UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
MassMutual Corporate Investors
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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Notes:
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MassMutual Corporate Investors
Springfield, Massachusetts 01111
[LOGO OF MASS MUTUAL]
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
AND
PROXY STATEMENT
TIME
Friday, April 23, 1999
at 2:00 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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MassMutual Corporate Investors
Springfield, Massachusetts
Dear Shareholder:
The 1999 Annual Meeting of Shareholders will be held in the Oak Room of
Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield,
Massachusetts 01111, at 2:00 p.m., Springfield time, on Friday, April 23, 1999.
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 can help the Trust avoid
the 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, approve or
disapprove the selection of PricewaterhouseCoopers LLP as auditors and approve
or disapprove the continuance of the Investment Services Contract dated July 1,
1988 with Massachusetts Mutual Life Insurance Company. The Trustees recommend
that shareholders elect the nominated Trustees, ratify the selection of
PricewaterhouseCoopers LLP, and approve the continuance of the Investment
Services Contract.
I look forward to your attendance at this meeting because it will provide us
with an opportunity to inform you about the progress of the Trust.
Sincerely,
/s/ Richard G. Dooley
Richard G. Dooley
Chairman
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MassMutual Corporate Investors
Notice of Annual Meeting of Shareholders
To the Shareholders of
MassMutual Corporate Investors:
Please take notice that the Annual Meeting of Shareholders of MASSMUTUAL
CORPORATE 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 23 1999, at 2:00 p.m., Springfield time,
for the following purposes:
(1) To re-elect Marshall D. Butler as a Trustee for a one-year term and to
re-elect Jack A. Laughery and Corine T. Norgaard as Trustees for three-year
terms and until their successors are duly elected and qualified;
(2) To ratify or reject the action taken by the Board of Trustees in
selecting PricewaterhouseCoopers LLP as auditors for the fiscal year ending
December 31, 1999;
(3) To approve or disapprove continuance of the Trust's current Investment
Services Contract with Massachusetts Mutual Life Insurance Company, dated July
1, 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 the Trust at the close of business on
February 23, 1999, 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 3, 1999
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PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of MASSMUTUAL CORPORATE 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 23, 1999, at
2:00 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 common shares of the Trust ("shares") of record at the close of
business on February 23, 1999 will be entitled to one vote per share on all
business of the meeting and any adjournments. There were 8,587,495 shares
outstanding on the record date. To the best knowledge of the Trust, the only
beneficial owner of more than 5% of the outstanding shares of the Trust is the
Insurance Company. The Insurance Company may be deemed a beneficial owner of
more than 5% of the outstanding shares of the Trust by reason of its owning a
$20,000,000 Senior Fixed Rate Convertible Note due November 15, 2000 (the
"Note") issued by the Trust. The Insurance Company, at its option, can convert
the principal amount of the Note into shares. The dollar amount of principal
would be converted into an equivalent dollar amount of shares based upon the
average price of the shares for ten business days prior to the notice of
conversion.
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 Trust, Notice of
Annual Meeting of Shareholders and proxy card are being mailed on or about March
3, 1999, to shareholders of record on the record date.
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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 votes cast is
required to elect Trustees. Thus, the three nominees for re-election as Trustees
at the Annual 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
continuance of the Trust's Investment Services Contract with the Insurance
Company, dated July 1, 1988 (the "Contract"). An affirmative "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, or (2) 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 exercise 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 accountant, abstentions and broker non-votes have no effect on the
outcome of the proposal so long as a quorum is present.
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(1) ELECTION OF TRUSTEES
The Board of Trustees is currently comprised of eight Trustees with terms
expiring in 1999, 2000 and 2001. The terms of Marshall D. Butler, Jack A.
Laughery and Corine T. Norgaard expire this year and the Board has nominated
them for re-election. Mr. Laughery and Ms. Norgaard have been nominated for
three-year terms and Mr. Butler has been nominated for a one-year term.
Following the Annual Meeting of Shareholders, the Board will be comprised of
eight Trustees, having various terms expiring in 2000, 2001 and 2002. 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 or her present office with the
Trust, age, principal occupation or employment during the past five years, the
organization by which he or she is employed and its principal business, and
certain other directorships held by them.
RICHARD G. DOOLEY(*)
(Term expires 2001)
Trustee (since 1988) and Chairman of the Trust. Consultant (since 1993) and
former Chief Investment Officer of the Insurance Company; Director (since 1996),
Investment Technology Group, Inc.; Director, The Advest Group, Inc. (financial
services holding company), HSB Group, Inc. (formerly known as Hartford Steam
Boiler Inspection and Insurance Co.), Nellie Mae; Trustee (since 1992), Kimco
Realty Corp. (shopping center ownership and management); Director, Jefferies
Group, Inc. (financial services holding company); Chairman (since 1999, and
1988-1995), Vice Chairman (1995-1999) and Trustee, MML Series Investment Fund
(open-end investment company advised by the Insurance Company); Vice Chairman
(1995-1999), and Trustee (since 1988), MassMutual Participation Investors
(closed-end investment company advised by the Insurance Company). Age: 69.
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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 and a consultant of the Insurance Company.
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DONALD E. BENSON
(Term expires 2001)
Trustee since 1986. Executive Vice President and Director (since 1992),
Marquette Bancshares (bank holding company); President and Director (1986-1994),
MEI Diversified Inc. (medical product manufacturer); Partner (since 1996),
Benson Family Limited Partnership No. 1 and Benson Family Limited Partnership
No. 2 (investment partnerships); Partner, Benson, Pinckney, Oates Partnership
(building partnership); Director (since 1997), National Mercantile Bancorp (bank
holding company) and Mercantile National Bank; Director, Mesaba Holdings, Inc.
(commuter airline); Director, Delta Beverage Group Inc. (soft drink bottler and
distributor); Trustee, MassMutual Participation Investors (closed-end investment
company advised by the Insurance Company). Age: 68.
MARSHALL D. BUTLER
(Term expires 1999)
Nominee for re-election. Trustee since 1990. Chairman (since 1994), Nitzanim
(electronic components); Director (since 1993), Chairman and Chief Executive
Officer (1973-1993), AVX Corporation (manufacturer of electronic components);
Director, Kyocera Corp. and ESC Medical; Director (since 1993), Synercom
Technology, Incorporated (computer software); Chairman (since 1994), Alpha
Technologies Group, Inc. (electronic components); Partner (since 1995), First
Israel Mezzanine Investors Ltd. (general partner and manager of The Israel
Mezzanine Fund, L.P.); Trustee (since 1990), MassMutual Participation Investors
(closed-end investment company advised by the Insurance Company). Age: 72.
MILTON COOPER
(Term expires 2000)
Trustee since 1990. Chairman (since 1992), Kimco Realty Corp. (shopping
center ownership and management); Director, Getty Petroleum Corp. (petroleum
marketing); Director, Blue Ridge Real Estate; Trustee (since 1990), MassMutual
Participation Investors (closed-end investment company advised by the Insurance
Company). Age: 69.
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DONALD GLICKMAN
(Term Expires 2001)
Trustee since 1992. Chairman (since 1992), Donald Glickman and Company,
Inc. (investment banking); Partner (1989-1992), Peter J. Solomon Investment Co.;
Director, CalTex Industries, Inc. (manufacturer of windows) and Monro Muffler
Brake, Inc.; Director (1993-1996), Steerage Corp., Inc. (navigation equipment
manufacturer); Director (1991-1994), Food Barn Stores, Inc.; Director (1992-
1993), Astra Holdings, Inc. (ordnance materials manufacturer); Trustee (since
1992), MassMutual Participation Investors (closed-end investment company advised
by the Insurance Company). Age: 65.
MARTIN T. HART
(Term expires 2000)
Trustee since 1991. President and Director, H Corporation; Co-Manager (1983-
1996), Lake Catamount Joint Venture (ski resort); 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 1997), T Netiks (communications);
Director (since 1996), PJ America (pizza restaurant); Director, PJNC, Inc.
(pizza restaurant); Director (since 1994), Ardent Software, Inc. (computers);
Manager (since 1994), Houston Pizza Venture (pizza restaurant); Director (1994-
1996), The Bagel Group (bagel restaurant); Director (1992-1996), PJVA, Inc. and
PJV, Inc. (pizza restaurants); Director (1993-1995), Inco Homes, Inc. (housing);
Director (1992-1994), Morris Air Corp. (airline); Director (1991-1994), Capital
Bancorp; Trustee (since 1991), MassMutual Participation Investors (closed-end
investment company advised by the Insurance Company). Age: 63.
JACK A. LAUGHERY
(Term expires 1999)
Nominee for re-election. Trustee since 1996. Chairman (since 1997), Partner
(since 1996), Papa John's New England (food service); President (since 1996),
Laughery Investments; Consultant (since 1996), Papa John's Iowa (food service);
Chairman (1994-1996), The Bagel Group (bagel restaurant); Consultant (1994-
1996), Heartland Foods (food service); Director
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(since 1997), Maynard Capital Partners (investments); Director, Papa John's
International (food service companies); Director, First Union National Bank;
Manager (since 1994), Houston Pizza Venture LLC (pizza restaurant); Partner,
Atlantic Beach Sheraton and Coastal Lodging (hotels); Partner (1992-1996), Papa
John's V and Papa John's VA (food service); Partner (1993-1996), Papa John's
North Carolina (food service); Consultant (1989-1994), Hardee's Food Systems,
Inc. (fast food restaurants); Director (1990-1997), Sprint Mid-Atlantic
(telecommunications); Director (1993-1996), Corral America (food service);
Director (1981-1995), Imasco Ltd. (food service, banking, tobacco and drug
stores); Trustee (since 1996), MassMutual Participation Investors (closed-end
investment company advised by the Insurance Company). Age: 64.
CORINE T. NORGAARD
(Term Expires 1999)
Nominee for re-election. Trustee since 1997. Dean (since 1996), Barney
School of Business and Public Administration, University of Hartford; Professor
of Accounting and Dean (1993-1996), School of Management, State University of
New York at Binghamton; Director, The Advest Group, Inc. (financial services
holding company); Trustee, Aetna Series Fund (investment company) and MassMutual
Participation Investors. Age: 61.
Share Ownership of Trustees, Nominees and Executive Officers
The following table sets forth information concerning beneficial
ownership, as of February 10, 1999, of the Trust's shares by each Trustee and
nominee for Trustee, and by the Trust's Trustees, nominees for Trustee and
executive officers as a group.
8
Name Shares Percentage of
Individual Beneficially Outstanding
or Group Owned(*) Shares Owned
Donald E. Benson 2,500 (**)
Marshall D. Butler 1,000 (**)
Milton Cooper 1,000 (**)
Richard G. Dooley 8,400 (**)
Donald Glickman 2,800 (**)
Martin T. Hart 9,600 0.11%
Jack A. Laughery 1,000 (**)
Corine T. Norgaard 400 (**)
All Trustees, Nominees
and Executive Officers
as a Group 37,063 0.43%
Information Concerning Committees and
Meetings of the Board of Trustees
The Board 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 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 Trust also has a Joint Transactions Committee,
made up of the disinterested Trustees, which reviews certain investment
transactions. The Trust does not have a standing nominating or compensation
committee.
During the past fiscal year, the Board of Trustees held five regular
meetings (one of which was a telephone conference call meeting) and the Audit
Committee met once. The Joint Transactions Committee met once in person and
conducted numerous consent meetings during the year. All Trustees attended at
least 80% of the aggregate number of meetings of the Board of Trustees and
Committees of the Board.
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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 on-tenth of one percent is not listed.
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Transactions with and Remuneration of
Officers and Trustees
Pursuant to the Contract, the Insurance Company pays the compensation and
expenses of the Trust's officers and employees and of all Trustees of the Trust
who are officers or employees of the Insurance Company. Thus, during its fiscal
year ended December 31, 1998, the Trust did not pay any compensation to any of
its officers or employees or to any of its Trustees who also are officers or
employees of the Insurance Company.
Trustees who are not officers or employees of the Insurance Company receive
fees of $1,500 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 $12,000. No meeting
fees are paid for meetings conducted by telephone conference call or by 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 and reimbursement
of their travel expenses paid by the Trust during the fiscal year ended December
31, 1998 was approximately $127,371.
The following table discloses the compensation paid to the Trust's non-
interested Trustees for the fiscal year ended December 31, 1998. All of the non-
interested Trustees also serve as Trustees of one other closed-end investment
company managed by the Insurance Company.
Total
Aggregate Compensation
Name of Compensation from Fund
Trustee from the Trust Complex
------- -------------- -------
Donald E. Benson $17,100 $28,700
Marshall D. Butler 16,500 27,500
Milton Cooper 18,000 30,000
Donald Glickman 18,000 30,000
Martin T. Hart 18,600 31,200
Jack A. Laughery 18,000 30,000
Corine T. Norgaard 12,000 20,000
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(2) RATIFICATION OR REJECTION OF
APPROVAL OF AUDITORS
The Board of Trustees of the Trust, including a majority of the Trustees who
are not "interested persons" (as defined in the Investment Company Act of 1940,
as amended) of the Trust, have selected PricewaterhouseCoopers LLP to act as
auditors for the Trust for the fiscal year ending December 31, 1999.
PricewaterhouseCoopers LLP has assured the Trust that they 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 PricewaterhouseCoopers LLP is expected to be present at
the forthcoming Annual Meeting. This representative shall have the opportunity
to make a statement if he or she desires to do so, and it is expected that such
representative will be available to respond to appropriate questions which may
be posed by shareholders.
(3) APPROVAL OR DISAPPROVAL
OF CONTINUANCE OF THE
INVESTMENT SERVICES CONTRACT
The Trust has an Investment Services Contract, dated July 1, 1988 (the
"Contract") with the Insurance Company which entitles the Trust to certain
investment services from the Insurance Company. Under the Contract, the Trust
paid the Insurance Company an aggregate fee of $2,883,052 for the fiscal year
ended December 31, 1998. No changes are being made in the Contract, which was
last approved by shareholders at the Trust's 1998 Annual Meeting of Shareholders
held on April 24, 1998.
At a meeting of the Board of Trustees of the Trust held on January 22, 1999,
the Board of Trustees approved, and voted to recommend that shareholders
approve, the continuance of the Contract. Among other things, the Board
considered the nature of the services provided to the Trust by the Insurance
Company including the nature of the private placement market
11
compared to public markets. The Insurance Company is required to provide the
Trust with a continuing investment program consistent with its objectives which
include investments in a wide variety of private placement securities with
equity features attached, short-term investments and publicly-traded securities.
The Trustees concluded that the Insurance Company has developed a sizeable,
experienced and competent staff of investment professionals (including analysts,
traders, and other support personnel) to support investment activities for a
wide variety of investments. The Trustees also considered the expenses of the
Trust assumed by the Insurance Company under the Contract; the actual fees paid
to the Insurance Company by the Trust for the services provided and expenses
assumed; a comparison of the Trust's fee schedule to fees charged by other
investment advisers whose investment activities include private placement
securities (including possible economy of scale and incentive fee features); and
possible benefits to the Insurance Company as a result of the Contract
(including intangibles such as increased visibility in the financial community).
In connection with the investment and administrative services provided to the
Trust by the Insurance Company, the Trustees concluded that the administration
of private placement securities (and particularly private mezzanine securities)
is more extensive, costs more and requires greater time and expertise than a
portfolio of only public securities. Valuation of private placement securities,
for example, is more time consuming and requires significantly more expertise
than valuation of publicly-traded securities. In making comparisons with other
funds, therefore, the Trustees considered the percentage of the Trust's
portfolio comprised of private placement securities. The Trustees also
considered the Insurance Company's abilities to find and negotiate private
placement securities having equity features; the Trust's investment performance
over various periods of time; comparisons of the Trust's investment performance
to other funds investing in restricted securities and equities and to stock and
bond indices; the quality of service provided by the Insurance Company
(including the size, experience and professionalism of the Insurance Company's
investment, compliance and accounting staffs); the profitability of the Contract
to the Insurance Company; the Trust's expenses and its expense ratio compared to
other similar funds; the
12
Insurance Company's soft dollar practices; and possible alternatives to the
engagement of the Insurance Company. The Trustees concluded, among other things,
that the investment performance of the Trust's portfolio for the twelve-month
and twenty-four month periods ended September 30, 1998 was satisfactory and that
its expense ratio (excluding interest expenses) for the fiscal year ended
December 31, 1998 was competitive. Based on their consideration of these and
other factors, the Trustees (including a majority of the Trustees who are not
"interested persons" (as defined by the Investment Company Act of 1940), of the
Trust or of the Insurance Company) approved, and recommended that shareholders
approve, the continuation of the Contract as now in effect.
Prior to the Annual Meeting of Shareholders on April 23, 1999, the Trustees
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.
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 and policies 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 request is acceded to.
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 office space and office equipment, safekeeping facilities,
accounting and
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bookkeeping services, and necessary executive, clerical and secretarial
personnel for the performance of the foregoing services.
The Insurance Company pays the compensation and expenses of all officers and
executive employees of the Trust, and of all Trustees of the Trust who are
officers or employees of the Insurance Company, as well as the expenses of
office rent, telephone, utilities, office furniture, equipment and other office
expenses of the Trust.
The Trust pays the fees and expenses of Trustees who are not officers or
employees of the Insurance Company, and 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 auditors,
transfer agents, dividend disbursing agents, registrars and custodians and
depositories of its assets; taxes or governmental fees; the cost of preparing
and mailing dividends, reports, notices and proxy material to shareholders;
brokers' commissions or underwriting fees; and insurance for its Trustees.
Expenses incurred jointly by the Trust, the Insurance Company, MassMutual
Participation 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.
Under the Contract, the Trust pays the Insurance Company a quarterly base
rate (the "Base Fee Rate") of 5/16 of 1% of the net asset value of the Trust
(approximately equivalent to 1.25% on an annual basis), plus or minus a
performance adjustment (the "Performance Adjustment") of up to 1/16 of 1% of the
net asset value of the Trust (approximately equivalent to .25% on an annual
basis).
14
The Performance Adjustment is based on the Trust's performance as compared
to a benchmark rate of return (the "Target 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 the Trust's
actual rate of return over the Measurement Period and the Target Rate. If the
Trust's actual rate of return exceeds the Target Rate, the Base Fee Rate is
increased by an amount equal to the Performance Adjustment; if the Trust's
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% of the net asset value of the Trust
(approximately equivalent to .25% on an annual basis). The advisory fee payable
by the Trust is equal to the Base Fee Rate (as adjusted by the Performance
Adjustment) times the net asset value of the Trust as of the Valuation Date.
At a meeting on January 22, 1999, the Board of Trustees of the Trust valued
the Trust's portfolio securities as of the close of business on December 31,
1998, and arrived at a value for the net assets of the Trust at that date of
$205,019,403.
The Contract provides that the Insurance Company will reimburse the Trust
for any amount, not exceeding the Insurance Company's entire advisory fee
payable by the Trust to the Insurance Company 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
15
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 the Insurance Company shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Trust except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Insurance Company in the performance of its duties
or from reckless disregard by the Insurance Company of its obligations and
duties under the Contract.
The Contract is terminable on 60 days' written notice by the Trust's Board
of Trustees, by a "majority vote" of the Trust's shares or by the Insurance
Company. It will terminate automatically in the event of its assignment within
the meaning of the Investment Company Act. Until terminated, the Contract will
remain in force from year to year 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 a "majority vote" of the Trust's shares.
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 the continuance of the Contract will
require the affirmative "majority vote" of the shareholders.
16
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 consistent with the policy of obtaining best price and
execution, the Insurance Company may place orders with brokers and dealers who
supply market quotations to the Trust or its agents for portfolio valuation
purposes, or who supply research, market and statistical information to the
Trust or 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 certain 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 is 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
transactions may be useful to the Insurance Company in providing services to the
Trust.
During the fiscal year ended December 31, 1998, the Trust paid an aggregate
sum of $82,284 in brokerage commissions, including approximately $270 paid to
Jefferies, Inc. ("Jefferies"). Jefferies is a subsidiary of a company for which
one Trustee serves as director. Portfolio turnover for the fiscal year ended
December 31, 1998 was 60.14%.
17
INVESTMENT ADVISER
The names and addresses of the principal executive
officer and each director of the Insurance Company and
his or her principal occupations are given below:
ROBERT J. O'CONNELL
1295 State Street
Springfield, Massachusetts 01111
President and Chief Executive Officer
of the Insurance Company.
THOMAS B. WHEELER
1295 State Street
Springfield, Massachusetts 01111
Chairman of the Board of Directors
of the Insurance Company.
ROGER G. ACKERMAN
One Riverfront Plaza
Corning, New York 14831
Chairman and Chief Executive Officer, Corning
Incorporated (manufacturer of specialty materials,
communication equipment, and consumer products).
JAMES R. BIRLE
2 Soundview Drive
Greenwich, Connecticut 06836
Chairman, Resolute Partners LLC.
GENE CHAO
733 S.W. Vista Avenue
Portland, Oregon 97205
Chairman, President 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.
18
ANTHONY DOWNS
1775 Massachusetts Avenue N.W.
Washington, D.C. 20036
Senior Fellow, The Brookings Institution
(non-profit research center).
JAMES L. DUNLAP
1201 Louisiana
Suite 1400
Houston, Texas 77002
Vice Chairman, Ocean Energy Corporation.
WILLIAM B. ELLIS
31 Pound Foolish Lane
Glastonbury, Connecticut 06033
Retired; former Chairman, Northeast Utilities
(electric utility). Senior Fellow Yale University
School of Forestry and Environmental Studies.
ROBERT M. FUREK
1 State Street
Suite 2310
Hartford, Connecticut 06103
Chairman, State Board of Trustees for the Hartford
School System.
CHARLES K. GIFFORD
100 Federal Street
Boston, Massachusetts 02110
Chairman and Chief Executive Officer, BankBoston N.A.
and BankBoston Corporation.
WILLIAM N. GRIGGS
75 Wall Street
20th Floor
New York, New York 10005
Managing Director, Griggs & Santow, Inc.
(business consultant).
19
GEORGE B. HARVEY
663 Ponus Ridge
New Canaan, Connecticut 06840
Retired; former 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 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 Corp.
(diversified manufacturer and distributor).
SHELDON B. LUBAR
700 North Water Street
Suite 1200
Milwaukee, Wisconsin 53202
Chairman, Lubar & Co. Incorporated (investment
management and advisory company).
WILLIAM B. MARX, JR.
5 Peacock Lane
Village of Golf, Florida 33436
Retired; former 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 State Real Estate Holding
Company (real estate).
ALFRED M. ZEIEN
Prudential Tower
Boston, Massachusetts 02199
Chairman and Chief Executive Officer, The Gillette
Company (manufacturer of personal care products).
20
Executive Officers of the Trust (other than Trustees)
who are officers or employees of the Insurance
Company, are listed below with their principal
occupation or employment during the past five years.
The term of each such Executive Officer is until the next
meeting of the Board of Trustees following the 1999
Annual Meeting of Shareholders and until his successor
shall have been chosen and qualified.
STUART H. REESE
President (since 1995), Executive Vice President
(1993-1995) of the Trust. Chief Executive Director
(since 1997), Senior Vice President (1993-1997)
of the Insurance Company. Age: 43.
ROBERT E. JOYAL
Senior Vice President (since 1989) of the Trust.
Executive Director (since 1997), Senior Managing
Director (1996-1997), Vice President and Managing
Director (1989-1996) of the Insurance Company.
Age: 54.
CLIFFORD M. NOREEN
Vice President (since 1993) of the Trust. Senior
Managing Director (since 1996), Vice President
(1995-1996), Second Vice President (1992-1994) of the
Insurance Company. Age: 41.
STEPHEN L. KUHN
Vice President and Secretary (since 1988) of the
Trust. Vice President and Deputy General Counsel
(since 1997), Vice President and Associate General
Counsel (1992-1997) of the Insurance Company.
Age: 52.
CHARLES C. McCOBB, Jr.
Chief Financial Officer (since 1998), Vice President
(since 1997) of the Trust. Managing Director
(since 1997), MassMutual; Managing Director and Vice
President (1994-1997), Citicorp, Inc. (banking); Vice
President and Managing Director (1973-1994), Aetna
Life and Casualty (insurance company). Age: 55
21
MARK B. ACKERMAN
Treasurer (since 1998), Comptroller (1997-1998),
Associate Treasurer (1995-1998) of the Trust.
Investment Director (since 1996), Associate Investment
Director (1994-1996) of the Insurance Company.
Age:33
Other officers of the Trust who are officers or employees of the Insurance
Company are: Richard C. Morrison, Mary Wilson Kibbe, Mark A. Ahmed, Roger W.
Crandall, Andrew C. Dickey, Walter T. Dwyer, Michael P. Hermsen, Michael L.
Klofas, Thomas S. Li, Kathleen Lynch, Mary Ann Z. McCarthy, Richard E. Spencer
II, John B. Wheeler, Lisa M. Kusek, William N. Holm, John B. Joyce, Victoria
Fortier, Ann F. Lomeli, Kathleen Kraez, Maura Ann Batchelor, John Cunningham,
Edward Youmell, James T. Birchall, Jill A. Fields, Patrick J. Joyce, Robert M.
Shettle, Lisa J. Yoerg and Emeka Onukwugha.
The Insurance Company also advises MassMutual Participation Investors
("Participation Investors"), a closed-end, diversified management investment
company, having net assets of $105,199,998 million as of December 31, 1998. The
Insurance Company's Investment Advisory and Administrative Services Contract
with Participation Investors provides that the Insurance Company is to be paid a
quarterly fee equal to 0.225% of the value of the net assets of Participation
Investors as of the close of business on the last business day of each fiscal
quarter (approximately equivalent to .90% on an annual basis).
Net Assets Advisory Fee
as of (on an
Name of Fund 12/31/98 annual basis)
MassMutual
Participation $105.2 million .90% of net assets
Investors
In addition to acting as investment adviser and administrator to the Trust
and Participation Investors, the Insurance Company acts as investment adviser to
MML Series Investment Fund and MassMutual Institutional Funds, which are open-
end management investment companies investing in publicly traded securities.
22
Like other businesses and governments around the world, the Trust could be
adversely affected if the computer systems used by the Insurance Company (and
those with which it does business on behalf of the Trust) and the Trust's other
service providers do not properly recognize the year 2000. This is commonly
known as the "Year 2000" issue. In 1996, the Insurance Company began an
enterprise-wide process of identifying, evaluating and implementing changes to
computer systems and application software to address the Year 2000 issue. The
Trust has been informed that this is one of the Insurance Company's highest
business operational priorities. The Insurance Company is also seeking
assurances from the Trust's custodian and transfer agent in order to identify
and resolve Year 2000 issues.
(4) OTHER BUSINESS
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 card to vote proxies on such matters in accordance with their best
judgment.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
During the fiscal year Mark B. Ackerman inadvertently failed to file SEC
Form 3 in a timely manner upon his election as Treasurer and executive officer
of the Trust. In addition, four employees of the Insurance Company, who had
reporting responsibilities with respect to transactions in securities of the
Trust failed to timely file SEC Form 4 in connection with certain deferrals and
transfers to a "shadow account" under an employee benefit plan of the Insurance
Company. Lawrence V. Burkett, Jr. failed to timely file eight forms with respect
to twelve transactions; Robert E. Joyal failed to timely file seven forms with
respect to eleven transactions; Mary Wilson Kibbe failed to timely file ten
forms with respect to ten transactions and Efrem Marder failed to timely file
three forms with respect to four transactions.
23
PROPOSALS BY SHAREHOLDERS
Any shareholder intending to present a proposal at the Annual Meeting to be
held in 2000 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 1, 1999,
to be considered for inclusion in the Trust's proxy material for its 2000 Annual
Meeting. In addition, proxies for that meeting will be voted in the discretion
of management on proposals submitted by January 16, 2000.
ADDITIONAL INFORMATION
Proxies will be solicited by mail and may be solicited in person or by
telephone or facsimile 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 facsimile 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 would be
approximately $25,000. 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, 1998,
including financial statements, a schedule of the Trust's investments as of such
date and other data, was mailed, on or about February 28, 1999, to all
shareholders of record as of the record date. The financial statements included
in such Annual Report are
24
incorporated herein by reference. Any shareholder may request a copy of the
Annual Report and the most recent semi-annual report, which will be furnished
without charge, by calling (toll-free) the Trust's transfer agent, Shareholder
Financial Services, Inc., at 1-800-647-7374.
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 3, 1999
25
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L4287P (399)
APPENDIX
FORM OF PROXY
MASSMUTUAL CORPORATE INVESTORS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Stephen L. Kuhn and Charles C. McCobb, Jr.,
and each of them, attorneys and proxies of the undersigned, with power of
substitution to vote all shares of MassMutual Corporate 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 23, 1999, at 2:00 p.m. Springfield time, and at any adjournments
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).
PLEASE SIGN ON REVERSE SIDE
SEE REVERSE
SIDE
Please mark votes as in this example.
1. Election of Trustees
Nominees: Marshall D. Butler, Jack A. Laughery and Corine T. Norgaard for the
terms set forth in the proxy statement.
FOR WITHHELD
For all nominees except as noted above
2. Ratification of the selection of PricewaterhouseCoopers LLP as auditors for
the fiscal year ending December 31, 1999.
FOR AGAINST ABSTAIN
3. Approval of continuance of the Trust's Investment Services Contract with
Massachusetts Mutual Life Insurance Company, dated July 1, 1988.
FOR AGAINST ABSTAIN
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
ADDRESS CHANGE AND
NOTE AT LEFT.
MARK HERE IF
YOU PLAN TO ATTEND
THE MEETING.
Signature: Date:
Signature: Date:
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.
2