ASSET ALLOCATION PORTFOLIO 200
ASSET ALLOCATION PORTFOLIO 300 AND
ASSET ALLOCATION PORTFOLIO 400
Series of Asset Allocation Portfolios
Elizabethan Square
George Town, Grand Cayman, BWI
Telephone: (809) 945-1824
NOTICE OF SPECIAL MEETING OF HOLDERS OF BENEFICIAL INTERESTS
To be held October 10, 1996
A Special Meeting of Holders of Beneficial Interests in Asset Allocation
Portfolio 200, Asset Allocation Portfolio 300 and Asset Allocation Portfolio
400 (collectively, the "Portfolios"), series of Asset Allocation Portfolios
(the "Trust"), will be held at the offices of Signature Financial Group
(Cayman), Ltd., Elizabethan Square, George Town, Grand Cayman, BWI, on
Thursday, October 10, 1996 at 3 p.m., local time, for the following purposes:
ITEM 1. To consider and vote on approval of a new Sub-Management
Agreement between Citibank, N.A. and Hotchkis & Wiley, with
respect to Asset Allocation Portfolio 200, Asset Allocation
Portfolio 300 and Asset Allocation Portfolio 400.
ITEM 2. To consider and vote on approval of the selection of Price
Waterhouse as the independent certified public accountants of
Asset Allocation Portfolios with respect to Asset Allocation
Portfolio 200, Asset Allocation Portfolio 300 and Asset
Allocation Portfolio 400, to be employed through the fiscal year
ending December 31, 1996.
ITEM 3. To transact such other business as may properly come before the
Special Meeting of Holders of Beneficial Interests and any
adjournments thereof.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT YOU VOTE IN FAVOR OF
ITEMS 1 AND 2.
Only holders of beneficial interests of record on August 9, 1996 will be
entitled to vote at the Special Meeting of Holders of Beneficial Interests and
at any adjournments thereof.
Susan Jakuboski, Assistant Secretary
August 29, 1996
YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOUR PROMPTLY VOTING AND
SIGNING AND RETURNING THE ENCLOSED PROXY, WHICH WILL HELP AVOID THE ADDITIONAL
EXPENSE OF A SECOND SOLICITATION. THE ENCLOSED ADDRESSED ENVELOPE REQUIRES NO
POSTAGE AND IS PROVIDED FOR YOUR CONVENIENCE.
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ASSET ALLOCATION PORTFOLIO 200,
ASSET ALLOCATION PORTFOLIO 300 AND
ASSET ALLOCATION PORTFOLIO 400
Series of Asset Allocation Portfolios
Elizabethan Square
George Town, Grand Cayman, BWI
Telephone: (809) 945-1824
PROXY STATEMENT
This Proxy Statement and Notice of Special Meeting with accompanying form
of proxy are being mailed by the Board of Trustees of Asset Allocation
Portfolios (the "Trust") on behalf of Asset Allocation Portfolio 200, Asset
Allocation Portfolio 300 and Asset Allocation Portfolio 400 (each, a
"Portfolio" and collectively, the "Portfolios"), series of the Trust, on or
about August 29, 1996. They are being furnished in connection with the
solicitation of proxies by the Board of Trustees of the Trust for use at the
Special Meeting of Holders of Beneficial Interests in the Portfolios, or any
adjournment thereof, to be held at the offices of Signature Financial Group
(Cayman), Ltd., Elizabethan Square, George Town, Grand Cayman, BWI, on
Thursday, October 10, 1996 at 3 p.m., local time (the "Meeting"), for the
purposes set forth in the accompanying Notice of Special Meeting.
The Trust currently has four series, three of which, the Portfolios, are
covered by this Proxy Statement. The Trust is a registered investment company
organized as a New York trust under a Declaration of Trust dated as of December
14, 1995. The Portfolios were designated as separate series of the Trust on
February 9, 1996. The mailing address of the Trust is Elizabethan Square,
George Town, Grand Cayman, BWI. CitiSelectSM Folio 200, CitiSelectSM Folio 300
and CitiSelectSM Folio 400 (each, a "Fund" and collectively, the "Funds"),
series of Landmark Funds I, an open-end, diversified, registered investment
company, invest all of their investable assets in Asset Allocation Portfolio
200, Asset Allocation Portfolio 300 and Asset Allocation Portfolio 400,
respectively. Each of the Portfolios has the same investment objective as its
corresponding Fund.
The Portfolios commenced operations on June 17, 1996 and have not yet
issued a semi-annual or an annual report.
MANNER OF VOTING PROXIES AND VOTE REQUIRED
If the accompanying form of proxy is executed properly and returned,
interests represented by it will be voted at the Meeting in accordance with the
instructions on the proxy. Holders of beneficial interests in each of the
Portfolios will vote separately with respect to each Item. If no instructions
are specified, all interests in each Portfolio will be voted for proposed Items
1 and 2. If the enclosed form of proxy is executed and returned, it may
nevertheless be revoked prior to its exercise by a signed writing delivered at
the Meeting or filed with the Secretary of the Trust.
If sufficient votes to approve the proposed Items 1 and 2 are not
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies. Any such adjournment
will require the affirmative vote of a majority of those interests voted at the
Meeting. When voting on a proposed adjournment, the persons named as proxies
will vote all interests that they are entitled to vote with respect to Items 1
and 2 for the proposed adjournment, unless directed to disapprove the Item, in
which case such interests will be voted against the proposed adjournment.
<PAGE>
With respect to each Portfolio, the presence in person or by proxy of the
holders of a majority of the outstanding interests in that Portfolio entitled
to vote is required to constitute a quorum at the Meeting for purposes of
voting on Items 1 and 2. For purposes of determining the presence of a quorum
for transacting business at the Meeting, abstentions will be treated as shares
that are present but which have not been voted. For this reason, abstentions
will have the effect of a "no" vote for purposes of obtaining the requisite
approval of Items 1 and 2.
The cost of soliciting proxies in the accompanying form, which is not
expected to be more than $5,000, will be borne by Hotchkis & Wiley. In
addition to solicitation by mail, proxies may be solicited by the Board of
Trustees of the Trust, officers, and regular employees and agents of the Trust
without compensation therefor.
The close of business on August 9, 1996 has been fixed as the Record Date
for the determination of holders of beneficial interests entitled to notice of
and to vote at the Meeting. $36,177,446 of beneficial interests in Asset
Allocation Portfolio 200, $73,344,797 of beneficial interests in Asset
Allocation Portfolio 300 and $103,178,206 of beneficial interests in Asset
Allocation Portfolio 400 were outstanding as of the close of business on the
Record Date. Holders of record at the close of business on the Record Date will
be entitled to vote in the proportion that their beneficial interests in each
Portfolio bear to the total beneficial interests in that Portfolio.
INTERESTS OF CERTAIN PERSONS
As of the Record Date, the Trustees and officers of the Trust, as a group,
owned beneficially or had the right to vote less than 1% of the outstanding
interests in any of the Portfolios or shares of any of the Funds.
As of the Record Date, CitiSelectSM Folio 200 had the right to vote
approximately 99.9% of the interests in Asset Allocation Portfolio 200,
CitiSelectSM Folio 300 had the right to vote approximately 99.9% of the
interests in Asset Allocation Portfolio 300 and CitiSelectSM Folio 400 had the
right to vote approximately 99.9% of the interests in Asset Allocation
Portfolio 400.
SUBMISSION OF CERTAIN PROPOSALS
The Trust is a trust formed under the laws of the State of New York, and
as such is not required to hold annual meetings of holders of beneficial
interests, although special meetings may be called for the Portfolios, or for
the Trust as a whole, for purposes such as electing Trustees or removing
Trustees, changing fundamental policies, or approving an advisory contract.
Proposals of holders of beneficial interests to be presented at any subsequent
meeting of holders of beneficial interests must be received by the Trust at the
Trust's office within a reasonable time before the proxy solicitation is made.
<PAGE>
ITEM 1. APPROVAL OR DISAPPROVAL OF HOTCHKIS & WILEY SUB-MANAGEMENT AGREEMENT
THE TRANSACTION
Hotchkis & Wiley ("Hotchkis") currently serves as an investment subadviser
of the Portfolios pursuant to a sub-management agreement (the "Current Hotchkis
Sub-Management Agreement") between Hotchkis and Citibank, N.A. ("Citibank" or
the "Manager"), the manager of the assets of each of the Portfolios. The
general partner of Hotchkis has entered into a definitive agreement to sell all
of the partnership interests in Hotchkis to Merrill Lynch & Co., Inc., a
Delaware corporation ("Merrill Lynch"). After completion of the transaction
(hereafter, the "Transaction"), Hotchkis will become a division of Merrill
Lynch ("New Hotchkis"). Because of the anticipated change in control of
Hotchkis, holders of beneficial interests in the Portfolios are being asked to
vote on a new sub-management agreement (the "New Hotchkis Sub-Management
Agreement") between New Hotchkis and the Manager. The terms and conditions of
the New Hotchkis Sub-Management Agreement, including the investment advisory
fees, are identical in all material respects to those of the Current Hotchkis
Sub-Management Agreement, with the exception of the effective date, termination
date and the name of the entity to act as subadviser.
BACKGROUND
As disclosed in the Portfolios' Registration Statement, the Portfolios are each
HubSM funds within a two-tier, master/feeder mutual fund structure, also
referred to as a Hub and Spoke(R) structure. Hub and Spoke(R) is a registered
service mark of Signature Financial Group, Inc. In the Hub and Spoke(R)
structure, the Funds, unlike other mutual funds which directly acquire and
manage their own portfolios of securities, seek to achieve their respective
investment objectives by investing all of their investable assets in a
corresponding Portfolio. Each of the Portfolios has the same investment
objective as its corresponding Fund.
Citibank, Citicorp Center, 153 East 53rd Street, New York, New York,
manages the assets of each of the Portfolios and provides administrative
services to the Portfolios pursuant to separate Management Agreements with the
Trust dated as of February 9, 1996 (the "Management Agreements"). Subject to
the terms of the Management Agreements, the Manager is responsible for the
investment management of each of the Portfolios, selects, subject to the review
and approval of the Board of Trustees of the Trust, appropriate subadvisers to
make the investment selections with respect to specific asset classes for the
Portfolios consistent with the guidelines and directions set by the Manager and
the Board of Trustees of the Trust, and reviews each subadviser's continued
performance.
Hotchkis, a California limited partnership, maintains its principal office
at 800 West Sixth Street, Fifth Floor, Los Angeles, California 90017. The
Manager has delegated the responsibility for the daily management of
international equity securities for each of the Portfolios to Hotchkis. The
Current Hotchkis Sub-Management Agreement was most recently approved by 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 (the "1940 Act"), of any party to the Current Hotchkis Sub-Management
Agreement (the "Independent Trustees") on February 9, 1996, and was approved by
the initial holder of beneficial interests in each of the Portfolios on
June 17, 1996.
<PAGE>
On June 19, 1996, John F. Hotchkis, George Wiley and the other members of
Hotchkis and Wiley, a Delaware Limited Liability Company and the general
partner of Hotchkis, entered into a definitive agreement (the "Purchase
Agreement") to sell all of the partnership interests in Hotchkis to Merrill
Lynch. In connection with the sale, Merrill Lynch has provided incentives for
certain key personnel to remain employed with Hotchkis.
In connection with the Transaction, John F. Hotchkis will enter into an
employment agreement with Merrill Lynch Capital Management Group to serve as
Chairman of the New Hotchkis, while Mr. Wiley, who is retiring, will enter into
a services agreement with Merrill Lynch Capital Management Group to serve as a
special advisor to Merrill Lynch Capital Management Group. Michael L. Quinn,
the head of Merrill Lynch Capital Management Group, will serve as New Hotchkis'
Chief Executive Officer. It is expected that all other managing directors, all
principals except for Laird Landmann and Tad Rivelle, who have resigned, and
substantially all key employees of Hotchkis will sign long-term employment
agreements with Merrill Lynch Capital Management Group. With the exception of
Messrs. Wiley, Landmann and Rivelle, it is expected that all of the current
portfolio managers will continue to be responsible for the day-to-day
investment management of their client assignments.
The Transaction, which is subject to various approvals and consents, is
expected to close by the end of the fourth quarter of 1996. After the closing,
New Hotchkis will remain in Los Angeles. New Hotchkis will become part of
Merrill Lynch Asset Management, L.P. and will operate as a separate business
unit called Hotchkis and Wiley, a division of the Capital Management Group of
Merrill Lynch Asset Management, L.P. No changes in investment philosophy or
processes are anticipated.
The following information regarding Merrill Lynch has been provided by
Merrill Lynch.
Merrill Lynch, a Delaware corporation, is a holding company formed in 1973
that, through its subsidiaries and affiliates, provides investment, financing,
insurance and related services on a global basis. Such services include
securities brokering, trading and underwriting; investment banking and other
corporate finance advisory activities, including loan syndication; asset
management and other investment advisory services; trading of foreign exchange
instruments, futures, commodities and derivatives; securities clearance
services; banking, trust and lending services; and insurance sales and
underwriting services. These services are provided to a large group of clients
and customers, including individual investors, corporations, governments and
governmental agencies and financial institutions.
Merrill Lynch conducts its business from its World Headquarters facility
in New York City, New York, with additional principal locations in New Jersey,
London, Tokyo, Hong Kong, various regional facilities located in the United
States and in other countries, and numerous retail sales and other offices
throughout the world. At December 29, 1995, Merrill Lynch employed
approximately 46,000 people.
Merrill Lynch conducts its worldwide business through a number of highly
integrated subsidiaries and affiliates which frequently participate in the
facilitation and consummation of a single transaction.
Merrill Lynch's asset management activities are conducted through, or
managed by, Merrill Lynch Asset Management, L.P., Fund Asset Management L.P.,
and their affiliates (together, "MLAM"). MLAM constitutes the investment
management arm of Merrill Lynch, and is one of the largest mutual fund managers
in the world. Merrill Lynch Asset Management, L.P. is located at 800 Scudders
Mill Road, Plainsboro, New Jersey 08536. MLAM is a limited partnership, 100% of
the interests in which are owned by Merrill Lynch or its subsidiaries.
Princeton Services, Inc. is the general partner of MLAM (owned through a
holding company by Merrill Lynch). Arthur Zeikel is the President of MLAM.
<PAGE>
At the end of 1995, MLAM managed 217 portfolios representing a wide variety of
investment objectives ranging from money market funds to long-term taxable and
tax-exempt fixed income funds, along a broad spectrum of quality ratings and
maturities as well as a wide variety of equity funds which in the aggregate
invest in more than 48 markets globally.
MLAM's other major business activity is separate account management. Separate
account assets under management were $26.2 billion at the end of 1995 (which
amount includes approximately $3.9 billion of general account assets managed on
behalf of insurance companies that are affiliates of MLAM) as compared with
approximately $24.3 billion in 1994 (which amount includes approximately $4.4
billion of general account assets managed on behalf of insurance companies that
are affiliates of MLAM).
By the end of 1995, total assets under management by MLAM approximated $196
billion as compared with $164 billion at year-end 1994.
As required by the 1940 Act, the Current Hotchkis Sub-Management Agreement
between Hotchkis and the Manager provided for its automatic termination upon
its "assignment." The 1940 Act defines "assignment" to include any direct or
indirect transfer or hypothecation of a contract or of a controlling block of
the assignor's outstanding voting securities by a security holder of the
assignor. Consummation of the Transaction will give rise to an assignment
within the meaning of the 1940 Act, and therefore will result in the automatic
termination of the Current Hotchkis Sub-Management Agreement.
In accordance with the requirements of the 1940 Act, the New Hotchkis
Sub-Management Agreement must be approved by the holders of beneficial
interests in each of the Portfolios.
THE NEW AND THE CURRENT HOTCHKIS SUB-MANAGEMENT AGREEMENTS
If the New Hotchkis Sub-Management Agreement is approved by the required
holders of beneficial interests in the Portfolios, as described herein, New
Hotchkis will serve as subadviser to the Portfolios. The terms and conditions
of the New Hotchkis Sub-Management Agreement are identical in all material
respects to those of the Current Hotchkis Sub-Management Agreement, with the
exception of the effective date, termination date and the name of the entity to
act as subadviser. A description of the investment advisory fees to be paid to
New Hotchkis by the Manager is set forth below under the caption "Investment
Advisory Fees." The New Hotchkis Sub-Management Agreement, if approved by the
vote of the holders of a "majority of the outstanding voting securities" (as
such term is defined below) of the Portfolios, will become effective on the
closing date of the Transaction or, if later, on the date on which such
Agreement receives the requisite approval of holders of beneficial interests in
the Portfolios, and will continue in effect for a two-year period, and
thereafter from year to year, subject to approval annually in accordance with
the 1940 Act. The New Hotchkis Sub-Management Agreement may be terminated at
any time without the payment of any penalty by the Board of Trustees of the
Trust or by the vote of a "majority of the outstanding voting securities" of
the Portfolios or by the Manager. The New Hotchkis Sub-Management Agreement may
also be terminated by New Hotchkis upon 90 days' advance written notice to the
Manager. The New Hotchkis Sub-Management Agreement will also terminate
automatically in the event of its "assignment" (as defined in the 1940 Act).
<PAGE>
Under the New Hotchkis Sub-Management Agreement, as under the Current
Hotchkis Sub-Management Agreement, New Hotchkis will furnish continuing
portfolio management services with respect to international equity securities
to each of the Portfolios, subject always to the provisions of the 1940 Act and
to the investment objective, policies, procedures and restrictions imposed by
the then current Registration Statement under the 1940 Act with respect to each
of the Portfolios. New Hotchkis will also provide the Manager with such
investment advice and reports and data as are requested by the Manager.
Like the Current Hotchkis Sub-Management Agreement, the New Hotchkis
Sub-Management Agreement provides that New Hotchkis will be responsible for
providing the Manager with such investment advice and supervision as the
Manager may from time to time consider necessary for the proper supervision of
such portion of each Portfolio's investment assets as the Manager may designate
from time to time; furnishing continuously an investment program and
determining from time to time what securities shall be purchased, sold or
exchanged and what portion of the assets of a Portfolio allocated by the
Manager to New Hotchkis will be held uninvested, subject always to the
restrictions of the Trust's Declaration of Trust, dated as of December 14,
1995, and By-laws, as each may be amended from time to time, the provisions of
the 1940 Act, the then-current Registration Statement with respect to that
Portfolio, and subject, further, to New Hotchkis notifying the Manager in
advance of its intention to purchase any securities except insofar as the
requirement for such notification may be waived or limited by the Manager;
making recommendations to the Manager as to the manner in which proxies, voting
rights, rights to consent to corporate action and any other rights pertaining
to a Portfolio's portfolio securities shall be exercised; and taking, on behalf
of each Portfolio, all actions which New Hotchkis deems necessary to implement
the investment policies of each Portfolio, and in particular placing all orders
for the purchase or sale of securities for each Portfolio's account with the
brokers or dealers selected by it, and to that end New Hotchkis is authorized
as the agent of the Trust to give instructions to the custodian and any
subcustodian of a Portfolio as to deliveries of securities and payments of cash
for the account of that Portfolio.
New Hotchkis is not liable for any error of judgment or mistake of law or
for any loss suffered by the Trust in connection with the matters to which the
New Hotchkis Sub-Management Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the performance of its
obligations and duties, or by reason of reckless disregard of its obligations
and duties under such Agreement.
Investors should refer to Exhibit A attached hereto for the complete terms
of the New Hotchkis Sub-Management Agreement, and the description of the New
Hotchkis Sub-Management Agreement set forth herein is qualified in its entirety
by the provisions of the New Hotchkis Sub-Management Agreement as set forth in
such Exhibit.
If the Transaction does not occur, the New Hotchkis Sub-Management
Agreement presented for approval in Item 1 will not take effect, and
subadvisory services will continue to be provided to the Portfolios under the
Current Hotchkis Sub-Management Agreement.
<PAGE>
INVESTMENT ADVISORY FEES
The fees under the New Hotchkis Sub-Management Agreement are the same as the
fees under the Current Hotchkis Sub-Management Agreement. Under the New
Hotchkis Sub-Management Agreement, the Manager (not the Portfolios) pays New
Hotchkis for its services on the basis of the annual fee schedule set forth
below:
New Hotchkis Fee Schedule:
0.60% on first $10 million
0.55% on next $40 million
0.45% on next $100 million
0.35% on next $150 million
0.30% on remaining assets
Fees are accrued daily and payable monthly and are at the annual rates
equal to the percentages specified above of the aggregate assets of the
Portfolios allocated to New Hotchkis.
Net fees accrued to Hotchkis for services provided pursuant to the Current
Hotchkis Sub-Management Agreement for the period from the commencement of the
Portfolios' operations on June 17, 1996 to June 30, 1996 were $1,983.17.
Neither Hotchkis, nor any affiliated person of Hotchkis, nor any affiliated
person of such person, received any other fees from the Manager or from the
Portfolios for services provided to the Portfolios during this period. There
were no other material payments by the Manager or the Portfolios to Hotchkis,
any affiliated person of Hotchkis, or any affiliated person of such person,
during such period.
As of July 31, 1996, Asset Allocation Portfolio 200 had net assets of
$33,179,437; Asset Allocation Portfolio 300 had net assets of $65,405,461; and
Asset Allocation Portfolio 400 had net assets of $91,845,604.
For the period from the commencement of the Portfolios' operations on June 17,
1996 to June 30, 1996, brokerage commissions totaling $15,754.73 were paid
by the Portfolios to Morgan Stanley & Co. Incorporated ("Morgan Stanley"), an
affiliate of Miller Anderson & Sherrerd, LLP, an investment subadviser of the
Portfolios, or to certain other broker-dealers affiliated with Morgan Stanley.
No other commissions were paid by the Portfolios to any broker during the same
period that (i) is an affiliated person of the Portfolios, or (ii) is
affiliated with any such person described in clause (i) of this paragraph, or
(iii) an affiliated person of which is an affiliated person of the Portfolios,
the Manager, Hotchkis, or the placement agent for the Portfolios.
INFORMATION REGARDING HOTCHKIS
The Managing Directors of Hotchkis are John Hotchkis, George Wiley, Roger
DeBard, George Davis, Michael Baxter and Gail Bardin. Each of these
individuals, whose address is 800 West 6th Street, Los Angeles, CA 90017, is
also a portfolio manager of Hotchkis. With the exception of George Wiley, each
will sign a long-term employment agreement with Merrill Lynch Capital
Management Group and will serve as a managing director of Merrill Lynch Capital
Management Group.
<PAGE>
Hotchkis is a California limited partnership which, in 1995, reorganized
through a transaction in which all the General Partners of Hotchkis contributed
their interests to Hotchkis and Wiley, a newly organized Delaware limited
liability company (the "LLC"). The General Partners then became members of the
LLC and the LLC became the new general partner of Hotchkis. As a result of the
1995 reorganization, the majority of the voting interests in the LLC are held
by Mr. Hotchkis and Mr. Wiley and entities controlled by Mr. Wiley. Total
international equity securities under management by Hotchkis and its affiliates
at June 30, 1996 were approximately $817 million, $468 million of which were
assets of registered investment companies.
There have been no purchases or sales of any interests in Hotchkis or New
Hotchkis since commencement of the Portfolios' operations on June 17, 1996 by
any of the Trustees of the Trust. No officer or Trustee of the Trust is an
officer, employee, or general partner of or has any other material direct or
indirect interest in Hotchkis or New Hotchkis or any other person controlling,
controlled by or under common control with Hotchkis or New Hotchkis. Since
commencement of the Portfolios' operations on June 17, 1996, none of the
Trustees of the Trust has had any material interest, direct or indirect in any
material transaction, or in any material proposed transaction, to which
Hotchkis or New Hotchkis or any subsidiary of Hotchkis or New Hotchkis was or
is to be a party.
Other investment companies for which New Hotchkis or its affiliates plan
to serve as an investment adviser or subadviser as to international equity
securities after the Transaction and the rates of compensation therefor, are
set forth in Exhibit B attached hereto.
THE EVALUATION BY THE BOARD OF TRUSTEES
The Board of Trustees of the Trust has determined that, by approving the
New Hotchkis Sub-Management Agreement, the Portfolios can best assure
themselves that services now being provided by Hotchkis will continue to be
provided without interruption.
At a meeting on August 9, 1996, the Trustees of the Trust considered
information with respect to whether the New Hotchkis Sub-Management Agreement
was in the best interests of the Portfolios and their holders of beneficial
interests. The Board of Trustees of the Trust considered, among other factors,
representations by Hotchkis that the transactions contemplated would not
materially affect the investment advisory operations of Hotchkis upon the
transfer of such operations to Merrill Lynch or the level or quality of
advisory services provided to the Portfolios; that, subject to the approval of
the Board of Trustees of the Trust and the required approval of holders of
beneficial interests in the Portfolios, the same personnel at Hotchkis who
provide services to the Portfolios would continue to do so under the New
Hotchkis Sub-Management Agreement; that the advisory fees would not change
under the New Hotchkis Sub-Management Agreement; and that the Portfolios would
not be subjected to any unfair burden as a result of the Transaction. The Board
of Trustees of the Trust also considered the terms of the Transaction; the
differences in the ownership and control of New Hotchkis; the nature and
quality of services expected to be provided by New Hotchkis; whether the
Portfolios will be adversely affected by restrictions on securities dealings
with Merrill Lynch that will result from New Hotchkis' status as a division of
Merrill Lynch; and information regarding fees, expense ratios and performance.
In evaluating New Hotchkis' ability to provide services to the Portfolios, the
Trustees considered information as to New Hotchkis' business organization,
financial resources and personnel. The Board of Trustees of the Trust also
considered that under circumstances in which best price and execution may be
obtained from more than one broker or dealer, New Hotchkis may, in its
discretion, purchase and sell securities through dealers who provide research,
statistical and other information to New Hotchkis. Although certain research,
market and statistical information from brokers and dealers can be useful to
the Portfolios and New Hotchkis, New Hotchkis has advised that such information
is, in its opinion, only supplementary to New Hotchkis' own research activities
and the information must still be analyzed, weighed and reviewed by New
Hotchkis. It was noted that such information may be useful to New Hotchkis in
providing services to clients other than the Portfolios. Conversely, it was
noted such information provided to New Hotchkis by brokers and dealers through
whom other clients of New Hotchkis effect securities transactions may be useful
to New Hotchkis in providing services to the Portfolios.
<PAGE>
Based upon its review, the Board of Trustees of the Trust concluded that
the New Hotchkis Sub-Management Agreement is reasonable, fair and in the best
interests of each Portfolio and its holders of beneficial interests, and that
the fees provided in the New Hotchkis Sub-Management Agreement are fair and
reasonable in light of the usual and customary charges made by others for
services of the same nature and quality. Accordingly, after consideration of
the above factors, and such other factors and information as it deemed
relevant, the Board of Trustees of the Trust, including all of the Independent
Trustees, unanimously approved the New Hotchkis Sub-Management Agreement and
voted to recommend its approval by the holders of beneficial interests in each
Portfolio.
REQUIRED VOTE
Approval of the New Hotchkis Sub-Management Agreement will require the
approval of "a majority of the outstanding voting securities" (as defined
below) of each of the Portfolios present in person or represented by proxy at a
meeting of the holders of the beneficial interests in each of the Portfolios.
Under the 1940 Act, a "majority of the outstanding voting securities" of an
issuer means the affirmative vote by the lesser of (a) 67% or more of the
issuer's voting securities present at a meeting if the holders of more than 50%
of the issuer's outstanding voting securities are present in person or
represented by proxy or (b) more than 50% of the issuer's outstanding voting
securities.
In the event that the New Hotchkis Investment Sub-Management Agreement
does not receive the requisite approval of holders of beneficial interests with
respect to any Portfolio, the Manager would (a) manage the assets of the
Portfolio previously allowed to Hotchkis itself, (b) negotiate a new investment
subadvisory agreement with a different advisory organization or (c) make other
appropriate arrangements, in the case of alternative (b) or (c), subject to
approval in accordance with the 1940 Act.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT THE HOLDERS OF BENEFICIAL
INTERESTS IN EACH PORTFOLIO VOTE FOR APPROVAL OF THE NEW HOTCHKIS
SUB-MANAGEMENT AGREEMENT.
ITEM 2. SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
It is intended that proxies cast by each Portfolio's holders of beneficial
interests not limited to the contrary will be voted in favor of ratifying the
selection, by a majority of the trustees of the Trust who are not "interested
persons" (as that term is defined in the 1940 Act) of the Trust, of Price
Waterhouse under Section 32(a) of the 1940 Act as independent public
accountants to certify every financial statement of the Portfolio required by
any law or regulation to be certified by independent public accountants and
filed with the SEC in respect of all or any part of the fiscal year of the
Portfolio ending December 31, 1996. Price Waterhouse has no direct or material
indirect interest in any Portfolio.
<PAGE>
Price Waterhouse has served as the Portfolios' independent certified public
accountants since the commencement of operations on June 17, 1996, providing
audit services and consultation with respect to the preparation of filings with
the SEC.
Representatives of Price Waterhouse are not expected to be present at the
Meeting.
ITEM 3. OTHER BUSINESS
The management of the Trust knows of no other business to be presented at
the Meeting. If any additional matters should be properly presented, it is
intended that the enclosed proxy (if not limited to the contrary) will be voted
in accordance with the judgment of the persons named in the enclosed form of
proxy.
ADDITIONAL INFORMATION
The Portfolios' placement agent is the Landmark Funds Broker-Dealer
Services, Inc., c/o Signature Financial Group (Cayman), Ltd., Elizabethan
Square, George Town, Grand Cayman, BWI. State Street Bank and Trust Company
("State Street") acts as custodian for each Portfolio. The principal business
address of State Street is 225 Franklin Street, Boston, Massachusetts 02110.
Signature Financial Services, Inc. ("SFSI") provides transfer agency services
to each Portfolio. The principal business address of SFSI is 6 St. James
Avenue, Boston, Massachusetts 02116. Citibank provides administrative services
to the Portfolios pursuant to the Management Agreements.
YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
SUSAN JAKUBOSKI
Susan Jakuboski, Assistant Secretary
August 29, 1996
<PAGE>
EXHIBIT A
SUB-MANAGEMENT AGREEMENT
ASSET ALLOCATION PORTFOLIOS
SUB-MANAGEMENT AGREEMENT, dated as of __________ __, 1996, by and between
Citibank, N.A., a national banking association (the "Manager"), and Hotchkis
and Wiley, a division of the Capital Management Group of Merrill Lynch Asset
Management, L.P. (the "Subadviser").
W I T N E S S E T H:
WHEREAS, the Manager has been retained by Asset Allocation Portfolios, a
New York trust (the "Trust"), to act as investment adviser to the Trust with
respect to the series of the Trust designated as Asset Allocation Portfolio
200, Asset Allocation Portfolio 300, Asset Allocation Portfolio 400 and Asset
Allocation Portfolio 500 (each individually a "Portfolio" and collectively the
"Portfolios"), and
WHEREAS, the Trust engages in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act"), and
WHEREAS, the Manager wishes to engage the Subadviser to provide certain
investment advisory services for the Portfolios, and the Subadviser is willing
to provide such investment advisory services for the Portfolios on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Appointment of the Subadviser. In accordance with and subject to the
Management Agreement between the Trust and the Manager (the "Management
Agreement"), the Manager hereby appoints the Subadviser to act as subadviser
with respect to each of the Portfolios for the period and on the terms set
forth in this Agreement. The Subadviser accepts such appointment and agrees to
provide an investment program with respect to the Portfolios for the
compensation provided by this Agreement.
<PAGE>
2. Duties of the Subadviser. The Subadviser shall provide the Manager with
such investment advice and supervision as the Manager may from time to time
consider necessary for the proper supervision of such portion of each
Portfolio's investment assets as the Manager may designate from time to time.
Notwithstanding any provision of this Agreement, the Manager shall retain all
rights and ultimate responsibilities to supervise and, in its discretion,
conduct investment advisory activities relating to the Trust. The Subadviser
shall furnish continuously an investment program and shall determine from time
to time what securities shall be purchased, sold or exchanged and what portion
of the assets of a Portfolio allocated by the Manager to the Subadviser shall
be held uninvested, subject always to the restrictions of the Trust's
Declaration of Trust, dated December 14, 1995, and By-laws, as each may be
amended from time to time (respectively, the "Declaration" and the "By-Laws"),
the provisions of the 1940 Act, the then-current Registration Statement of the
Trust with respect to that Portfolio, and subject, further, to the Subadviser
notifying the Manager in advance of the Subadviser's intention to purchase any
securities except insofar as the requirement for such notification may be
waived or limited by the Manager, it being understood that the Subadviser shall
be responsible for compliance with any restrictions imposed in writing by the
Manager from time to time in order to facilitate compliance with the
above-mentioned restrictions and such other restrictions as the Manager may
determine. Further, the Manager or the Trustees of the Trust may at any time,
upon written notice to the Subadviser, suspend or restrict the right of the
Subadviser to determine what securities shall be purchased or sold on behalf of
a Portfolio and what portion, if any, of the assets of a Portfolio allocated by
the Manager to the Subadviser shall be held uninvested. The Subadviser shall
also, as requested, make recommendations to the Manager as to the manner in
which proxies, voting rights, rights to consent to corporate action and any
other rights pertaining to a Portfolio's portfolio securities shall be
exercised. Should the Board of Trustees of the Trust or the Manager at any
time, however, make any definite determination as to investment policy
applicable to a Portfolio and notify the Subadviser thereof in writing, the
Subadviser shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination
has been revoked.
<PAGE>
The Subadviser shall take, on behalf of each Portfolio, all actions which
it deems necessary to implement the investment policies determined as provided
above, and in particular to place all orders for the purchase or sale of
securities for each Portfolio's account with the brokers or dealers selected by
it, and to that end the Subadviser is authorized as the agent of the Trust to
give instructions to the custodian and any subcustodian of a Portfolio as to
deliveries of securities and payments of cash for the account of that
Portfolio. The Subadviser will advise the Manager on the same day it gives any
such instructions. In connection with the selection of such brokers or dealers
and the placing of such orders, brokers or dealers may be selected who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to a Portfolio and/or the other
accounts over which the Subadviser or its affiliates exercise investment
discretion. The Subadviser is authorized to pay a broker or dealer who provides
such brokerage and research services a commission for executing a portfolio
transaction for a Portfolio which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if
the Subadviser determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer. This determination may be viewed in terms of
either that particular transaction or the overall responsibilities which the
Subadviser and its affiliates have with respect to accounts over which they
exercise investment discretion. The Trustees of the Trust shall periodically
review the commissions paid by each Portfolio to determine if the commissions
paid over representative periods of time were reasonable in relation to the
benefits to the Portfolio. In making purchases or sales of securities or other
property for the account of a Portfolio, the Subadviser may deal with itself or
with the Trustees of the Trust or the Trust's underwriter or distributor, to
the extent such actions are permitted by the 1940 Act. The Board of Trustees of
the Trust, in its discretion, may instruct the Subadviser to effect all or a
portion of its securities transactions with one or more brokers and/or dealers
selected by the Board of Trustees, if it determines that the use of such
brokers and/or dealers is in the best interest of the Trust.
3. Allocation of Charges and Expenses. The Subadviser shall furnish at its
own expense all necessary services, facilities and personnel in connection with
its responsibilities under Section 2 above. Except as provided in the foregoing
sentence, it is understood that the Trust will pay from the assets of each
Portfolio all of its own expenses allocable to that Portfolio including,
without limitation, organization costs of the Portfolio; compensation of
Trustees who are not "interested persons" of the Trust; governmental fees;
interest charges; loan commitment fees; taxes; membership dues in industry
associations allocable to the Trust; fees and expenses of independent auditors,
legal counsel and any transfer agent, distributor, registrar or dividend
disbursing agent of the Trust; expenses of issuing and redeeming beneficial
interests and servicing investor accounts; expenses of preparing, typesetting,
printing and mailing investor reports, notices, proxy statements and reports to
governmental officers and commissions and to investors in the Portfolio;
expenses connected with the execution, recording and settlement of security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Portfolio, including safekeeping of Portfolios and securities
and maintaining required books and accounts; expenses of calculating the net
asset value of the Portfolio (including but not limited to the fees of
independent pricing services); expenses of meetings of the Portfolio's
investors; expenses relating to the issuance of beneficial interests in the
Portfolio; and such non-recurring or extraordinary expenses as may arise,
including those relating to actions, suits or proceedings to which the Trust on
behalf of the Portfolio may be a party and the legal obligation which the Trust
may have to indemnify its Trustees and officers with respect thereto.
<PAGE>
4. Compensation of the Subadviser. For the services to be rendered by the
Subadviser hereunder, the Manager shall pay to the Subadviser out of the
management fee it receives from the Trust, and only to the extent thereof, an
investment subadvisory fee, accrued daily and paid monthly, at an annual rate
equal to the percentages specified below of the aggregate assets of all
Portfolios allocated to the Subadviser:
0.60% on the first $10 million;
0.55% on the next $40 million;
0.45% on the next $100 million;
0.35% on the next $150 million;
and 0.30% on remaining assets.
If the Subadviser serves as investment subadviser for less than the whole
of any period specified in this Section 4, the compensation to the Subadviser
shall be prorated. Neither the Trust nor the Portfolios shall be liable to the
Subadviser for the compensation of the Subadviser.
If in any fiscal year the aggregate expenses of a Portfolio and any fund
investing its assets therein (including fees pursuant to the Management
Agreement, but excluding interest, taxes, brokerage and, with the prior written
consent of the necessary state securities commissions, extraordinary expenses)
exceed the expense limitation of any state having jurisdiction over that
Portfolio and any fund investing its assets therein, the Manager may deduct
from the fees to be paid hereunder, or the Subadviser will bear such excess
expense on a pro-rata basis with the Manager, in the proportion that the
subadvisory fee payable pursuant to this Agreement bears to the fee payable to
the Manager pursuant to the Management Agreement, to the extent required by
state law. The Subadviser's obligation pursuant hereto will be limited to the
amount of its fees hereunder. Such deduction or payment, if any, will be
estimated daily, and reconciled and effected or paid, as the case may be, on a
monthly basis.
<PAGE>
5. Covenants of the Subadviser. The Subadviser agrees that it will not
deal with itself, or with the Trustees of the Trust or the Trust's principal
underwriter or distributor, as principals in making purchases or sales of
securities or other property for the account of a Portfolio, except as
permitted by the 1940 Act, will not take a long or short position in beneficial
interests of a Portfolio except as permitted by the Declaration, and will
comply with all other provisions of the Declaration and By-Laws and the
then-current Registration Statement applicable to each Portfolio relative to
the Subadviser and its directors and officers.
6. Limitation of Liability of the Subadviser. The Subadviser shall not be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in the execution of securities
transactions for a Portfolio, except for willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder. As used in this Section 6,
the term "Subadviser" shall include directors, officers and employees of the
Subadviser as well as the Subadviser itself. The Trust, on behalf of the
Portfolios, is expressly made a third party beneficiary of this Agreement, and
may enforce any obligations of the Subadviser under this Agreement and recover
directly from the Subadviser for any liability the Subadviser may have
hereunder.
7. Activities of the Subadviser. The services of the Subadviser to the
Portfolios are not to be deemed to be exclusive, the Subadviser being free to
render investment advisory and/or other services to others, including accounts
or investment management companies with similar or identical investment
objectives to the Portfolios. It is understood that Trustees, officers, and
investors of the Trust or the Manager are or may be or may become interested in
the Subadviser, as directors, officers, employees, or otherwise and that
directors, officers, and employees of the Subadviser are or may become
similarly interested in the Trust or the Manager and that the Subadviser may be
or may become interested in the Trust as an investor or otherwise.
8. Duration, Termination and Amendments of this Agreement. This Agreement
shall become effective as of the day and year first above written, and shall
govern the relations between the parties hereto thereafter and shall remain in
force until __________ __, 1998, on which date it will terminate unless its
continuance after __________ __, 1998 is "specifically approved at least
annually" (a) by the vote of a majority of the Trustees of the Trust who are
not "interested persons" of the Trust or of the Manager or of the Subadviser at
a meeting specifically called for the purpose of voting on such approval, and
(b) by the Board of Trustees of the Trust or by "vote of a majority of the
outstanding voting securities" of each Portfolio.
<PAGE>
This Agreement may be terminated as to any Portfolio at any time without
the payment of any penalty by (i) the Trustees, (ii) the "vote of a majority of
the outstanding voting securities" of that Portfolio, or (iii) the Manager, in
each case on not more than 60 days' nor less than 30 days' written notice to
the other party. This Agreement may be terminated as to any Portfolio at any
time without the payment of any penalty by the Subadviser on not less than 90
days' written notice to the Manager. This Agreement shall automatically
terminate in the event of its "assignment." Termination of this Agreement as to
any Portfolio shall not terminate this Agreement as it applies to the remaining
Portfolios.
This Agreement constitutes the entire agreement between the parties and
may be amended as to any Portfolio only if such amendment is approved by the
Subadviser and the "vote of a majority of the outstanding voting securities" of
that Portfolio (except for any such amendment as may be effected in the absence
of such approval without violating the 1940 Act). Amendment of any term of this
Agreement with respect to any single Portfolio shall not, without more, amend
such term with respect to any other Portfolio.
The terms "specifically approved at least annually," "vote of a majority
of the outstanding voting securities," "assignment," "affiliated person," and
"interested persons," when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
9. Governing Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts provided, however, that nothing herein will be construed in a
manner inconsistent with the 1940 Act, the Investment Advisers Act of 1940 or
any rules or regulations of the Securities and Exchange Commission thereunder.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
CITIBANK, N.A. HOTCHKIS AND WILEY,
a division of the Capital
Management Group of Merrill Lynch Asset
Management, L.P.
By:___________________ By:___________________________
Title:________________ Title:________________________
The foregoing is acknowledged:
The undersigned officer of the Trust has executed this Agreement not
individually but in his capacity as an officer of the Trust under the
Declaration. The Trust does not hereby undertake, on behalf of the Portfolios
or otherwise, any obligation to the Subadviser.
ASSET ALLOCATION PORTFOLIOS
on behalf of Asset Allocation Portfolio 200,
Asset Allocation Portfolio 300,
Asset Allocation Portfolio 400 and
Asset Allocation Portfolio 500
By:__________________________________
Title:_______________________________
<PAGE>
EXHIBIT B
OTHER INVESTMENT COMPANIES FOR WHICH HOTCHKIS & WILEY IS AN
INVESTMENT ADVISER OR SUBADVISER
Annual Fee (as a Percentage of Assets as of
Name of Fund Average Net Assets) June 30, 1996
American AAdvantage For all accounts (including $126,898,203
International Equity Fund (separate accounts) combined:
.60% of the first $10 million,
.50% of the next $140 million,
.30% of the next $50 million, and
.20% over $200 million
Hotchkis and Wiley .75 of 1% of average daily net $330,997,678
International Fund assets (annual expenses of the
Fund are limited to 1% of the
Fund's average net assets)
<PAGE>
PROXY BALLOT PROXY BALLOT
ASSET ALLOCATION PORTFOLIO 200
A Series of Asset Allocation Portfolios
A PROXY FOR A SPECIAL MEETING
OF HOLDERS OF BENEFICIAL INTERESTS TO BE HELD OCTOBER 10, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of Susan Jakuboski and Tamie Ebanks, or any of them, as Proxies of the
undersigned with full power of substitution, to vote on behalf of all of the
undersigned its interests in Asset Allocation Portfolio 200 (the "Portfolio"),
a series of Asset Allocation Portfolios (the "Trust"), which the undersigned is
entitled to vote at the Special Meeting of Holders of Beneficial Interests in
the Portfolio to be held at the offices of Signature Financial Group (Cayman),
Ltd., Elizabethan Square, George Town, Grand Cayman, BWI, on Thursday, October
10 at 3 p.m., local time, and at any adjournment thereof, as fully as the
undersigned would be entitled to vote if personally present, as follows:
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST.
THE INTERESTS REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY
PROPOSALS FOR WHICH NO CHOICE IS INDICATED.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH OTHER
MATTERS AS MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS.
If signing on behalf of a corporation,
please sign the full corporate name
and your name and indicate your
title. If you are a partner signing for
a partnership, please sign the
partnership name and your name.
Please sign, date and return in the
enclosed envelope.
<PAGE>
ASSET ALLOCATION PORTFOLIO 200
1. To consider and vote on approval of a new Sub-Management Agreement
between Citibank, N.A. and Hotchkis & Wiley, with respect to the Portfolio.
______FOR ______AGAINST ______ABSTAIN
2. To consider and vote on approval of the selection of Price Waterhouse
as the independent certified public accountants of Asset Allocation
Portfolios with respect to the Portfolio, to be employed through the fiscal
year ending December 31, 1996.
______FOR ______AGAINST ______ABSTAIN
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS BALLOT
________________________ ____________________________
Signature Date
<PAGE>
PROXY BALLOT PROXY BALLOT
ASSET ALLOCATION PORTFOLIO 300
A Series of Asset Allocation Portfolios
A PROXY FOR A SPECIAL MEETING
OF HOLDERS OF BENEFICIAL INTERESTS TO BE HELD OCTOBER 10, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of Susan Jakuboski and Tamie Ebanks, or any of them, as Proxies of the
undersigned with full power of substitution, to vote on behalf of all of the
undersigned its interests in Asset Allocation Portfolio 300 (the "Portfolio"),
a series of Asset Allocation Portfolios (the "Trust"), which the undersigned is
entitled to vote at the Special Meeting of Holders of Beneficial Interests in
the Portfolio to be held at the offices of Signature Financial Group (Cayman),
Ltd., Elizabethan Square, George Town, Grand Cayman, BWI, on Thursday, October
10, 1996 at 3 p.m., local time, and at any adjournment thereof, as fully as the
undersigned would be entitled to vote if personally present, as follows:
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST.
THE INTERESTS REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY
PROPOSALS FOR WHICH NO CHOICE IS INDICATED.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH OTHER
MATTERS AS MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS.
If signing on behalf of a corporation,
please sign the full corporate name
and your name and indicate your
title. If you are a partner signing for
a partnership, please sign the
partnership name and your name.
Please sign, date and return in the
enclosed envelope.
<PAGE>
ASSET ALLOCATION PORTFOLIO 300
1. To consider and vote on approval of a new Sub-Management Agreement
between Citibank, N.A. and Hotchkis & Wiley, with respect to the Portfolio.
______FOR ______AGAINST ______ABSTAIN
2. To consider and vote on approval of the selection of Price Waterhouse
as the independent certified public accountants of Asset Allocation
Portfolios with respect to the Portfolio, to be employed through the fiscal
year ending December 31, 1996.
______FOR ______AGAINST ______ABSTAIN
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS BALLOT
________________________ ____________________________
Signature Date
<PAGE>
PROXY BALLOT PROXY BALLOT
ASSET ALLOCATION PORTFOLIO 400
A Series of Asset Allocation Portfolios
A PROXY FOR A SPECIAL MEETING
OF HOLDERS OF BENEFICIAL INTERESTS TO BE HELD OCTOBER 10, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of Susan Jakuboski and Tamie Ebanks, or any of them, as Proxies of the
undersigned with full power of substitution, to vote on behalf of all of the
undersigned its interests in Asset Allocation Portfolio 400 (the "Portfolio"),
a series of Asset Allocation Portfolios (the "Trust"), which the undersigned is
entitled to vote at the Special Meeting of Holders of Beneficial Interests in
the Portfolio to be held at the offices of Signature Financial Group (Cayman),
Ltd., Elizabethan Square, George Town, Grand Cayman, BWI, on Thursday, October
10, 1996 at 3 p.m., local time, and at any adjournment thereof, as fully as the
undersigned would be entitled to vote if personally present, as follows:
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST.
THE INTERESTS REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY
PROPOSALS FOR WHICH NO CHOICE IS INDICATED.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH OTHER
MATTERS AS MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS.
If signing on behalf of a corporation,
please sign the full corporate name
and your name and indicate your
title. If you are a partner signing for
a partnership, please sign the
partnership name and your name.
Please sign, date and return in the
enclosed envelope.
<PAGE>
ASSET ALLOCATION PORTFOLIO 400
1. To consider and vote on approval of a new Sub-Management Agreement
between Citibank, N.A. and Hotchkis & Wiley, with respect to the Portfolio.
______FOR ______AGAINST ______ABSTAIN
2. To consider and vote on approval of the selection of Price Waterhouse
as the independent certified public accountants of Asset Allocation
Portfolios with respect to the Portfolio, to be employed through the fiscal
year ending December 31, 1996.
______FOR ______AGAINST ______ABSTAIN
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS BALLOT
________________________ ____________________________
Signature Date
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Act
of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Asset Allocation Portfolios - Asset Allocation Portfolio
200, Asset Allocation Portfolio 300
and Asset Allocation Portfolio 400
(Name of Registrant as Specified In Its Charter)
Susan Jakuboski
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
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):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[X] 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:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
