<PAGE>
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MASSMUTUAL PARTICIPATION INVESTORS
Springfield, Massachusetts 01111
[LOGO APPEARS HERE]
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
AND
PROXY STATEMENT
TIME
FRIDAY, APRIL 19, 1996
AT 1:00 P.M.
PLACE
OAK ROOM
MASSACHUSETTS MUTUAL
LIFE INSURANCE COMPANY
1295 STATE STREET
SPRINGFIELD, MASSACHUSETTS 01111
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Please date, fill in and sign the enclosed form of proxy and mail it
in the enclosed return envelope which requires no postage if mailed in the
United States.
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<PAGE>
MASSMUTUAL PARTICIPATION INVESTORS
Springfield, Massachusetts
Dear Shareholder:
The 1996 Annual Meeting of Shareholders will be held in the Oak Room of
Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield,
Massachusetts 01111, at 1:00 p.m., Springfield time, on Friday, April 19, 1996.
A Notice and a Proxy Statement regarding the meeting, a proxy card for your vote
at the meeting and a postage prepaid envelope in which to return your proxy card
are enclosed.
By promptly returning the enclosed proxy card, you as a shareholder can
help management avoid the necessity and expense of sending follow-up letters to
obtain the attendance of a majority of the outstanding shares. You are earnestly
requested to sign and return the proxy card in order that the necessary quorum
may be represented at the meeting. If you find you can be present in person, you
may, if you wish, revoke your proxy then and vote your shares in person.
At the meeting, shareholders will elect three Trustees of the Trust,
approve or disapprove the selection of Coopers & Lybrand L.L.P. as auditors, and
approve or disapprove the continuance of the current Investment Advisory and
Administrative Services Contract between the Trust and its investment adviser,
Massachusetts Mutual Life Insurance Company. The Trustees of the Trust have
unanimously recommended that the shareholders vote for election of the nominated
Trustees, ratify the selection of Coopers & Lybrand L.L.P. and approve the
continuance of the Investment Advisory and Administrative Services Contract.
I look forward to your attendance at this meeting because it will provide
us with an opportunity to hold an informal discussion with you concerning the
progress of MassMutual Participation Investors.
Sincerely,
/s/ Gary E. Wendlandt
Gary E. Wendlandt
Chairman
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MASSMUTUAL PARTICIPATION INVESTORS
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF
MASSMUTUAL PARTICIPATION INVESTORS:
Please take notice that the Annual Meeting of Shareholders of MASSMUTUAL
PARTICIPATION INVESTORS (the "Trust") has been called to be held in the Oak Room
of Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield,
Massachusetts 01111, on Friday, April 19, 1996, at 1:00 p.m., Springfield time,
for the following purposes:
(1) To elect Jack A. Laughery as a Trustee for a three-year term and until
his successor is duly elected and qualified;
To re-elect Marshall D. Butler and Sumner L. Feldberg as Trustees for
three-year and two-year terms respectively, and until their successors are duly
elected and qualified;
(2) To consider and ratify or reject the action taken by the Board of
Trustees in selecting Coopers & Lybrand L.L.P. as auditors for the fiscal year
ending December 31, 1996;
(3) To consider and approve or disapprove continuance of the Trust's
current Investment Advisory and Administrative Services Contract dated
October 7, 1988; and
(4) To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
Holders of record of the shares of beneficial interest of the Trust at the
close of business on February 28, 1996, are entitled to vote at the meeting or
any adjournment thereof.
By order of the
Board of Trustees,
/s/ Stephen L. Kuhn
Stephen L. Kuhn
Vice President and Secretary
Springfield, Massachusetts
March 8, 1996
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<PAGE>
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of MASSMUTUAL PARTICIPATION INVESTORS (the
"Trust") for use at the Annual Meeting of its Shareholders, to be held in the
Oak Room of Massachusetts Mutual Life Insurance Company (the "Insurance
Company"), 1295 State Street, Springfield, Massachusetts 01111, on Friday, April
19, 1996, at 1:00 p.m., Springfield time.
Any person giving a proxy has power to revoke it by mail or in person at
any time prior to its exercise by executing a superseding proxy or by submitting
a notice of revocation to the Trust. All properly executed and unrevoked proxies
received in time for the meeting will be voted in accordance with the
instructions contained therein.
Holders of the shares of beneficial interest of the Trust ("shares"), of
record at the close of business on February 28, 1996, will be entitled to one
vote per share on all business of the meeting and any adjournments. There were
9,216,665 shares outstanding on the record date.
The mailing address of the principal executive offices of the Trust is 1295
State Street, Springfield, Massachusetts 01111. This Proxy Statement and the
accompanying letter to shareholders from the Chairman of the Board of Trustees,
Notice of Annual Meeting of Shareholders and form of proxy are being mailed on
or about March 8, 1996 to shareholders of record on the record date.
Pursuant to the Trust's By-Laws, the presence at the Annual Meeting, in
person or by proxy, of Shareholders entitled to cast a majority of the votes
shall be a quorum for the transaction of business. A plurality of the votes cast
is required to elect Trustees. Thus, the three nominees for election as Trustees
at the Annual
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<PAGE>
Meeting who receive the greatest number of votes properly cast for the election
of trustees shall be elected Trustees. Under the Trust's Declaration of Trust a
majority of the shares voted is required to ratify the selection of independent
accountants.
An affirmative "majority vote" of the Trust's shares is required to approve
the continuance of the Trust's Investment Advisory and Administrative Services
Contract. A "majority vote" means either (1) the holders of at least 67% of the
Trust's shares present in person or by proxy, if more than 50% of the Trust's
outstanding shares are present or represented by proxy, (2) or a majority of the
outstanding shares of the Trust, whichever is less.
Votes cast by proxy or in person at the Annual Meeting will be counted by
persons appointed by the Trust to act as election inspectors for the meeting.
The election inspectors will count the total number of votes cast "for" approval
of the proposals for purposes of determining whether sufficient affirmative
votes have been cast. The election inspectors will count shares represented by
proxies that withhold authority to vote for a nominee for election as a Trustee
or that reflect abstentions or "broker non-votes" (i.e., shares held by brokers
or nominees as to which (i) instructions have not been received from the
beneficial owners or the persons entitled to vote, and (ii) the broker or
nominee does not have the discretionary voting power on a particular matter) as
shares that are present and entitled to vote on the matter for purposes of
determining the presence of a quorum. As to the continuance of the Contract,
abstentions or broker non-votes have the effect of a negative vote. With respect
to the election of Trustees and the ratification of the selection of an
independent accountants, abstentions and broker non-votes have no effect on the
outcome of the proposal.
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ELECTION OF TRUSTEES
The Board of Trustees is currently comprised of eight Trustees with terms
expiring in 1996, 1997, and 1998. The terms of Messrs. Butler and Feldberg
expire this year and the Board has nominated them for three-year and two-year
terms respectively. The Board has also nominated Jack A. Laughery for a three-
year term. Thus, following the Annual Meeting of Shareholders, the Board will be
comprised of nine Trustees, having various terms expiring in 1997, 1998 and
1999. All nominees, if elected, are to serve their respective terms, and until
each of their successors is duly elected and qualified.
INFORMATION CONCERNING NOMINEES
Set forth below as to each nominee for Trustee, and for each Trustee whose
term will continue after this meeting, is his present office with the Trust, his
age, his principal occupation or employment during the past five years, the
organization by which he is employed and its principal business, and certain
other directorships held by him.
GARY E WENDLANDT*
(TERM EXPIRES 1997)
Trustee since 1988, Chairman (since 1995) and President (1988-1995) of the
Trust. Chief Investment Officer (since 1993), Executive Vice President (since
1992), Senior Vice President (1983-1992) of the Insurance Company; Director
(since 1991), Merrill Lynch Derivative Products, Inc. (swap dealer); Director,
Oppenheimer Acquisition Corporation; Supervisory Director (since 1991),
MassMutual/Carlson CBO N.V. (collateralized bond fund); Director and President
(since 1995), DLB Acquisition Corporation (holding company for investment
advisers); President and Chief Executive Officer (since 1994), Director (since
1992), Concert Capital Management, Inc. (indirect investment advisory subsidiary
of the Insurance Company); Director (since 1994), MassMutual Corporate Value
Partners Ltd. (investor in debt and equity securities advised by the Insurance
Company) and MassMutual Corporate
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Value Ltd. (parent of MassMutual Corporate Value Partners Ltd.); Chairman and
Chief Executive Officer (since 1994), MassMutual Institutional Funds (open-end
investment company advised by the Insurance Company); Chairman (since 1995),
Trustee (since 1993), Vice Chairman (1993-1995) and President (1988-1993), MML
Series Investment Fund (open-end investment company advised by the Insurance
Company); Chairman (since 1995), Trustee (since 1986) and President (1983-1995),
MassMutual Corporate Investors (closed-end investment company advised by the
Insurance Company); Director of various subsidiaries of the Insurance Company.
Age: 45.
DONALD E. BENSON
(TERM EXPIRES 1998)
Trustee since 1986. Executive Vice President and Director (since 1992),
Marquette Bancshares (bank holding company); Executive Vice President and
Director (1968-1992), Bank Shares Inc. (bank holding company); President and
Director (1986-1994), MEI Diversified Inc. (medical product manufacturer);
Partner, Benson, Pinckney, Oates Partnership (building partnership); Director
(1988-1994), IJ Holding Corporation; Director (1984-1993), Athens Bancorp, Inc.,
Trustee, MassMutual Corporate Investors (closed-end investment company advised
by the Insurance Company). Age: 65.
MARSHALL D. BUTLER
(TERM EXPIRES 1996)
NOMINEE FOR ELECTION. Trustee since 1990. Chairman and Chief Executive
Officer, AVX Corporation (manufacturer of multilayer ceramic capacitors);
Director, Kyocera Corp.; Director (since 1993) Synercom Technology, Incorporated
(computer software); Trustee, MassMutual Corporate Investors (closed-end
investment company advised by the Insurance Company). Age: 69.
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* Mr. Wendlandt is an "interested person" of the Trust (as defined in the
Investment Company Act of 1940, as amended) because of his position as an
officer of the Trust and of the Insurance Company.
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MILTON COOPER
(TERM EXPIRES 1997)
Trustee since 1990. Chairman (since 1992), President (1971-1992), Kimco
Realty Corp. (shopping center ownership and management); Vice President (1971-
1992) and Director, Getty Petroleum Corp. (petroleum marketing); Director, Blue
Ridge Real Estate; Trustee, MassMutual Corporate Investors (closed-end
investment company advised by the Insurance Company). Age: 66.
RICHARD G. DOOLEY*
(TERM EXPIRES 1998)
Trustee since 1988, Vice Chairman (since 1995) and Chairman (1988-1995) of
the Trust. Consultant (since 1993); Executive Vice President and Chief
Investment Officer (1978-1993) of the Insurance Company; Director, The Advest
Group, Inc. (financial services holding company), Hartford Steam Boiler
Inspection and Insurance Co., New England Education Loan Marketing Corporation;
Director (1993-1995), Luxonen S.A. (Swedish investment fund); Director and Vice
President, Oppenheimer Acquisition Corporation; Supervisory Director, (1991-
1995), MassMutual/Carlson CBO N.V. (collateralized bond fund); Director (since
1992) Concert Capital Management, Inc. (indirect investment advisory subsidiary
of the Insurance Company); Trustee (since 1992), Kimco Realty Corp. (shopping
center ownership and management); Director (since 1993), Jefferies Group, Inc.
(financial services holding company); Chairman (1988-1995), Vice Chairman (since
1995) and Trustee, MML Series Investment Fund (open-end investment company
advised by the Insurance Company); Vice Chairman (since 1995), Chairman (1982-
1995) and Trustee, MassMutual Corporate Investors (closed-end investment company
advised by the Insurance Company). Age: 66.
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* Mr. Dooley is an "interested person" of the Trust (as defined in the
Investment Company Act of 1940, as amended) because of his position as an
officer of the Trust.
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<PAGE>
SUMNER L. FELDBERG
(TERM EXPIRES 1996)
NOMINEE FOR ELECTION. Trustee since 1977. Chairman of the Board, Waban,
Inc. (wholesale clubs and home improvement warehouses); Chairman of the Board
(1989-1995), The TJX Companies, Inc. (off-price apparel specialty stores);
Trustee, MassMutual Corporate Investors (closed-end investment company advised
by the Insurance Company). Age: 71.
DONALD GLICKMAN
(TERM EXPIRES 1998)
Trustee since 1992. Chairman (since 1992), Donald Glickman and Company,
Inc. (investment banking); Partner (1989-1992), Peter J. Solomon Investment Co.;
Chairman and Director, CalTex Industries, Inc. (manufacturer of windows);
Director, Monro Muffler Brake, Inc.; Director (since 1993), Steerage Corp.
(navigation equipment manufacturer); Director (1991-1994), Food Barn Stores,
Inc.; Director (1992-1993) Astra Holdings, Inc. (ordnance materials
manufacturer); Trustee (since 1992), MassMutual Corporate Investors (closed-end
investment company advised by the Insurance Company). Age: 62.
MARTIN T. HART
(TERM EXPIRES 1997)
Trustee since 1991. President and Director H Corporation; Co-Manager, Lake
Catamount Joint Venture (ski resort); Chairman (1989-1991), Steamboat Ski &
Resort Corporation; Chairman (1991), Heavenly Valley Ski Corporation; Partner,
Consolidated Nursery Properties (wholesale nursery and garden center); Director:
Optical Security Group Inc. (product security), Schuler Homes, Inc. (housing),
and PNB Financial Group (bank holding company); Director (since 1992), PJVA,
Inc. and PJV, Inc. (pizza restaurants); Director (since 1993), PJNC, Inc. (pizza
restaurant); Director (since 1994), Unidata, Inc. (computers), Houston Pizza
Venture (pizza restaurant), and The Bagel
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Group (bagel restaurant); Director (1993-1995), Inco Homes (housing); Director
(1992-1994), Morris Air Corp. (airline); Director (1991-1994), Capital Bancorp;
Director (1969-1991), Hardee's Food Systems, Inc. (fast food restaurants);
Director (1989-1991), Computerland Corp. (computer equipment retailer); Director
(1984-1991), United Bank of Steamboat Springs; Director (1980-1991), W.W.
Wilmore Nurseries, Inc. (garden center); Director (1991-1992), American Banco
Corporation (collections); Director (1981-1991), Capital City Bank; Director
(1982-1992), First National Bank of Leadville; Director (1979-1993), Valley
State Bank; Director (1980-1993), Little Valley Nurseries, Inc. (wholesale
nursery); Trustee (since 1991), MassMutual Corporate Investors (closed-end
investment company advised by the Insurance Company). Age: 60.
JACK A. LAUGHERY
NOMINEE FOR ELECTION. Chairman (since 1994), The Bagel Group (bagel
restaurant); Consultant (since 1994), Heartland Foods (food service); Director
(since 1993), Corral America and Papa John's International (food service
companies); Consultant (since 1996), Papa John's Iowa (food service); Director,
Sprint Mid-Atlantic (telecommunications) and First Union National Bank; Partner
(since 1992), Papa John's V and Papa John's VA (food service); Partner (since
1994), Houston Pizza Venture (pizza restaurant); Partner, Atlantic Beach
Sheraton and Coastal Lodging (hotels); Consultant (1989-1994), Hardee's Food
Systems, Inc. (fast food restaurants); Director (1981-1995), Imasco Ltd. (food
service, banking, tobacco and drug stores). Age: 61.
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SHARE OWNERSHIP OF TRUSTEES, NOMINEES
AND OFFICERS
The following table sets forth information concerning beneficial ownership,
as of February 23, 1996, of the Trust's shares by each Trustee, and by the
Trust's nominees for Trustee and officers as a group.
<TABLE>
<CAPTION>
NAME SHARES PERCENTAGE OF
INDIVIDUAL BENEFICIALLY OUTSTANDING
OR GROUP OWNED* SHARES OWNED
---------- ------------ -------------
<S> <C> <C>
Gary E. Wendlandt 3,171 **
Donald E. Benson 4,998 **
Marshall D. Butler 4,982 **
Milton Cooper 1,450 **
Richard G. Dooley 1,901 **
Sumner L. Feldberg 507 **
Donald Glickman 1,376 **
Martin T. Hart 12,438 0.13%
Jack A. Laughery 500 **
All Trustees, Nominees
and Officers as a Group 37,284 0.41%
</TABLE>
INFORMATION CONCERNING COMMITTEES AND
MEETINGS OF THE BOARD OF TRUSTEES
The Board of Trustees of the Trust has an Audit Committee, whose present
members are Messrs. Benson and Hart, neither of whom is an "interested person"
of the Trust. The Audit Committee makes recommendations to the Board of Trustees
as to the engagement or discharge of the Trust's independent accountants,
supervises investigations into matters relating to audit functions, reviews with
the Trust's independent accountants the results of the audit engagement and
considers the audit fees.
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* This information, not being within the knowledge of the Trust, has been
furnished by each nominee, Trustee and officer. Beneficial ownership is as
defined under Section 13(d) of the Securities Exchange Act of 1934, as amended.
Fractional shares are not reported.
** Less than one-tenth of one percent is not listed.
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The Trust does not have a standing nominating or compensation committee.
During the past fiscal year, the Board of Trustees held six regular
meetings (one of which was a telephone conference call meeting), and the Audit
Committee met once. Mr. Wendlandt attended fewer than 75% of the Board meetings
held in 1995.
TRANSACTIONS WITH AND REMUNERATION OF
OFFICERS AND TRUSTEES
Pursuant the Investment Advisory and Administrative Services Contract with
the Trust, the Insurance Company pays the salaries and fees of all officers of
the Trust and of all Trustees of the Trust who are "interested persons" of the
Trust or of the Insurance Company. Thus, during the fiscal year ended December
31, 1995, the Trust did not pay any compensation to any of its officers or to
any of its Trustees who were "interested persons" of the Trust or of the
Insurance Company.
Trustees who are not "interested persons" of the Trust or of the Insurance
Company receive fees of $600 for each Trustees' meeting which they attend (other
than the organizational meeting of the Board following the Annual Meeting of
Shareholders for which no fees are paid) and annual Trustees' fees of $5,000. No
meeting fees are paid for meetings conducted by telephone conference call or by
unanimous written consent. Members of the Audit Committee receive an additional
annual fee of $600. Pursuant to a deferred compensation plan, Trustees may defer
receipt of their fees until their retirement from the Board or some other time
at their election. The aggregate direct remuneration of these Trustees paid by
the Trust during the fiscal year ended December 31, 1995 was approximately
$50,686.
RATIFICATION OR REJECTION OF
APPROVAL OF AUDITORS
The Board of Trustees of the Trust, including all of the Trustees who are
not "interested persons" of the
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Trust, have selected Coopers & Lybrand L.L.P. to act as auditors for the Trust
for the fiscal year ending December 31, 1996. Coopers & Lybrand L.L.P. are
independent public accountants and have no direct or material indirect interest
in the Trust. The selection is subject to the approval of the shareholders of
the Trust at the forthcoming Annual Meeting. The enclosed proxy card provides
space for instructions directing the proxies named therein to vote for or
against ratification of that selection.
A representative of Coopers & Lybrand L.L.P. is expected to be present at
the forthcoming Annual Meeting. He shall have the opportunity to make a
statement if he desires to do so, and it is expected that he will be available
to respond to appropriate questions which may be posed by shareholders.
APPROVAL OR DISAPPROVAL OF
CONTINUANCE OF
INVESTMENT ADVISORY AND
ADMINISTRATIVE SERVICES CONTRACT
The Trust has an Investment Advisory and Administrative Services Contract,
dated October 7, 1988 (the "Contract") with the Insurance Company which entitles
the Trust to certain investment advisory and administrative services from the
Insurance Company. Under the Contract, the aggregate fee payable to the
Insurance Company for the fiscal year ended December 31, 1995 was $822,845.
At its meeting on January 19, 1996, the Board of Trustees unanimously
approved, and voted to recommend that the shareholders approve, the continuance
of the Contract. Prior to the Annual Meeting of Shareholders on April 19, 1996,
the Trustees (including a majority of the Trustees who are not "interested
persons" of the Trust or of the Insurance Company) will meet again to review
their approval and recommendation. Subject to such further review by the Board
of Trustees, the Contract will be submitted to the Trust's shareholders for
their approval or disapproval at the forthcoming Annual Meeting.
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SUMMARY OF THE CONTRACT
Under the Contract, the Insurance Company has agreed to use its best
efforts to present to the Trust a continuing and suitable investment program
consistent with the investment objectives, policies and restrictions of the
Trust. The Insurance Company has further agreed that it will request each issuer
of securities which the Insurance Company is prepared to purchase at direct
placement, and which would be consistent with the investment policies of the
Trust, to offer such securities also to the Trust and that it will use its best
efforts to insure that such issuer accedes to such request.
The Insurance Company, at its expense, investigates and conducts relations
with the issuers of securities purchased or to be purchased directly by the
Trust and represents the Trust in any negotiations with issuers, investment
banking firms, securities brokers or dealers and other institutions or investors
relating to the Trust's investments. The Insurance Company provides
administration of the day-to-day investment operations of the Trust and provides
the Trust with all necessary office facilities and personnel for servicing the
Trust's investments, and will pay the salaries and fees of all officers of the
Trust, of all Trustees who are "interested persons" of the Trust or of the
Insurance Company, and of all personnel of the Trust or of the Insurance Company
performing services relating to research, statistical and investment activities.
In addition, the Insurance Company, subject to the supervision of the Trustees
of the Trust, will, at its expense, furnish (or make provision for) the
management and administrative services necessary for the operation of the Trust.
These services include providing facilities for maintaining the Trust's
organization, supervising relations with the Trust's custodian, transfer agent,
accountants and other persons dealing with the Trust, providing for pricing of
the Trust's portfolio securities, coordinating the preparation of shareholder
communications and conducting shareholder relations, maintaining the
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Trust's records, developing management services for the Trust and furnishing
reports, evaluations and analyses on a variety of subjects for the Trustees of
the Trust.
The Trust pays the fees and expenses of Trustees who are not "interested
persons" of the Trust or of the Insurance Company. The Trust also pays the fees
and expenses of independent advisers, independent contractors, consultants,
managers and other agents which it employs other than through the Insurance
Company. In addition, the Trust is responsible for the payment of legal fees and
expenses; the fees and disbursements of transfer agents, dividend disbursing
agents, registrars, independent accountants, and custodians and depositories of
its assets; out-of-pocket business travel expenses incurred by Trustees,
officers or employees of the Trust; taxes and governmental fees; the cost of
preparing and mailing share certificates, dividends, reports, notices and proxy
materials to shareholders; brokers' commissions or underwriting fees; and
insurance as may be required by its Board of Trustees.
Expenses incurred jointly by the Trust, the Insurance Company, MassMutual
Corporate Investors (another closed-end investment company advised by the
Insurance Company), MassMutual Corporate Value Partners Limited (an unregistered
investment fund) or any of them which are directly associated with the joint
purchase or sale of securities by any such parties are shared by such parties in
proportion to the relative amounts of such securities each is purchasing or
selling.
For its services under the Contract, the Insurance Company is paid a
quarterly fee equal to 0.225% of the value of the net assets of the Trust as of
the last business day of each fiscal quarter, an amount approximately equivalent
to 0.90% on an annual basis. A majority of the Trustees of the Trust, including
a majority of Trustees of the Trust who are not "interested persons" of the
Trust or of the Insurance Company, must approve each valuation of the Trust's
net assets used to calculate the Insurance Company's fee. At a meeting on
January 19,
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1996, the Board of Trustees of the Trust approved the valuations being made as
of the close of business on December 31, 1995, and arrived at a value for the
net assets of the Trust at that date of $95,286,143.
The Contract provides that the Insurance Company will reimburse the Trust
for any amount, not exceeding the Insurance Company's entire fee for any year,
by which the aggregate annual expenses (including the management fee, but
excluding interest, taxes, brokerage expenses and extraordinary expenses)
incurred by the Trust in such year exceed any expense limitation imposed by any
state securities law or regulations thereunder applicable to the Trust. This
requirement for reimbursement of expenses may be amended or rescinded with the
approval of a majority of the Trustees of the Trust who are not "interested
persons" of the Trust or of the Insurance Company in response to changes in the
requirements of state law, provided that no amendment or rescission shall be
given retroactive effect unless required by the change in state law.
Under the Contract, the Trust may use the name "MassMutual" or any name
derived from or similar to the name "Massachusetts Mutual" or "Massachusetts
Mutual Life Insurance Company" only for so long as the Contract or any
extension, renewal or amendment thereof remains in effect. When it is no longer
in effect, the Trust will (to the extent that it lawfully can) cease to use such
a name or any other name indicating that it is advised by or otherwise connected
with the Insurance Company.
The Contract also provides that in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations thereunder, the
Insurance Company is not liable to the Trust or any of its shareholders for any
act or omission or for any loss suffered by the Trust or its shareholders.
The Contract is terminable on 60 days' written notice by the Trust's Board
of Trustees, by vote of the majority of the Trust's outstanding voting
securities or by the Insurance Company. It will terminate automatical-
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<PAGE>
ly in the event of its assignment. Otherwise, the Contract will remain in force
for two years after the date of the Contract, and from year to year thereafter
to the extent approved at least annually (a) by vote of a majority of Trustees
of the Trust who are not "interested persons" of the Trust or of the Insurance
Company, cast in person at a meeting called for the purpose of voting on such
approval, and (b) specifically either by the Trust's Board of Trustees or by
vote of a majority of the Trust's outstanding voting securities.
Shareholder approval of the continuance of the Contract is not a
requirement of law. The Board of Trustees, however, believes it is desirable for
the Trust's shareholders to have an opportunity to give or withhold such
approval. If such approval is withheld the Contract will not automatically
terminate but the Trustees will determine what action to take in the best
interests of shareholders of the Trust. Approval of continuance of the Contract
will require the affirmative "majority vote" of the shareholders.
SUB-ADMINISTRATIVE CONTRACT
The Insurance Company has entered into a sub-administrative contract with
Dean Witter Reynolds, Inc. ("DWR"), through DWR's Intercapital Division
("Intercapital") under which Intercapital will per form, subject to the
Insurance Company's supervision, certain administrative services for the Trust.
These services include coordinating the printing and distribution of reports to
shareholders of the Trust; arranging for the distribution of proxy materials to
shareholders of the Trust, and overseeing the tabulation of proxies by the
Trust's transfer agent; evaluating the terms under which custodian, transfer
agency, dividend disbursing and registrar services will be provided to the
Trust; assisting and consulting with the Insurance Company with respect to the
payment of dividends and distributions by the Trust; making economic and market
research prepared by DWR available to the Trust and the Insurance Company; and
making reports to the Board of Trustees of the Trust. The Insurance Company,
however, remains legally obligated to
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provide such services to the Trust. Pursuant to the sub-administrative contract,
the Insurance Company pays Intercapital a quarterly fee equal to 0.0375% of the
value of the net assets of the Trust as of the last business day of each fiscal
quarter, an amount approximately equal to 0.15% on an annual basis.
ALLOCATION OF PORTFOLIO BROKERAGE
Transactions in direct placement securities are on a negotiated basis.
Brokers and dealers who execute any portfolio transaction for the Trust will be
selected primarily on the basis of obtaining the best price and execution of
each transaction. In seeking the best price and execution for securities traded
only in the over-the-counter market, the Trust will normally deal directly with
the principal market-makers unless a more favorable price may be obtained
through other brokers or dealers.
When it can be done consistently with the policy of obtaining best price
and execution, it is the Insurance Company's practice to place orders with
brokers and dealers who supply market quotations to the Trust or its agents for
portfolio evaluation purposes, or who supply research, market and statistical
information to the Trust or the Insurance Company. Except for implementing the
policy stated above, there is no intention to place portfolio transactions with
particular brokers or dealers or groups thereof. Although research, market and
statistical information from brokers and dealers can be useful to the Trust and
the Insurance Company, it is the opinion of the Insurance Company that such
information is only supplementary to the Insurance Company's own research effort
since the information must still be analyzed, weighed and reviewed by the
Insurance Company's staff. Such information may be useful to the Insurance
Company in providing services to clients other than the Trust, and not all such
information will be used by the Insurance Company in connection with the Trust.
Conversely, such information provided to the Insurance Company by brokers and
dealers through whom other clients of the Insurance Company effect securities
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transactions may be useful to the Insurance Company in providing services to the
Trust.
The Trust paid $22,875 in brokerage commissions for the fiscal year ended
December 31, 1995. Portfolio turnover for the fiscal year was 59.27%.
INVESTMENT ADVISER
The names and addresses of each director of the Insurance Company and his
or her principal occupations are set forth below.
THOMAS B. WHEELER
1295 STATE STREET
SPRINGFIELD, MASSACHUSETTS 01111
Chairman of Board of Directors and Chief Executive Officer of the Insurance
Company.
ROGER G. ACKERMAN
ONE RIVERFRONT PLAZA
CORNING, NEW YORK 14831
President and Chief Operating Officer, Corning Incorporated (manufacturer
of speciality materials, communications equipment, and consumer products).
JAMES R. BIRLE
2 GREENWICH PLAZA
SUITE 100
GREENWICH, CONNECTICUT 06830
President, Resolute Partners, Inc.
FRANK C. CARLUCCI III
1001 PENNSYLVANIA AVENUE N.W.
SUITE 220S
WASHINGTON, D.C. 20004
Chairman, The Carlyle Group.
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GENE Q. CHAO
733 S.W. VISTA AVENUE
PORTLAND, OREGON 97205-1203
Chairman and Chief Executive Officer, Computer Projections, Inc.
PATRICIA DIAZ DENNIS
175 EAST HOUSTON
SAN ANTONIO, TEXAS 78205
Senior Vice President and Assistant General Counsel, SBC Communications,
Inc.
ANTHONY DOWNS
1775 MASSACHUSETTS AVENUE N.W.
WASHINGTON, DC 20036-2188
Senior Fellow, The Brookings Institution (non-profit research center).
JAMES L. DUNLAP
2000 WESTCHESTER AVENUE
WHITE PLAINS, NEW YORK 10650
Senior Vice President, Texaco, Inc. (producer of petroleum products).
WILLIAM B. ELLIS
107 SELDEN STREET
BERLIN, CONNECTICUT 06037
Retired; former Chairman, Northeast Utilities (electric utility).
ROBERT M. FUREK
16 MUNSON ROAD
FARMINGTON, CONNECTICUT 06034-0388
President and Chief Executive Officer, Heublein, Inc. (beverage
distributor).
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CHARLES K. GIFFORD
100 FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
Chairman, President and Chief Executive Officer, The First National Bank of
Boston and Bank of Boston Corporation.
WILLIAM N. GRIGGS
75 WALL STREET, 20TH FLOOR
NEW YORK, NEW YORK 10005
Managing Director, Griggs & Santow, Inc. (business consultant).
JAMES G. HARLOW, JR.
CORPORATE TOWER
101 NORTH ROBINSON
OKLAHOMA CITY, OKLAHOMA 73102
Chairman and Chief Executive Officer, Oklahoma Gas and Electric Company
(electric utility).
GEORGE G. HARVEY
ONE ELMCROFT ROAD
STAMFORD, CONNECTICUT 06926-0700
Chairman, President and Chief Executive Officer, Pitney Bowes, Inc. (office
machines manufacturer).
BARBARA BARNES HAUPTFUHRER
1700 OLD WELSH ROAD
HUNTINGDON VALLEY, PENNSYLVANIA 19006
Director: The Vanguard Group of Investment Companies, The Great Atlantic
and Pacific Tea Company, Inc. (operator of retail food stores), Knight-Ridder
Inc. (publisher of daily newspapers and operator of cable television and
business information systems), Raytheon Company (electronics), Alco Standard
Corporation (diversified manufacturer and distributor).
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SHELDON B. LUBAR
777 EAST WISCONSIN AVENUE, SUITE 3380
MILWAUKEE, WISCONSIN 53202
Chairman, Lubar & Co. Incorporated (investment management and advisory
company).
WILLIAM B. MARX, JR.
600 MOUNTAIN AVENUE
ROOM 6A-502
MURRAY HILL, NEW JERSEY 07974
Senior Executive Vice President, Lucent Technologies Inc. (public
telecommunications systems and software).
JOHN F. MAYPOLE
P.O. BOX 1223
TOCCOA, GEORGIA 30577
Managing Partner, Peach Tree Real Estate Holding Company (real estate).
DONALD F. MCCULLOUGH
210 MADISON AVENUE
NEW YORK, NEW YORK 10016
Retired (since 1988); former Chairman, Chief Executive Officer and
President, Collins & Aikman Corp. (manufacturer of textile products).
JOHN J. PAJAK
1295 STATE STREET
SPRINGFIELD, MASSACHUSETTS 01111
Vice Chairman and Chief Administrative Officer of the Insurance Company.
BARBARA SCOTT PREISKEL
60 EAST 42ND STREET, SUITE 3125
NEW YORK, NEW YORK 10165
Attorney-at-law.
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DAVID E. SAMS, JR.
1295 STATE STREET
SPRINGFIELD, MASSACHUSETTS 01111
President, Chief Operating Officer and Director of the Insurance Company.
ALFRED M. ZEIEN
PRUDENTIAL TOWER
BOSTON, MASSACHUSETTS 02199
Chairman and Chief Executive Officer, The Gillette Company (manufacturer of
personal care products).
Executive Officers of the Trust (other than Trustees) who are officers of
the Insurance Company are listed below with their current titles.
STUART H. REESE
President (since 1995), Executive Vice President (1993-1995) of the Trust.
Senior Vice President (since 1993) of the Insurance Company; Vice President and
Managing Director, (1990-1992), Capital Markets Group of Aetna Life and Casualty
Insurance Company and Chairman and President (1990-1992), Aetna Financial
Services, Inc. (investment adviser). Age: 40.
ROBERT E. JOYAL
Senior Vice President (since 1989) of the Trust. Vice President and
Managing Director of the Insurance Company. Age: 51.
HAMLINE C. WILSON
Vice President and Chief Financial Officer (since 1988) of the Trust.
Vice President and Managing Director of the Insurance Company. Age: 58.
CLIFFORD M. NOREEN
Vice President (since 1993) of the Trust. Vice President (since 1995),
Second Vice President (1992-1994), Director/Investments (1989-1992) of the
Insurance Company. Age: 38.
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<PAGE>
STEPHEN L. KUHN
Vice President and Secretary (since 1988) of the Trust. Vice President and
Associate General Counsel (since 1992), Second Vice President and Associate
General Counsel (1988-1992) of the Insurance Company. Age: 49.
RAYMOND B. WOOLSON
Treasurer (since 1992) of the Trust. Second Vice President (since 1992),
Director/Fund Account Administration (1989-1992) of the Insurance Company.
Age: 37.
Other officers of the Trust who are officers or employees of the Insurance
Company are: Bruce E. Gaudette, John B. Joyce, Richard C. Morrison, Mary E.
Wilson, Thomas J. Finnegan, Jr., John J. McMahon, Mark A. Ahmed, Roger W.
Crandall, Andrew C. Dickey, Michael L. Hermsen, Michael L. Klofas, William E.
Lord, Gilles A. Marchand, Richard E. Spencer II, John B. Wheeler, Mark B.
Ackerman, Norman B. Flebotte, Bruno R. Umbro and Lisa M. Kusek.
In addition to acting as investment adviser and administrator to the Trust,
the Insurance Company also acts as investment adviser to MML Series Investment
Fund, an open-end management investment company consisting of MML Equity Fund,
MML Money Market Fund, MML Managed Bond Fund, and MML Blend Fund (referred to
collectively as the "MML Investment Funds"), organized for the purpose of
providing vehicles for the investment of assets of various separate investment
accounts of the Insurance Company and life insurance company subsidiaries of the
Insurance Company. At December 31, 1995 the net assets of MML Equity Fund were
$1.249 billion; the net assets of MML Money Market Fund were $108.9 million; the
net assets of MML Managed Bond Fund were $158.7 million; and the net assets of
MML Blend Fund were $1.823 billion. The Insurance Company's Investment Advisory
Agreements with each of the MML Investment Funds provide that the
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Insurance Company is to be paid a quarterly fee at the annual rate of .50% of
the first $100 million of average daily net asset value, .45% of the next $200
million, .40% of the next $200 million and .35% of any excess over $500 million.
The Insurance Company also acts as the investment adviser to MassMutual
Institutional Funds, an open-end management investment company consisting of
seven series: MassMutual Prime Fund with assets of $254.2 million as of
December 31, 1995; MassMutual Short-Term Bond Fund with assets of $123.2 million
as of December 31, 1995; MassMutual Core Bond Fund with assets of $253.9 million
as of December 31, 1995; MassMutual Balanced Fund with assets of $457.2 million
as of December 31, 1995; MassMutual Value Equity Fund with assets of $2.126
billion as of December 31, 1995; MassMutual Small Cap Value Equity Fund with
assets of $380.8 million as of December 31, 1995, and MassMutual International
Equity Fund with assets of $221.0 million as of December 31, 1995. The Insurance
Company's Investment Advisory Agreements with these seven funds provide that the
Insurance Company will be paid a monthly fee at an annual rate of the average of
the daily net assets of that fund as follows: (a) .45% for the Prime Fund, the
Short-Term Bond Fund; the Core Bond Fund, the Balanced Fund and the Value Equity
Fund; (b) .55% for the Small Cap Value Equity Fund, and (c) .85% for the
International Equity Fund.
The Insurance Company also advises MassMutual Corporate Investors
("Corporate Investors"), a closed-end, non-diversified management investment
company, having net assets of $168.6 million as of December 31, 1995. The
Insurance Company's Investment Services Contract with Corporate Investors
provides that the Insurance Company is to be paid a base rate (the "Base Fee
Rate") of 5/16 of 1% (approximately equivalent to 1.25% of the net asset value
of Corporate Investors on an annual basis), plus or minus a performance
adjustment (the "Performance Adjustment"). The Performance Adjustment is based
on Corporate Investors' performance as compared to a benchmark rate of return
(the "Target
-24-
<PAGE>
Rate") equal to 5.0 percentage points plus an unweighted, arithmetic average of
the rates of return on the Standard & Poor's Industrials Stock Price Index (the
"S&P Industrials") and the Lehman Brothers Intermediate Corporate Bond Index
(the "Intermediate Bond Index") over a rolling three-year period (the
"Measurement Period") comprising the twelve quarters ending on the last day of
each quarter (the "Valuation Date"). The Performance Adjustment is equal to 5%
of the difference between Corporate Investors' actual rate of return over the
Measurement Period and the Target Rate. If Corporate Investors' actual rate of
return exceeds the Target Rate, the Base Fee Rate is increased by an amount
equal to the Performance Adjustment; if Corporate Investors' actual rate of
return is less than the Target Rate, the Base Fee Rate is reduced by the
Performance Adjustment. The Performance Adjustment is subject to a maximum and
minimum range of 1/16 of 1% (approximately equivalent to .25% of the net asset
value of Corporate Investors on an annual basis). The advisory fee payable by
Corporate Investors is equal to the Base Fee Rate (as adjusted by the
Performance Adjustment) times the net asset value of Corporate Investors as of
the Valuation Date.
PROPOSALS BY SHAREHOLDERS
Any shareholder intending to present a proposal at the Annual Meeting to be
held in 1997 who wishes to have such proposal included in the Trust's proxy
material for that meeting should forward the written proposal to the Trust,
Attention: Secretary. Proposals must be received on or before November 20, 1996,
to be considered for inclusion in the Trust's proxy material for its 1997 Annual
Meeting.
OTHER MATTERS
The Board of Trustees knows of no business to be brought before the meeting
other than as set forth above. If, however, any other matters properly come
before the meeting, it is the intention of the persons named in the enclosed
proxy form to vote proxies on such matters in accordance with their best
judgment. Proxies will be solicited by mail and may be solicited
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<PAGE>
in person or by telephone or telegraph by officers of the Trust. The expenses
connected with the solicitation of these proxies and with any further proxies
which may be solicited by the Trust's officers in person, by telephone or by
telegraph will be borne by the Trust. In addition, the Trust may retain an
outside firm to solicit proxies, which would involve additional expenses,
payable by the Trust. If the Trust does retain such an outside firm, the
anticipated cost may be approximately $15,000. The Trust will reimburse banks,
brokers, and other persons holding the Trust's shares registered in their names
or in the names of their nominees, for their expenses incurred in sending proxy
material to and obtaining proxies from the beneficial owners of such shares.
If any shareholders desire additional information about the matters
proposed for action, the management will be glad to hear from them and to
provide further information.
ANNUAL REPORT
The Annual Report of the Trust for its fiscal year ended December 31, 1995,
including financial statements, a schedule of the Trust's investments as of such
date and other data, has been mailed to all shareholders of record on February
28, 1996. The financial statements included in such Annual Report are
incorporated herein by reference.
By order of the
Board of Trustees,
/s/ Stephen L. Kuhn
Stephen L. Kuhn
Vice President and Secretary
1295 State Street
Springfield, Massachusetts 01111
March 8, 1996
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<PAGE>
G2421 (396)
<PAGE>
MASSMUTUAL PARTICIPATION INVESTORS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
P R O X Y
- ---------
The undersigned hereby appoints Stephen L. Kuhn and Hamline C. Wilson,
and each of them, attorneys and proxies of the undersigned, with power of
substitution to vote all shares of MassMutual Participation Investors (the
"Trust") which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Trust to be held in the Oak Room of Massachusetts Mutual
Life Insurance Company, 1295 State Street, Springfield, Massachusetts 01111, on
Friday, April 19, 1996, at 1:00 p.m. Springfield time, and any adjournment
thereof (the "Annual Meeting").
THIS PROXY WILL BE VOTED ON ITEMS (1), (2) AND (3) IN ACCORDANCE WITH
THE INSTRUCTIONS GIVEN ON THIS CARD, AND IN THE ABSENCE OF INSTRUCTIONS THE
UNDERSIGNED HEREBY AUTHORIZES THE AFORESAID PROXY OR PROXIES TO VOTE FOR ITEMS
(1), (2) AND (3).
-----------
SEE REVERSE
SIDE
-----------
PLEASE SIGN ON REVERSE SIDE
<PAGE>
[X] Please mark votes [LOGO OF SFSI APPEARS HERE]
as in this example
1. Election of Trustees
Nominees: Marshall D. Butler, Sumner L. Feldberg and Jack A. Laughery for the
terms set forth in the proxy statement.
FOR WITHHELD
[_] [_] ----------------------------------------------------------
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. Ratification of the selection of [_] [_] [_]
Coopers & Lybrand LLP as auditors for the
fiscal year ending December 31, 1996.
3. Approval of continuance of the Trust's [_] [_] [_]
Investment Advisory and Administration Services
Contract with Massachusetts Mutual Life
Insurance Company, dated October 7, 1988.
4. In their discretion, the proxies are
authorized to vote on any other business
that may properly come before the Annual
Meeting.
MARK HERE FOR MARK HERE IF
ADDRESS CHANGE AND [_] YOU PLAN TO ATTEND [_]
NOTE AT LEFT. THE MEETING.
Please sign exactly as your name or names appear. When signing as joint tenant,
all parties to the joint tenancy should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as
such. Please mail the completed and signed proxy to SFSI, P.O. Box 173673,
Denver, CO 80217-3673.
Signature: _____________________________________________ Date:__________________
Signature: _____________________________________________ Date:__________________
