided for in the current Prospectus and/or SAI,
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 the Adviser and Separate
Accounts, and 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 are
offered at net asset value without a front-end or contingent deferred sales
charge.
Class
L. Class L Shares are marketed primarily to
defined contribution and defined benefit plans that qualify under Code
Section 401(a), tax sheltered annuity plans, and other retirement plans, in
each case with
plan assets in excess of a determined amount as provided for in the current
Prospectus and/or SAI, and other institutional holders with plan assets in
excess of a determined amount as provided for in the current Prospectus
and/or SAI, that in each case generally use the services of an intermediary
performing third party administration, advisory and other shareholder
services. Class L shares may also be marketed to Separate Accounts, as
provided for in the current Prospectus and/or SAI. Class L shares may also
be marketed to nonqualified 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,
and where the intermediary may provide additional administration, advisory
and shareholder services. Class L shares are offered at net asset value
without a front-end or contingent deferred sales charge.
Class
A. Class A shares are marketed primarily to
defined contribution plans and defined benefit plans that under Code Section
401(a), 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 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 L shares may also be sold to
Separate Accounts, 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.
Distribution and
Servicing Arrangements
Class
S. Class S shares may be sold to Separate
Accounts and to certain large benefit and retirement plans and other
institutional investors as described above under “Description of
Classes”. Where Class S shares are sold “direct” by employees
of the Adviser to such benefit plans, retirement plans and institutional
investors, employees of the Adviser shall be registered representatives of a
broker-dealer affiliate of the Adviser. Sales of interests in the Separate
Accounts need not be made by registered representatives.
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. There will not be any direct
sales by employees of the Adviser when Class Y shares are sold to Separate
Accounts of the Adviser, and sales of interests in the Separate Accounts
need not be made by registered representatives.
Class
L. It is anticipated that Class L shares will be
marketed primarily through independent and/or affiliated intermediaries
acting as third party administrators, investment advisers and/or shareholder
servicing agents. In such cases, these intermediaries shall be registered
representatives of a broker. In addition, there may also be
“direct” sales of Class L shares by employees of the Adviser, in
which case such employees of the Adviser shall be registered representatives
of a broker-dealer affiliate of the Adviser. There will not be any direct
sales by employees of the Adviser when Class L shares are sold to Separate
Accounts of the Adviser, and sales of interests in the Separate Accounts
need not be made by registered representatives.
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. There will not
be any direct sales by employees of the Adviser when Class A shares are sold
to Separate Accounts of the Adviser, and sales of interests in the Separate
Accounts need not be made by registered representatives.
Distribution and
Servicing Arrangements — Fees
In
General. Each Fund has adopted or will adopt with
respect to Class A shares a Distribution and Service Plan and Agreement
pursuant to Rule 12b-1 under the 1940 Act (a “Plan”) which will
provide for (i) payment of service fees to the Adviser (the “Class A
Service Fee”) for rendering personal services to Class A shareholders
and/or maintenance of Class A shareholder accounts and (ii) payment of
distribution fees to the Distributor for the distribution of Class A shares
(the “Class A Distribution Fee”). Neither the Adviser nor the
Distributor will use the Rule 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 L and Class Y shares of each Fund. Each Fund has also
approved or will approve with respect to Class L shares a Class L
Shareholder Service Agreement which will provide for payment of shareholder
service fees to the Adviser (the “Class L Service Fee”) for
rendering or causing others to render personal services to Class L
Shareholders and/or for maintaining Class L shareholder
accounts.
Class
A. The Class A Distribution and Service Plan
provides that the Class A Service Fee and the Class A Distribution Fee will
be paid to the Adviser and the Distributor, respectively, at an annual rate
not to exceed .25% in the aggregate for both fees of the average daily net
asset value of the Class A shares.
Class
L. The Class L Shareholder Service Agreement
provides that the Class L Service Fee in effect from time to time will be
paid to the Adviser (currently at an annual rate not to exceed .15% of the
average daily net asset value of the Class L shares). The Class also has a
defensive 12b-1 plan. Any expenses related to sales and distribution would
be borne by the Adviser and not by the Trust.
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 and
Shareholder Servicing 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.
It is anticipated that the Adviser will provide extensive services to Class
A shareholders, specialized and targeted third party administration,
advisory and/or other services to Class L shareholders, modest services to
Class Y shareholders and limited services to Class S shareholders. 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 “Distribution and Servicing
Arrangements — Fees”, Class A and Class L 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
and Shareholder Servicing 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 from Fund to Fund. Set forth below is the range of
administrative fees payable by each class of the existing Funds on the
Effective Date of this Rule 18f-3 Plan: MassMutual Prime Fund; MassMutual
Short-Term Bond Fund; MassMutual Core Bond Fund; MassMutual Balanced Fund;
MassMutual Core Equity Fund; MassMutual Small Cap Value Equity Fund;
MassMutual International Equity Fund; MassMutual Indexed Equity Fund;
MassMutual Diversified Bond Fund; MassMutual Growth Equity Fund; MassMutual
Mid Cap Growth Equity Fund; MassMutual Small Cap Growth Equity Fund;
MassMutual Aggressive Growth Fund; MassMutual Large Cap Value Fund;
MassMutual Emerging Growth Fund; MassMutual Focused Value Fund; MassMutual
Mid Cap Growth Equity II Fund; and MassMutual OTC 100 Fund.
The MassMutual
Balanced Fund is identified separately. That Fund is an asset allocation
Fund comprised of three separate portfolios. That arrangement necessitates
that additional administrative services be provided.
The MassMutual
Indexed Equity Fund and the MassMutual OTC 100 Fund are identified
separately since each is an index fund.
The MassMutual Small
Cap Growth Equity Fund is identified separately. The Manager has appointed
two sub-advisers for that Fund, each of which will manage 50% of the
Fund’s portfolio. This arrangement will necessitate that additional
administrative services be provided.
Class
A. Class A shares will bear an annual
administrative service fee not to exceed a range of between .2323% and
.3345%. The annual administrative service fee for the MassMutual Balanced
Fund is .3952%. The annual administrative service fee for the
“index” funds is between .4845% and .6244%. The annual
administrative service fee for the MassMutual Small Cap Growth Equity Fund
is .4075%.
Class
L. Class L shares will bear an annual
administrative service fee not to exceed a range of between .2323% and
.3345%. The annual administrative service fee for the MassMutual Balanced
Fund is .3952%. The annual administrative service fee for the
“index” funds is between .4845% and .6244%. The annual
administrative service fee for the MassMutual Small Cap Growth Equity Fund
is .4075%.
Class
Y. Class Y shares will bear an annual
administrative service fee not to exceed a range of between .1432% and
.1845%. The annual administrative service fee for the MassMutual Balanced
Fund is .2452%. The annual administrative service fee for the
“index” funds is between .3345% and .4744%. The annual
administrative service fee for the MassMutual Small Cap Growth Equity Fund
is .2575%.
Class
S. Class S shares will bear an annual
administrative service fee not to exceed a range of between .0675% and
.1232%. The annual administrative service fee for the MassMutual Balanced
Fund is .0852%. The annual administrative service fee for the
“index” funds is between .3045% and .3744%. The annual
administrative service fee for the MassMutual Small Cap Growth Equity Fund
is .1175%.
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:
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(a) each
class will have a different class designation;
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(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;
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(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”);
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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;
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(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
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(f) each
class will have different exchange privileges described below.
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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 cannot
be allocated to any one particular class will be allocated to each class
based on the relative net assets of such class. An independent expert
previously reviewed the methodology and procedures for the proper allocation
of expenses among the former 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 L, 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:
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(a)
transfer agency fees attributable to a specific class of
shares;
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(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;
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(c) Blue
Sky registration fees incurred by a class of shares;
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(d) SEC
registration fees incurred by a class of shares;
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(e)
shareholder and administrative service fees payable under each
Fund’s respective administrative service agreement or shareholder
service agreement, as applicable; and
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(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 flexibility to waive expenses may be subject to tax
considerations.
No Conversion
Provision
In
General. Class A, Class L, Class Y and Class S
shares of the Funds do not have a conversion feature.
Exchange
Provisions
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
L. Shareholders of Class L shares of each Fund
will generally be entitled to exchange those shares at net asset value for
Class L shares of other Funds that offer Class L shares.
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 on May 1, 2000.
