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SCHEDULE 14A
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:
<S> <C>
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Variable Annuity Portfolios (with respect to CitiSelect VIP Folio 200 Subaccount,
CitiSelect VIP Folio 300 Subaccount, CitiSelect VIP Folio 400 Subaccount,
CitiSelect VIP Folio 500 Subaccount and CitiFunds Small Cap Growth VIP
Portfolio Subaccount)
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(Name of Registrant as Specified In Its Charter)
Lea Anne Copenhefer
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
__________________________________________________________________________
[ ] 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:
__________________________________________________________________________
<PAGE>
PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
CITICORP LIFE INSURANCE COMPANY
800 Silver Lake Boulevard
P.O. Box 7031
Dover, Delaware 19903
February 17, 1999
Dear Contract Holder:
The accompanying materials relate to a Special Meeting of Contract Holders
of Variable Annuity Contracts issued by Citicorp Life Insurance Company
(Citicorp Life) with unit interests in CitiSelect(R) VIP Folio 200 Subaccount,
CitiSelect(R) VIP Folio 300 Subaccount, CitiSelect(R) VIP Folio 400 Subaccount,
CitiSelect(R) VIP Folio 500 Subaccount and CitiFundsSM Small Cap Growth VIP
Portfolio Subaccount of Citicorp Life Variable Annuity Separate Account, which
invest all of their investable assets in corresponding series of Variable
Annuity Portfolios (these series are known as the Funds). The Meeting will be
held on Friday, April 9, 1999 at 9:00 a.m., Eastern time.
YOUR PARTICIPATION AT THIS MEETING IS VERY IMPORTANT IN ORDER TO
ACCOMPLISH PROPOSED ACTIONS THAT THE BOARD OF DIRECTORS OF CITICORP LIFE
INSURANCE COMPANY HAS DETERMINED ARE FAIR AND REASONABLE AND IN YOUR BEST
INTERESTS.
If you cannot attend the Meeting, you may participate by proxy. As a
Contract Holder, you cast one vote for each $100 of dollar value of units that
you own. By separate mailing you will obtain instructions from affected
contract participants on how to vote your units. Please take a few moments to
read the enclosed materials and then cast your vote on the enclosed proxy card
in accordance with the instructions you receive from your contract participant.
VOTING TAKES ONLY A FEW MINUTES. EACH CONTRACT HOLDER'S VOTE IS IMPORTANT.
YOUR PROMPT RESPONSE WILL BE MUCH APPRECIATED.
The proposals you will vote on for the Subaccounts are summarized below.
Complete information is contained in the enclosed Proxy Statement.
ITEM 1. To instruct Citicorp Life to vote with respect to the approval
of a Sub-Management Agreement between Mutual Management Corp.
and Variable Annuity Portfolios with respect to CitiSelect VIP
Folios 200-500.
ITEM 2. To instruct Citicorp Life to vote with respect to the approval
of a Sub-Management Agreement between Salomon Brothers Asset
Management Limited and Variable Annuity Portfolios with respect
to CitiSelect VIP Folios 200-500.
<PAGE>
ITEM 3. To instruct Citicorp Life to vote with respect to the approval
of a Sub-Management Agreement between Salomon Brothers Asset
Management Inc and Variable Annuity Portfolios with respect to
CitiSelect VIP Folios 200-500.
ITEM 4. To instruct Citicorp Life to vote with respect to approval of an
amendment to the Funds' Declaration of Trust to allow the assets
of each Fund to be invested in one or more investment companies
to the extent not prohibited by the Investment Company Act of
1940, the rules and regulations thereunder, and exemptive orders
granted under such Act.
ITEM 5. To instruct Citicorp Life to vote with respect to the approval
of an amendment to the fundamental investment policies of each
Fund to allow the assets of that Fund to be invested in one or
more investment companies to the extent not prohibited by the
1940 Act.
ITEM 6. To instruct Citicorp Life to vote on authorizing the Trustees of
the Funds to select and change investment subadvisers and enter
into investment subadvisory agreements without obtaining the
approval of shareholders.
ITEM 7. To instruct Citicorp Life to vote on an amendment to the
fundamental investment policies of each Fund concerning that
Fund's ability to make loans to other persons and to buy or sell
futures contracts and options on futures.
ITEM 8. To instruct Citicorp Life to elect Heath B. McLendon as a
Trustee of the Funds.
ITEM 9. To instruct Citicorp Life to vote on the selection of
PricewaterhouseCoopers LLP as the independent certified public
accountants for each Fund.
ITEM 10. To transact such other business as may properly come before the
Special Meeting of Contract Holders and any adjournments
thereof.
<PAGE>
After you have voted on the proposals, please be sure to SIGN YOUR PROXY
CARD AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE. If you have any
questions regarding the issues to be voted on, or need assistance in completing
your proxy card, please contact ____________.
We appreciate your participation in this important meeting. Thank you.
Sincerely,
[Name]
[Title]
<PAGE>\
CITICORP LIFE INSURANCE COMPANY
800 Silver Lake Boulevard
P.O. Box 7031
Dover, Delaware 19903
NOTICE OF A SPECIAL MEETING
OF CONTRACT HOLDERS
To be held on April 9, 1999
Dear Participant:
Certain contributions made on your behalf to Citicorp Life Insurance
Company (Citicorp Life) with respect to the Variable Annuity Contract issued by
Citicorp Life to the holder of the Contract (known as the Contract Holder) have
been allocated at your direction to the CitiSelect(R) VIP Folio 200 Subaccount,
CitiSelect(R) VIP Folio 300 Subaccount, CitiSelect(R) VIP Folio 400 Subaccount,
CitiSelect(R) VIP Folio 500 Subaccount or the CitiFundsSM Small Cap Growth VIP
Portfolio Subaccount, each a subaccount of Citicorp Life Variable Annuity
Separate Account, a separate account of Citicorp Life. All of the investable
assets of each of the Subaccounts listed in the left hand column below are
invested in the corresponding series of Variable Annuity Portfolios, a
registered investment company, which are listed in the right hand column below.
Subaccounts Funds
CitiSelect(R)VIP Folio 200 Subaccount CitiSelect(R)VIP Folio 200
CitiSelect(R)VIP Folio 300 Subaccount CitiSelect(R)VIP Folio 300
CitiSelect(R)VIP Folio 400 Subaccount CitiSelect(R)VIP Folio 400
CitiSelect(R)VIP Folio 500 Subaccount CitiSelect(R)VIP Folio 500
CitiFundsSM Small Cap Growth VIP CitiFundsSM Small Cap Growth
Portfolio Subaccount VIP Portfolio
Variable Annuity Portfolios has called a meeting of its investors,
including the Subaccounts, to vote on certain matters. Citicorp Life, as the
legal owner of all of the assets of the Subaccounts, will vote on such matters
in accordance with the instructions received from contract owners of the
Variable Annuity Contracts with unit interests in the Subaccounts, including
the Contract Holder.
As a participant of record at the close of business on the record date,
February 10, 1999, you are entitled to instruct the Contract Holder as to how
the Contract Holder should vote on certain proposals to be considered at a
Special Meeting of Contract Holders described in the enclosed Notice of Special
Meeting and at any adjournments thereof. The enclosed Proxy Statement and
Notice of Special Meeting with accompanying form of proxy are being mailed to
you and other participants by the Contract Holder on or about February 17,
1999.
<PAGE>
The Meeting will be held at the offices of Citicorp Center, 153 East 53rd
Street, 14th Floor, New York, New York on Friday, April 9, 1999 at 9:00 a.m.
Eastern Time. You are entitled to provide the Contract Holder with voting
instructions for the following proposals to be voted upon:
ITEM 1. To instruct Citicorp Life to vote with respect to the approval
of a Sub-Management Agreement between Mutual Management Corp.
and Variable Annuity Portfolios with respect to CitiSelect VIP
Folios 200-500.
ITEM 2. To instruct Citicorp Life to vote with respect to the approval
of a Sub-Management Agreement between Salomon Brothers Asset
Management Limited and Variable Annuity Portfolios with respect
to CitiSelect VIP Folios 200-500.
ITEM 3. To instruct Citicorp Life to vote with respect to the approval
of a Sub-Management Agreement between Salomon Brothers Asset
Management Inc and Variable Annuity Portfolios with respect to
CitiSelect VIP Folios 200-500.
ITEM 4. To instruct Citicorp Life to vote with respect to approval of an
amendment to the Funds' Declaration of Trust to allow the assets
of each Fund to be invested in one or more investment companies
to the extent not prohibited by the Investment Company Act of
1940, the rules and regulations thereunder, and exemptive orders
granted under such Act.
ITEM 5. To instruct Citicorp Life to vote with respect to the approval
of an amendment to the fundamental investment policies of each
Fund to allow the assets of that Fund to be invested in one or
more investment companies to the extent not prohibited by the
1940 Act.
ITEM 6. To instruct Citicorp Life to vote on authorizing the Trustees of
the Funds to select and change investment subadvisers and enter
into investment subadvisory agreements without obtaining the
approval of shareholders.
ITEM 7. To instruct Citicorp Life to vote on an amendment to the
fundamental investment policies of each Fund concerning that
Fund's ability to make loans to other persons and to buy or sell
futures contracts and options on futures.
ITEM 8. To instruct Citicorp Life to elect Heath B. McLendon as a
Trustee of the Funds.
<PAGE>
ITEM 9. To instruct Citicorp Life to vote on the selection of
PricewaterhouseCoopers LLP as the independent certified public
accountants for each Fund.
ITEM 10. To transact such other business as may properly come before the
Special Meeting of Contract Holders and any adjournments
thereof.
The proposals to be considered at the Meeting are discussed in the
enclosed Proxy Statement. You are urged to read the enclosed Proxy Statement
prior to completing your ballot instructing the Contract Holder how to vote.
To instruct the Contract Holder as to how to vote your interests in the
Variable Annuity Contract allocated to the Subaccounts, you are asked to
promptly mark your voting instructions on the enclosed ballot, then sign, date
and mail it in the accompanying envelope.
IF A BALLOT IS NOT MARKED TO INDICATE VOTING INSTRUCTIONS BUT IS SIGNED,
DATED AND RETURNED IT WILL BE TREATED AS AN INSTRUCTION TO VOTE THE INTERESTS
REPRESENTED THEREBY FOR THE PROPOSALS.
THE UNIT INTERESTS FOR WHICH THE CONTRACT HOLDER RECEIVES NO VOTING
INSTRUCTIONS FROM PARTICIPANTS WILL BE VOTED BY THE CONTRACT HOlDER IN THE SAME
PROPORTION AS UNIT INTERESTS FOR WHICH THE CONTRACT HOLDER DOES, IN FACT,
RECEIVE VOTING INSTRUCTIONS.
Citicorp Life is not aware of any matters, other than the specified
proposals, to be acted upon at the Meeting. If any other matters come before
the Meeting, the Contract Holder will vote upon such matters in its discretion.
The Contract Holder reserves the right to vote for the adjournment of the
Meeting for the purpose of further solicitation of voting instructions.
At any time prior to the vote by the Contract Holder of the interests in
the Subaccount, you may revoke your voting instructions by written notice to
the Secretary of Citicorp Life at 800 Silver Lake Boulevard, P.O. Box 7031,
Dover, Delaware 19903.
<PAGE>
In addition to solicitation by mail, ballots may be solicited by the Board
of Directors, officers and employees of the Contract Holder without
compensation therefor.
Very truly yours,
CITICORP LIFE INSURANCE COMPANY
[Name]
[Title]
February 17, 1999
YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOUR PROMPTLY VOTING, SIGNING AND
RETURNING THE ENCLOSED BALLOT, WHICH WILL HELP AVOID THE AdDITIONAL EXPENSES OF
A SECOND SOLICITATION. THE ENCLOSED ADDRESSED ENVELOPE REQUIRES NO POSTAGE AND
IS PROVIDED FOR YOUR CONVENIENCE.
<PAGE>
PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
CITICORP LIFE VARIABLE ANNUITY SEPARATE ACCOUNT
A SEPARATE ACCOUNT
OF CITICORP LIFE INSURANCE COMPANY
800 Silver Lake Boulevard
P.O. Box 7031
Dover, Delaware 19903
NOTICE OF SPECIAL MEETING
OF CONTRACT HOLDERS
To be held Friday, April 9, 1999
A Special Meeting of Contract Holders of Variable Annuity Contracts issued
by Citicorp Life Insurance Company (Citicorp Life), with unit interests in
CitiSelect(R) VIP Folio 200 Subaccount, CitiSelect(R) VIP Folio 300 Subaccount,
CitiSelect(R) VIP Folio 400 Subaccount, CitiSelect(R) VIP Folio 500 Subaccount
or CitiFundsSM Small Cap Growth VIP Portfolio Subaccount of Citicorp Life
Variable Annuity Separate Account, a unit investment trust registered with the
Securities and Exchange Commission, which invest all of their investable assets
in corresponding series of Variable Annuity Portfolios, will be held at
Citicorp Center, 153 East 53rd Street, 14th Floor, New York, New York, on
Friday, April 9, 1999 at 9:00 a.m., Eastern Time, for the following purposes:
ITEM 1. To instruct Citicorp Life to vote with respect to the approval
of a Sub-Management Agreement between Mutual Management Corp.
and Variable Annuity Portfolios with respect to CitiSelect VIP
Folios 200-500.
ITEM 2. To instruct Citicorp Life to vote with respect to the approval
of a Sub-Management Agreement between Salomon Brothers Asset
Management Limited and Variable Annuity Portfolios with respect
to CitiSelect VIP Folios 200-500.
ITEM 3. To instruct Citicorp Life to vote with respect to the approval
of a Sub-Management Agreement between Salomon Brothers Asset
Management Inc and Variable Annuity Portfolios with respect to
CitiSelect VIP Folios 200-500.
ITEM 4. To instruct Citicorp Life to vote with respect to approval of an
amendment to the Funds' Declaration of Trust to allow the assets
of each Fund to be invested in one or more investment companies
to the extent not prohibited by the Investment Company Act of
1940, the rules and regulations thereunder, and exemptive orders
granted under such Act.
<PAGE>
ITEM 5. To instruct Citicorp Life to vote with respect to the approval
of an amendment to the fundamental investment policies of each
Fund to allow the assets of that Fund to be invested in one or
more investment companies to the extent not prohibited by the
1940 Act.
ITEM 6. To instruct Citicorp Life to vote on authorizing the Trustees of
the Funds to select and change investment subadvisers and enter
into investment subadvisory agreements without obtaining the
approval of shareholders.
ITEM 7. To instruct Citicorp Life to vote on an amendment to the
fundamental investment policies of each Fund concerning that
Fund's ability to make loans to other persons and to buy or sell
futures contracts and options on futures.
ITEM 8. To instruct Citicorp Life to elect Heath B. McLendon as a
Trustee of the Funds.
ITEM 9. To instruct Citicorp Life to vote on the selection of
PricewaterhouseCoopers LLP as the independent certified public
accountants for each Fund.
ITEM 10. To transact such other business as may properly come before the
Special Meeting of Contract Holders and any adjournments
thereof.
THE BOARD OF DIRECTORS OF CITICORP LIFE RECOMMENDS THAT YOU VOTE IN FAVOR
OF EACH OF ITEMS 1 THROUGH 9.
Only Contract Holders of record on February 10, 1999 will be entitled to
vote at the Special Meeting of Contract Holders and at any adjournments
thereof.
February 17, 1999
<PAGE>
YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOUR PROMPTLY VOTING, 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.
<PAGE>
PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
CITISELECT(R) VIP FOLIO 200 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 300 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 400 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 500 SUBACCOUNT AND
CITIFUNDSSM SMALL CAP GROWTH VIP PORTFOLIO
SUBACCOUNT
OF
CITICORP LIFE VARIABLE ANNUITY SEPARATE ACCOUNT,
A SEPARATE ACCOUNT OF
CITICORP LIFE INSURANCE COMPANY
800 Silver Lake Boulevard
P.O. Box 7031
Dover, Delaware 19903
PROXY STATEMENT
This Proxy Statement and Notice of Special Meeting with accompanying form
of proxy are being furnished in connection with the solicitation of proxies by
the Board of Directors of Citicorp Life Insurance Company (Citicorp Life), on
behalf of Citicorp Life Variable Annuity Separate Account, a separate account
of Citicorp Life, for use at a Special Meeting of contract holders (known as
the Contract Holders) of Variable Annuity Contracts issued by Citicorp Life
with unit interests in CitiSelect(R) VIP Folio 200 Subaccount, CitiSelect(R)
VIP Folio 300 Subaccount, CitiSelect(R) VIP Folio 400 Subaccount, CitiSelect(R)
VIP Folio 500 Subaccount or CitiFundsSM Small Cap Growth VIP Portfolio
Subaccount of Citicorp Life Variable Annuity Separate Account, or any
adjournment thereof, to be held at Citicorp Center, 153 East 53rd Street, 14th
Floor, New York, New York, on Friday, April 9, 1999 at 9:00 a.m., Eastern Time,
for the purposes set forth in the accompanying Notice of Special Meeting.
The close of business on February 10, 1999 has been fixed as the Record
Date for the determination of (a) Contract Holders entitled to notice of and to
vote at the Meeting, and (b) Participants entitled to give instructions to
Contract Holders as to how to vote at the Meeting. __________ Units of
CitiSelect(R) VIP Folio 200 Subaccount, __________ Units of CitiSelect(R) VIP
Folio 300 Subaccount, __________ Units of CitiSelect(R) VIP Folio 400
Subaccount, __________ Units of CitiSelect(R) VIP Folio 500 Subaccount and
<PAGE>
__________ Units of CitiFundsSM Small Cap Growth VIP Portfolio Subaccount were
outstanding as of the close of business on the Record Date. Contract Holders of
record at the close of business on the Record Date will be entitled to one vote
for $100 of dollar value of Units in the applicable Subaccount, with fractional
votes for amounts less than $100.
All of the investable assets of each of the Subaccounts listed in the left
hand column below are invested in the corresponding series of Variable Annuity
Portfolios, a registered investment company, which are listed in the right hand
column below.
Subaccounts Funds
CitiSelect(R)VIP Folio 200 Subaccount CitiSelect(R)VIP Folio 200
CitiSelect(R)VIP Folio 300 Subaccount CitiSelect(R)VIP Folio 300
CitiSelect(R)VIP Folio 400 Subaccount CitiSelect(R)VIP Folio 400
CitiSelect(R)VIP Folio 500 Subaccount CitiSelect(R)VIP Folio 500
CitiFundsSM Small Cap Growth VIP CitiFundsSM Small Cap Growth
Portfolio Subaccount VIP Portfolio
The Annual Report for the Subaccounts for the fiscal years ended December
31, 1998, including audited financial statements, has previously been sent to
Contract Holders and is available without charge by written request or by
calling ______________.
This Proxy Statement and Notice of Special Meeting with accompanying form
of proxy are being mailed by the Board of Directors of Citicorp Life on or
about February 17, 1999.
MANNER OF VOTING PROXIES AND VOTE REQUIRED
Each Subaccount is a shareholder of the corresponding Fund. Citicorp Life,
as legal owner of all the assets of each Subaccount, has been asked to vote on
certain matters with respect to the Funds because Variable Annuity Portfolios
has called a meeting of its investors to vote on such matters. Citicorp Life
will vote on such matters in accordance with the instructions received from
Contract Holders. Each employee participating on the Record Date under a
Variable Annuity Contract issued to or adopted by a Contract Holder (known as a
Participant) shall have the right to give written instructions to the
applicable Contract Holder with respect to the interest in the Funds
attributable to his or her portion of the unit interests held in the
Subaccounts. Each Contract Holder shall provide voting instructions to Citicorp
Life with respect to its unit interests in accordance with the instructions
received from its Participants.
If the accompanying form of proxy is executed properly and returned, unit
interests represented by it will be voted at the Meeting in accordance with the
instructions on the proxy. Contract Holders of the CitiFundsSM Small Cap Growth
VIP Portfolio Subaccount will not vote on Items 1, 2 and 3, and Contract
Holders of all of the Subaccounts will vote together on the election of Mr.
<PAGE>
McLendon as a Trustee of the Funds. Otherwise, Contract Holders of each
Subaccount will vote separately with respect to each Item. IF NO INSTRUCTIONS
ARE SPECIFIED, ALL UNIT INTERESTS OF THE CITISELECT SMALL CAP GROWTH VIP
PORTFOLIO SUBACCOUNT WILL BE VOTED FOR EACH OF PROPOSED ITEMS 4 THROUGH 9, AND
ALL UNIT INTERESTS OF EACH OTHER SUBACCOUNT WILL BE VOTED FOR EACH OF PROPOSED
ITEMS 1 THROUGH 9. 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 Citicorp Life.
If sufficient votes to approve the proposed Items 1 through 9 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 unit interests voted
at the Meeting. When voting on a proposed adjournment, the persons named as
proxies will vote all unit interests that they are entitled to vote with
respect to Items 1 through 9 for the proposed adjournment, unless directed to
disapprove the Item, in which case such unit interests will be voted against
the proposed adjournment.
With respect to each Subaccount, the presence in person or by proxy of
the holders of a majority of the outstanding unit interests in that Subaccount
entitled to vote is required to constitute a quorum at the Meeting for purposes
of voting on Items 1 through 9, as applicable. For purposes of determining the
presence of a quorum for transacting business at the Meeting, abstentions will
be treated as unit interests 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 through 9.
GENERAL BACKGROUND
As disclosed in the Citicorp Life Variable Annuity Separate Account
Prospectus, all of the investable assets of the Subaccounts are invested in the
Funds.
The Funds are managed by Citibank, N.A. The CitiSelect VIP Folios are
asset allocation funds. Each of these Funds invests in a mix of equity, fixed
income and money market securities that is designed by Citibank to offer a
different level of potential return with a different amount of risk. These
Funds employ investment subadvisers to manage certain types of securities or to
manage securities in particular investment styles. Citibank monitors and
supervises the subadvisers. Citibank itself manages the assets of CitiFunds
Small Cap Growth VIP Portfolio.
Citicorp Life, a the legal owner of all the assets of the Subaccounts
is being asked to vote on the approval three new subadvisers for the Funds.
Approval of these subadvisers is covered by Items 1, 2 and 3 below. These
subadvisers will continue to manage the Funds' assets after the implementation
of the proposed restructuring described below.
<PAGE>
CURRENT STRUCTURE AND SUBADVISERS
The Funds currently operate on a stand-alone basis; that is, each Fund
invests directly in investment securities in accordance with its investment
objective and policies.
The assets of CitiFunds Small Cap Growth VIP Portfolio are invested
primarily in small capitalization growth securities and currently are managed
directly by Citibank.
Citibank determines the asset allocations for CitiSelect VIP Folios
200-500. The assets of these Funds currently are allocated among up to eight
types of securities, or asset classes. These asset classes are large
capitalization growth securities, large capitalization value securities, small
capitalization growth securities, small capitalization value securities,
international equity securities, U.S. fixed income securities, foreign
government securities and money market securities. Citibank has decided to add
high yield securities as an additional asset class for the Funds and to delete
the money market securities asset class. The addition or deletion of asset
classes does not, by itself, require shareholder approval, but hiring a
subadviser for any new asset class would require shareholder approval.
Citibank manages certain of the Funds' asset classes itself, and
supervises subadvisers for the remaining asset classes. Currently, Citibank
manages the large capitalization growth, small capitalization growth, U.S.
fixed income and money market asset classes. The following subadvisers
currently manage the asset classes indicated: large capitalization value
securities, Mutual Management Corp.; small capitalization value securities,
Franklin Advisory Services, Inc; foreign government securities, Salomon
Brothers Asset Management Limited (effective March 1, 1999); and international
equity securities, Hotchkis and Wiley. Mutual Management Corp. and Salomon
Brothers Asset Management Limited may act as subadvisers only for an interim
period unless their sub-management agreements are approved by Fund
shareholders. Also, Citibank is recommending that Salomon Brothers Asset
Management Inc be hired as a subadviser to manage the Funds' high yield
securities. Salomon Brothers Asset Management Inc cannot act as a subadviser
until its sub-management agreement is approved by Fund shareholders.
Under the CitiSelect VIP Folios' existing structure, Citibank and each
subadviser manage the assets in each asset class for each of CitiSelect VIP
Folios 200-500 and the assets of CitiFunds Small Cap Growth VIP Portfolio
separately. This means, for example, that Citibank currently manages five pools
of assets consisting of small capitalization growth securities, one for each
Fund. Because the assets of CitiSelect VIP Folios 200-500 currently are
allocated among up to eight types of securities, Citibank and the subadvisers
currently manage a total of 33 separate pools of assets, including the small
capitalization growth securities managed for CitiFunds Small Cap Growth VIP
Portfolio. This structure is administratively burdensome and expensive for the
Funds. In addition, because of the separate pools of assets, the Funds are
<PAGE>
limited in their ability to take advantage of economies of scale of asset
management.
PROPOSED STRUCTURe AND SUBADVISERS
Until recently, mutual funds could not invest their assets in more than
one other registered investment company without obtaining exemptive relief from
the Securities and Exchange Commission. Recent amendments to the Investment
Company Act of 1940 now permit funds to invest their assets in multiple
registered investment companies so long as the investment companies hold
themselves out to investors as related companies for purposes of investment and
investor services.
In order to take advantage of this change in law and any future changes
in law on this topic, the Funds are proposing the following restructuring:
eight or more new investment companies (referred to as "New Portfolios"), each
corresponding to a particular asset class of the existing Funds or any new
asset class in which the Funds are permitted to invest, will be created. This
will permit all of the Funds' assets of a single type to be managed in a single
pool. Each of CitiSelect VIP Folios 200-500 will contribute each of its
securities to that New Portfolio representing the asset class for that
particular security (e.g., foreign bonds will be contributed to the New
Portfolio which will invest solely in foreign bonds and related investments).
CitiFunds Small Cap Growth VIP Portfolio will contribute its securities to that
New Portfolio which will invest solely in small capitalization growth
securities. In exchange, each Fund will receive an interest in the New
Portfolio to which the contribution was made. As a result, each Fund will
invest all of its investable assets in one or more of the New Portfolios. After
giving effect to the restructuring, Citibank will continue to perform its asset
allocation services at the Fund level for the CitiSelect VIP Folios.
Under this proposed structure, Citibank and the subadvisers described
above will manage the assets in each asset class in a single pool. This means,
for example, that Citibank will manage all small cap growth securities for all
of the Funds in a single New Portfolio. The restructuring is illustrated by the
chart below.
BEFORE RESTRUCTURING: EACH FUND IS A STAND-ALONE FUND CONTAINING ALL
APPLICABLE ASSET CLASSES.
[Description of Chart
(Page layout - landscape)
Five boxes across page. Each box contains the name of one Fund. The boxes
contain the following names (from left to right): CitiSelect VIP Folio 200,
CitiSelect VIP Folio 300, CitiSelect VIP Folio 400, CitiSelect VIP Folio 500
and CitiFunds Small Cap Growth VIP Portfolio.]
<PAGE>
AFTER RESTRUCTURING: EACH FUND INVESTS ALL OF ITS INVESTABLE ASSETS IN ONE OR
MORE NEW PORTFOLIOS.
[Description of Chart
(Page layout - landscape)
Five boxes across page. Each box contains the name of one Fund. The boxes
contain the following names (from left to right): CitiSelect VIP Folio 200,
CitiSelect VIP Folio 300, CitiSelect VIP Folio 400, CitiSelect VIP Folio 500
and CitiFunds Small Cap Growth VIP Portfolio. Eight boxes are placed across the
page under the five boxes containing the names of the Funds. Each of the eight
boxes contains the heading "New Portfolio." In each of the eight boxes under
the "New Portfolio" heading is the name of a portfolio. The names of the
portfolios in the boxes are (from left to right): Large Cap Growth Securities,
Large Cap Value Securities, Small Cap Value Securities, Intermediate Income
Securities, International Securities, Foreign Government Bonds, High Yield
Securities and Small Cap Growth Securities. Arrows connect the first four boxes
containing the names of the Funds to each of the eight boxes beneath them and
connect the fifth box containing the name of CitiFunds Small Cap Growth VIP
Portfolio to the box containing the caption, "New Portfolio Small Cap Growth
Securities."]
THE FUNDS' EXPENSE RATIO WILL NOT INCREASE AS A RESULT OF THE
RESTRUCTURING. CONTRACT HOLDERS ALSO SHOULD NOTE THAT THE CoNTRACTUAL LEVEL OF
MANAGEMENT FEES FOR FUND SHAREHOLDERS WILL NOT INCREASE. IT IS EXPECTeD THAT
THE SAME PERSONNEL AT CITIBANK AND AT EACH SUBADVISER WHO CURRENTLY PROVIDE
INVESTMENT MANAGEMENT SERVICES WILL CONTINUE TO DO SO AFTER THE RESTRUCTURING,
AND THE NATURE, LEVEL AND QUALITY OF SERVICES TO THE FUNDS WILL NOT BE
ADVERSELy AFFECTED.
The restructuring is intended to be tax-free to Fund shareholders, and
the Funds intend to apply to the Internal Revenue Service for a private letter
ruling to that effect. The implementation of the restructuring will be
contingent upon the receipt of that private letter ruling or an opinion of
counsel to the same effect.
The Funds' Trustees believe that this restructuring is in the best
interests of Fund shareholders. Subject to receipt of the private letter ruling
or opinion of counsel described above, the Trustees will implement the
restructuring for each Fund if shareholders of that Fund and each other Fund
approve each of the proposals in Items 4 and 5 below. The proposal in Item 6
will permit the Trustees, subject to receiving exemptive relief from the
Securities and Exchange Commission, to hire new subadvisers for the New
Portfolios without Fund shareholder approval. The Trustees will implement the
restructuring whether or not Fund shareholders approve the proposals in this
Proxy Statement other than those in Items 4 and 5.
In the event that the proposals in Items 4 and 5 below do not receive
the requisite shareholder approval for any Fund, the Trustees will consider
possible alternatives, which might include resubmission of the proposals for
approval by shareholders of that Fund.
<PAGE>
ITEM 1. TO INSTRUCT CITICORP LIFE TO VOTE WITH RESPECT TO THE APPROVAL
OF A SUB-MANAGEMENT AGREEMENT BETWEEN MUTUAL MANAGEMENT CORP.
AND VARIABLE ANNUITY PORTFOLIOS WITH RESPECT TO CITISELECT VIP
FOLIOS 200-500.
ITEM 2. TO INSTRUCT CITICORP LIFE TO VOTE WITH RESPECT TO THE APPROVAL
OF A SUB-MANAGEMENT AGREEMENT BETWEEN SALOMON BROTHERS ASSET
MANAGEMENT LIMITED AND VARIABLE ANNUITY PORTFOLIOS WITH RESPECT
TO CITISELECT VIP FOLIOS 200-500.
ITEM 3. TO INSTRUCT CITICORP LIFE TO VOTE WITH RESPECT TO THE APPROVAL
OF A SUB-MANAGEMENT AGREEMENT BETWEEN SALOMON BROTHERS ASSET
MANAGEMENT INC AND VARIABLE ANNUITY PORTFOLIOS WITH RESPECT TO
CITISELECT VIP FOLIOS 200-500.
ONLY CONTRACT HOLDERS OF CITISELECT FOLIOS 200-500 SUBACCOUNTS ARE BEING
ASKED TO VOTE ON ITEMS 1 THROUGH 3.
Citibank, N.A. currently manages the assets of the CitiSelect VIP
Folios and provides administrative services to the Funds pursuant to separate
Management Agreements, each dated November 8, 1996. Subject to the terms of
each Management Agreement, Citibank is responsible for the investment
management of the applicable Fund, selects, subject to the review and approval
of the Board of Trustees of the Funds, subadvisers to make the investment
selections with respect to certain types of securities of the Fund consistent
with the guidelines and directions set by Citibank and the Board of Trustees,
and reviews each subadviser's continued performance.
Miller Anderson & Sherrerd, LLP served as subadviser for the large cap
value securities of CitiSelect VIP Folios 200-500 from the Funds' inception
through January 21, 1999. Since January 22, 1999, Mutual Management Corp.
(MMC), an affiliate of Citibank as described below, has managed the large cap
value securities of CitiSelect VIP Folios 200-500 that were previously managed
by Miller Anderson.
Pacific Investment Management Company (PIMCO) has served as subadviser
for the foreign government securities of CitiSelect VIP Folios 200-500 from the
Funds' inception. Commencing March 1, 1999, Salomon Brothers Asset Management
Limited (SBAM), also an affiliate of Citibank, will manage the foreign
government securities that are currently managed by PIMCO.
As noted, it is proposed that Salomon Brothers Asset Management Inc
(SBAMInc) be hired as subadviser for high yield securities, a new asset class
for the CitiSelect VIP Folios. SBAMInc is also an affiliate of Citibank.
SBAMInc, a Delaware corporation, maintains its principal business office at 7
<PAGE>
World Trade Center, New York, New York, 10048. SBAMInc currently is not
managing any Fund assets.
MMC, a Delaware corporation, maintains its principal office at 388
Greenwich Street, New York, New York 10013. MMC currently manages the large cap
value securities of CitiSelect VIP Folios 200-500 on an interim basis, with
approval of the Funds' Board of Trustees. Approval of the shareholders of the
Funds is necessary for MMC to continue to serve as subadviser. If Item 1 is
approved, MMC will continue to be responsible for the daily management of the
large cap value securities of CitiSelect VIP Folios 200-500.
SBAM, a limited liability private company formed and domiciled in
England and Wales, maintains its principal office at 111 Buckingham Palace
Road, London, England. SBAM is a U.S. registered investment adviser. Commencing
March 1, 1999, SBAM will manage the foreign government securities of CitiSelect
VIP Folios 200-500 on an interim basis, with approval of the Funds' Board of
Trustees. Approval of the shareholders of the Funds is necessary for SBAM to
continue to serve as subadviser. If Item 2 is approved, SBAM will continue to
be responsible for the daily management of the foreign government securities of
CitiSelect VIP Folios 200-500.
The Board of Trustees terminated the Funds' Sub-Management Agreements
with Miller Anderson and PIMCO upon Citibank's recommendations. These
recommendations were based on Citibank's evaluation of the services provided by
these subadvisers, as well as the availability of appropriate asset management
capabilities and resources in its affiliates, MMC and SBAM.
In accordance with the requirements of the 1940 Act, each
Sub-Management Agreement must be approved by the shareholders of each of
CitiSelect VIP Folios 200-500. If the proposed restructuring takes place, MMC,
SBAM and SBAMInc will serve as subadvisers to the New Portfolios representing
the large cap value, foreign government and high yield asset classes,
respectively.
THE SUB-MANAGEMENT AGREEMENTS
If the Sub-Management Agreements with MMC and SBAM are approved by the
required shareholders of CitiSelect VIP Folios 200-500, as described herein,
MMC and SBAM will continue to serve as subadvisers to each of CitiSelect VIP
Folios 200-500. Similarly, if the Sub-Management Agreement with SBAMInc is
approved by the required shareholders of CitiSelect VIP Folios 200-500, as
described herein, SBAMInc will serve as subadviser to each of CitiSelect VIP
Folios 200-500. Each Sub-Management Agreement, if approved by "a majority of
the outstanding voting securities" (as defined under "Vote Required" below) of
the applicable Fund, 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. Each Sub-Management Agreement may be terminated at any time
without the payment of any penalty by the Board of Trustees of the Funds or by
<PAGE>
"a majority of the outstanding voting securities" of the applicable Fund or by
Citibank. Each Sub-Management Agreement may also be terminated by the
applicable subadviser upon 90 days' advance written notice to Citibank. Each
Sub-Management Agreement will also terminate automatically in the event of its
"assignment" (as defined in the 1940 Act).
Under each Sub-Management Agreement, MMC, SBAM or SBAMInc, as
appropriate, will furnish continuing portfolio management services with respect
to the large cap value, foreign government or high yield securities of
CitiSelect VIP Folios 200-500, 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
the applicable Fund. Each subadviser will also provide Citibank with such
investment advice and reports and data as are requested by Citibank.
Each Sub-Management Agreement provides that the subadviser will be
responsible for providing Citibank with such investment advice and supervision
as Citibank may from time to time consider necessary for the proper supervision
of such portion of a Fund's assets as Citibank 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 the portfolio allocated by Citibank to the subadviser will be held
uninvested, subject always to the restrictions of the Funds' Declaration of
Trust, dated October 18, 1996, and By-laws, as each may be amended and restated
from time to time, the provisions of the 1940 Act, the then-current
Registration Statement with respect to the applicable Fund, and subject,
further, to the applicable subadviser notifying Citibank in advance of its
intention to purchase any securities except insofar as the requirement for such
notification may be waived or limited by Citibank; making recommendations to
Citibank as to the manner in which proxies, voting rights, rights to consent to
corporate action and any other rights pertaining to the Fund's portfolio
securities shall be exercised; and taking, on behalf of the Fund, all actions
which the subadviser deems necessary to implement the investment policies of
the Fund, and in particular placing all orders for the purchase or sale of
securities for the Fund's account with the brokers or dealers selected by it,
and to that end each subadviser is authorized as agent to give instructions to
the custodian and any subcustodian of the Fund as to deliveries of securities
and payments of cash for the account of the Fund.
The subadvisers are not liable for any error of judgment or mistake of
law or for any loss suffered by any of CitiSelect VIP Folios 200-500 in
connection with the matters to which the applicable Sub-Management Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence in the performance of their obligations and duties, or by reason of
reckless disregard of their obligations and duties under the applicable
Agreement.
Contract Holders should refer to Exhibits A, B and C attached hereto
for the complete terms of the Sub-Management Agreements with MMC, SBAM and
SBAMInc, respectively. The description of each Sub-Management Agreement set
<PAGE>
forth herein is qualified in its entirety by the provisions of the
Sub-Management Agreement as set forth in such Exhibits.
INVESTMENT ADVISORY FEES
Until the approval of the shareholders of the Funds is obtained for a
new MMC Sub-Management Agreement, applicable rules under the 1940 Act do not
permit MMC to be paid more than the compensation Miller Anderson would have
received under its Sub-Management Agreement with the Funds. The fees payable
under the Miller Anderson Sub-Management Agreement were accrued daily and
payable monthly and were equal to the percentages specified below of the
aggregate assets of the Funds allocated to Miller Anderson:
Fees Previously Payable to Miller Anderson
0.625% on the first $25 million;
0.375% on the next $75 million;
0.250% on the next $400 million; and
0.20% on assets in excess of $500 million.
Under the proposed new MMC Sub-Management Agreement, from and after
approval by the shareholders of the Funds, the Funds will pay MMC for its
services on the basis of the following annual fee schedule:
MMC Proposed Fee Schedule
0.65% on the first $10 million;
0.50% on the next $10 million;
0.40% on the next $10 million; and
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 Funds
allocated to MMC. Fees under the new MMC Sub-Management Agreement will be
higher than those that would have been payable to Miller Anderson; however, the
Funds' overall management fee will remain the same. To the extent that MMC's
fees are higher than those that would have been payable to Miller Anderson,
Citibank's management fee will go down by the same amount. As a result,
shareholders of the Funds will not be affected by the increase.
During the Funds' fiscal years ended December 31, 1998, Miller Anderson
received $__________ in advisory fees from the Funds. Had the proposed fees
under the new MMC Sub-Management Agreement been in effect during this period,
Miller Anderson would have received $____________ in advisory fees from the
Funds, or ____% of the fees that Miller Anderson actually received during this
period.
<PAGE>
Under the SBAM Sub-Management Agreement, the Funds will pay SBAM for
its services on the basis of the following annual fee schedule:
SBAM Fee Schedule
0.30% on the first $200 million;
0.25% on assets over $200 million
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 Funds
allocated to SBAM. These fees are the same as those that will be paid to SBAM
as interim subadviser to the Funds, commencing March 1, 1999. Fees under the
new SBAM Sub-Management Agreement will be lower than those that would have been
payable to PIMCO; however, the Funds' overall management fees paid by
shareholders of the Funds will remain the same. To the extent that SBAM's fees
are lower than those that would have been payable to PIMCO, Citibank's
management fee will increase by the same amount. As a result, shareholders of
the Funds will not be affected by the decrease.
During the Funds' fiscal years ended December 31, 1998, PIMCO received
$__________ in advisory fees from the Funds. Had the proposed fees under the
new SBAM Sub-Management Agreement been in effect during this period, PIMCO
would have received $____________ in advisory fees from the Funds, or ____% of
the fees that PIMCO actually received during this period.
Under the SBAMInc Sub-Management Agreement, the Funds will pay SBAMInc
for its services on the basis of the following annual fee schedule:
SBAMInc Fee Schedule
0.45% on the first $100 million;
0.40% on assets in excess of $100 million.
Fees will be accrued daily and payable monthly and will be at the
annual rates equal to the percentages specified above of the aggregate assets
of the Funds allocated to SBAMInc.
INFORMATION REGARDING MUTUAL MANAGEMENT CORP.
The following information regarding MMC has been provided by MMC.
MMC is a wholly-owned subsidiary of Salomon Smith Barney Holdings Inc,
which in turn is a wholly-owned subsidiary of Citigroup Inc. Citigroup
businesses produce a broad range of financial services - asset management,
banking and consumer finance, credit and charge cards, insurance, investments,
investment banking and trading - and use diverse channels to make them
available to consumers and corporate managers to numerous investment companies
having aggregate assets as of the date of this Proxy Statement in excess of
<PAGE>
$290 billion. Citigroup's principal business address is 153 East 53rd Street,
New York, New York 10043.
Frances A. Root will manage the large cap value securities of
CitiSelect VIP Folios 200-500 allocated to MMC. Ms. Root is a Director of MMC
and a Senior Portfolio Manager. She joined Smith Barney Capital Management in
1992. Formerly, she was with Shearson Lehman Advisors as a Vice President and
Portfolio Manager for seven years; and prior to that, with E.F. Hutton &
Company, Inc. She is a Chartered Financial Analyst and a member of The New York
Society of Security Analysts. Ms. Root holds a BA degree from Sweet Briar
College.
The following table sets forth certain information concerning the
principal executive officers and directors of MMC. The address of each of the
following persons is 388 Greenwich Street, New York, New York 10013.
_______________________________________________________________________________
NAME PRINCIPAL OCCUPATION
_______________________________________________________________________________
Heath B. McLendon Chairman, President and Chief
Executive Officer of MMC and
Managing Director of Salomon
Smith Barney
_______________________________________________________________________________
Lewis E. Daidone Director and Senior Vice President of
MMC; Managing Director of
Salomon Smith Barney and Senior
Vice President and Treasurer of
forty-one mutual funds sponsored by
Salomon Smith Barney
_______________________________________________________________________________
A. George Saks Director of MMC and Executive Vice
President of Salomon Smith Barney
_______________________________________________________________________________
Michael J. Day Treasurer of MMC and Managing
Director of Salomon Smith Barney
_______________________________________________________________________________
Christina T. Sydor General Counsel and Secretary of
MMC; Managing Director of
Salomon Smith Barney and
Secretary of the forty-one
investment companies sponsored by
Salomon Smith Barney
_______________________________________________________________________________
<PAGE>
The following table indicates the size of each investment company
advised by MMC with an investment objective that is similar to the objective of
above average total return consistent with reasonable risk and the advisory fee
rates of these investment companies.
_______________________________________________________________________________
NET ASSETS ON ANNUAL MANAGEMENT FEE
DECEMBER 31, 1998 PERCENT OF
FUND (IN THOUSANDS) AVERAGE NET ASSETS
_______________________________________________________________________________
_______________________________________________________________________________
OPEN-END FUND
_______________________________________________________________________________
Smith Barney Funds, Inc. $______ 0.60% to $500 million;
Large Cap Value Fund 0.55% next $500
million;
0.50% after $1 billion
_______________________________________________________________________________
_______________________________________________________________________________
VARIABLE ANNUITY FUNDS
_______________________________________________________________________________
Smith Barney Variable Account $13,779 0.60%
Funds
Income and Growth Portfolio
_______________________________________________________________________________
Travelers Series Fund, Inc. $464,936 0.65%
Smith Barney Large Cap Value
Portfolio
_______________________________________________________________________________
INFORMATION REGARDING SALOMON BROTHERS ASSET MANAGEMENT LIMITED
The following information regarding SBAM has been provided by SBAM.
SBAM is a limited liability private company formed and domiciled in
England and Wales. It is a wholly owned subsidiary of Salomon Brothers Europe
Limited, Victoria Plaza, 111 Buckingham Palace Road, London SWIS OSB. Salomon
Brothers Europe Limited is owned by two wholly owned subsidiaries of Salomon
Brothers Holding Company Inc (388 Greenwich Street, New York, New York 10013),
Salomon (International) Finance AG (Schipfe 2, P.O. Box 4406, Zurich,
Switzerland) and Salomon International Limited (Victoria Plaza, 111 Buckingham
Palace Road, London SWIS OSB). Salomon Brothers Holding Company Inc is wholly
owned by Salomon Smith Barney Holdings Inc, which in turn is a wholly owned
subsidiary of Citigroup Inc. Citigroup's businesses are described above.
__________ will manage the assets of Foreign Bond Portfolio allocated
to SBAM. __________ is a __________ of SBAM. __________ joined SBAM in
__________. Formerly, __________ was with __________ as __________ for
__________ years; and prior to that, with __________. __________ holds a degree
from __________.
<PAGE>
The following table sets forth certain information concerning the
principal executive officers and directors of SBAM. The address of each of the
following persons is Victoria Plaza, 111 Buckingham Palace Road, London SW1W
OSB, England.
_______________________________________________________________________________
NAME PRINCIPAL OCCUPATION
_______________________________________________________________________________
Vilas V. Gadkari Managing Director and Chief
Investment Officer of SBAM;
Managing Director of SBAMInc;
Managing Director of Salomon
Brothers Inc.; and Managing
Director Salomon Brothers
International Limited
_______________________________________________________________________________
David J. Scott Director of SBAM
_______________________________________________________________________________
David J. Griffiths Economist and Portfolio Manager of
SBAM
_______________________________________________________________________________
Karolos Haggipavlou Portfolio Manager of SBAM
_______________________________________________________________________________
The following table indicates the size of each investment company
advised by SBAM with an investment objective that is similar to the objective
of maximum total return consistent with preservation of capital and the
advisory fee rates of these investment companies.
_______________________________________________________________________________
ANNUAL MANAGEMENT FEE
NET ASSETS ON PERCENT OF
FUND DECEMBER 31, 1998 AVERAGE NET ASSETS
_______________________________________________________________________________
_______________________________________________________________________________
OPEN-END FUNDS
_______________________________________________________________________________
Salomon Brothers Global Bond $45,046,911 .375% to $50 million
Series of the JNL Series .35% next $100 million
Trust .30% next $350 million
.25% over $500 million
_______________________________________________________________________________
Salomon Brothers Investment $117,747,606 .75%
Series - Strategic Bond Fund
<PAGE>
_______________________________________________________________________________
Strategic Bond Opportunity $95,200,414 .35% to $50 million
Series of the American .30% next $150 million
Growth Series .25% next $300 million
.10% over $500 million
_______________________________________________________________________________
Strategic Bond Trust for the $441,725,216 .35% to $50 million
NASL Series .30% next $150 million
.25% next $300 million
.20% over $500 million
_______________________________________________________________________________
Strategic Income Fund of the $79,754,865 .35% to $50 million
North American Funds Series .30% next $150 million
.25% next $300 million
.20% over $500 million
_______________________________________________________________________________
_______________________________________________________________________________
VARIABLE ANNUITY FUND
_______________________________________________________________________________
Salomon Brothers Variable $10,390,056 .75%
Series Fund
_______________________________________________________________________________
_______________________________________________________________________________
INFORMATION REGARDING SALOMON BROTHERS ASSET MANAGEMENT INC
The following information regarding SBAMInc has been provided by
SBAMInc.
SBAMInc is a wholly owned subsidiary of Salomon Brothers Holding
Company Inc. Salomon Brothers Holding Company Inc is wholly owned by Salomon
Smith Barney Holdings Inc, which in turn is a wholly owned subsidiary of
Citigroup Inc. Citigroup's businesses are described above.
__________ will manage the assets of High Yield Portfolio allocated to
SBAMInc. __________ is a __________ of SBAMInc. __________ joined SBAMInc in
__________. Formerly, __________ was with __________ as __________ for
__________ years; and prior to that, with __________. __________ holds a degree
from __________.
<PAGE>
The following table sets forth certain information concerning the
principal executive officers and directors of SBAMInc. The address of each of
the following persons other than Mr. Gadkari is 7 World Trade Center, New York,
New York, 10048. Mr. Gadkari's address is Victoria Plaza, 111 Buckingham Palace
Road, London SW1W OSB, England
_______________________________________________________________________________
NAME PRINCIPAL OCCUPATION
_______________________________________________________________________________
Vilas V. Gadkari Managing Director of SBAMInc;
Managing Director and Chief
Investment Officer of SBAM;
Managing Director of Salomon
Brothers Inc; and Managing Director
Salomon Brothers International
Limited
_______________________________________________________________________________
Mitchel E. Schulman Chief Operating Officer - Portfolios,
SBAMInc
_______________________________________________________________________________
Marcus A. Peckman Vice President and Chief Financial
Officer of SBAMInc
_______________________________________________________________________________
Michael F. Rosenbaum Chief Legal Officer of SBAMInc
_______________________________________________________________________________
Thomas W. Jasper Treasurer of SBAMInc
_______________________________________________________________________________
Andrew W. Alter Assistant Secretary of SBAMInc
_______________________________________________________________________________
Howard M. Darmstadter Assistant Secretary of SBAMInc
_______________________________________________________________________________
The following table indicates the size of each investment company
advised by SBAMInc with an investment objective that is similar to the
objective of a high level of current income or the objective of capital
appreciation and the advisory fee rates of these investment companies.
_______________________________________________________________________________
ANNUAL MANAGEMENT
NET ASSETS ON FEE
DECEMBER 31, PERCENT OF
FUND 1998 AVERAGE NET ASSETS
_______________________________________________________________________________
_______________________________________________________________________________
Salomon Brothers Series Funds $569,771,993 .75%
Inc
Salomon Brothers High Yield
Bond Fund
_______________________________________________________________________________
Salomon Brothers Variable Series $7,189,550 .75%
Funds Inc
Salomon Brothers Variable
High Yield Bond Fund
_______________________________________________________________________________
Salomon Brothers Institutional $41,418,579 .50%
Series Funds Inc
Salomon Brothers Institutional
High Yield Bond Fund
_______________________________________________________________________________
Salomon Brothers High Income $62,153,198 .70%*
Fund Inc
_______________________________________________________________________________
Salomon Brothers High Income $881,476,410 1.00%*
Fund II Inc
_______________________________________________________________________________
Salomon Brothers/JNL Global $52,040,000 .375% first $50 million
Bond Series, an investment .350% next $100 million
portfolio of JNL Series Trust .300% next $350 million
.250% over $500
million**
_______________________________________________________________________________
Heritage High Yield Bond Fund, $54,365,000 .50%**+
an investment portfolio of
Heritage Income Trust
_______________________________________________________________________________
_________________________
* With respect to this fund the investment advisory or management fee is a
percentage of average weekly net assets.
** With respect to this fund, SBAMInc serves as subadviser and, accordingly,
the sponsoring investment adviser pays SBAMInc a portion of the total
advisory fee.
+ Amount paid is a percentage of the annual investment advisory fee paid to
the manager, without regard to any reduction in the fees paid to the
manager as a result of any limitation of the fund's expenses.
THE EVALUATION BY THE BOARD OF TRUSTEES
At a meeting on February 5, 1999 the Trustees of the Funds considered
information with respect to whether each proposed Sub-Management Agreement was
in the best interests of CitiSelect VIP Folios 200-500 and their shareholders.
The Board of Trustees considered, among other factors, representations by each
subadviser regarding the nature and quality of services provided or to be
<PAGE>
provided by the subadviser, and information regarding fees, expense ratios and
performance. In evaluating each subadviser's ability to provide services to the
Funds, the Trustees considered information as to the subadviser's business
organization, financial resources and personnel. The Board of Trustees also
considered the conflicts of interest inherent in Citibank's recommendation that
its affiliates be hired as subadvisers.
The Board of Trustees also considered that under circumstances in which
best price and execution may be obtained from more than one broker or dealer,
each subadviser may, in its discretion, purchase and sell securities through
dealers who provide research, statistical and other information to the
subadviser. Although certain research, market and statistical information from
brokers and dealers can be useful to the Funds and subadviser, each subadviser
has advised that such information is, in its opinion, only supplementary to the
subadviser's own research activities and the information must still be
analyzed, weighed and reviewed by the subadviser. It was noted that such
information may be useful to the subadvisers in providing services to clients
other than CitiSelect VIP Folios 200-500. Conversely, it was noted that
information provided to the subadvisers by brokers and dealers through whom
other clients of the subadvisers effect securities transactions may be useful
to the subadvisers in providing services to these Funds.
Based upon its review, the Board of Trustees of the Funds concluded
that each of the Sub-Management Agreements is reasonable, fair and in the best
interests of each of CitiSelect VIP Folios 200-500 and their respective
shareholders, and that the fees provided in each of the Sub-Management
Agreements 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 Funds, including all of the
Independent Trustees, unanimously approved each of the Sub-Management
Agreements and voted to recommend their approval by the shareholders of each of
CitiSelect VIP Folios 200-500.
VOTE REQUIRED
Approval of a Sub-Management Agreement with respect to a Fund will
require the approval of "a majority of the outstanding voting securities" of
that Fund. This requires approval by the holders of 67% or more of the
outstanding voting securities of the Fund which are present at the Meeting if
the holders of more than 50% of such voting securities are present in person or
by proxy, or more than 50% of the outstanding voting securities of the Fund,
whichever is less.
In the event that a Sub-Management Agreement does not receive the
requisite approval, Citibank would (a) manage all of the assets of the
applicable Fund 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.
<PAGE>
THE BOARD OF DIRECTORS OF CITICORP LIFE UNANIMOUSLY RECOMMENDS THAT
CONTRACT HOLDERS OF EACH SUBACCOUNT AND THEIR PARTICIPANTS VOTE FOR APPROVAL OF
THE SUB-MANAGEMENT AGREEMENT WITH MMC, FOR APPROVAL OF THE SUB-MANAGEMENT
AGREEMENT WITH SBAM AND FOR APPROVAL OF THE SUB-MANAGEMENT AGREeMENT WITH
SBAMINC.
ITEM 4. TO INSTRUCT CITICORP LIFE TO VOTE ON AN AMENDMENT TO THE
TRUST'S DECLARATION OF TRUST TO ALLOW THE ASSETS OF EACH FUND
TO BE INVESTED IN ONE OR MORE INVESTMENT COMPANIES TO THE
EXTENT NOT PROHIBITED BY THE 1940 ACT.
It is proposed that the Funds' Declaration of Trust be amended to
permit the Funds to invest in other investment companies to the extent not
prohibited by the 1940 Act.
The Funds' Declaration of Trust presently permits each Fund to invest
all of its investable assets in a single investment company that is registered
under the 1940 Act. As described above, recent amendments to the 1940 Act
permit mutual funds to invest their investable assets in multiple registered
investment companies so long as certain conditions are met. There also may be
additional amendments to the 1940 Act in the future which affect mutual funds'
ability to invest in other funds.
The proposed amendments to the Funds' Declaration of Trust which appear
below will allow the Funds to take advantage of the recent changes in law, as
well as future changes in law or regulation on this topic. These amendments
will also permit the Funds to enter into the proposed restructuring described
under "General Background" above. The Funds' Board of Trustees believes that
these amendments will be to the Funds' advantage and are in the best interests
of the shareholders of each Fund. See "General Background" above. It is
proposed that Section 3.2(c) of the Declaration of Trust be amended by deleting
the words below that have been marked through [bracketed for filing purposes]
and adding the italicized words [[double brackets for filing purposes]]:
(c) Notwithstanding any other provision of this Declaration to
the contrary, the Trustees shall have the power in their discretion
without any requirement of approval by shareholders to either invest
all or a portion of the Trust Property, or sell all or a portion of
such Trust Property and invest the proceeds of such sales, in [another
investment company that is registered under the 1940 Act] [[one or more
investment companies to the extent not prohibited by the 1940 Act and
exemptive orders granted under such Act]].
Under the Declaration of Trust, the 1940 Act is defined to include both
that Act itself and the rules and regulations under that Act; the amendment
would be based on that definition.
<PAGE>
VOTE REQUIRED
Approval of the amendment to the Declaration of Trust with respect to
each Fund will require the approval of "a majority of the outstanding voting
securities" (as defined under "Vote Required" in Items 1, 2 and 3 above) of
that Fund.
THE BOARD OF DIRECTORS OF CITICORP LIFE UNANIMOUSLY RECOMMENDS THAT
CONTRACT HOLDERS OF EACH SUBACCOUNT AND THEIR PARTICIPANTS VOTE FOR APPROVAL OF
THE PROPOSED AMENDMENT TO THE DECLARATION OF TRUST.
ITEM 5. TO INSTRUCT CITICORP LIFE TO VOTE WITH RESPECT TO THE
APPROVAL OF AN AMENDMENT TO THE FUNDAMENTAL INVESTMENT
POLICIES OF EACH FUND TO ALLOW THE ASSETS OF THAT FUND TO BE
INVESTED IN ONE OR MORE INVESTMENT COMPANIES TO THE EXTENT
NOT PROHIBITED BY THE 1940 ACT.
Each Fund has adopted certain fundamental investment restrictions
which, as a matter of law, cannot be changed without the approval of the
shareholders of the Funds. Certain of these fundamental investment restrictions
currently permit each Fund to invest its investable assets in a single
investment company having the same investment objectives and policies and
substantially the same investment restrictions as that Fund. As noted above,
recent amendments to the 1940 Act permit mutual funds to invest their
investable assets in multiple investment companies so long as certain
conditions are met. There may be future amendments to the 1940 Act affecting
mutual funds' ability to invest in other funds.
In order to take advantage of the flexibility of current and future
applicable law and regulation and to permit the Funds to enter into the
restructuring, it is proposed that each of the fundamental investment
restrictions listed in Exhibit D be amended as indicated in that Exhibit.
Contract Holders also should review Item 7 for additional proposed changes to
these investment restrictions.
VOTE REQUIRED
Because the investment restrictions in Exhibit D are fundamental
policies of each Fund, approval of this proposal with respect to a Fund will
require the approval of "a majority of the outstanding voting securities" (as
defined under "Vote Required" in Items 1, 2 and 3 above) of that Fund.
THE BOARD OF DIRECTORS OF CITICORP LIFE UNANIMOUSLY RECOMMENDS THAT
CONTRACT HOLDERS OF EACH SUBACCOUNT AND THEIR PARTICIPANTS VOTE FOR APPROVAL OF
THE PROPOSED AMENDMENT TO THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES, TO ALlOW
<PAGE>
THE ASSETS OF EACH FUND TO BE INVESTED IN ONE OR MORE INVESTMENT COMPANIES TO
THE EXTENT NOT PROHIBITED BY THE 1940 ACT.
ITEM 6. TO INSTRUCT CITICORP LIFE TO VOTE ON AUTHORIZING THE
TRUSTEES OF THE FUNDS TO SELECT AND CHANGE INVESTMENT
SUBADVISERS AND ENTER INTO INVESTMENT SUBADVISORY AGREEMENTS
WITHOUT OBTAINING THE APPROVAL OF SHAREHOLDERS.
As discussed above, Citibank currently employs subadvisers for the
CitiSelect VIP Folios to perform the daily management of particular asset
classes. See "General Background." Citibank monitors and supervises the
activities of the subadvisers, and may terminate the services of any subadviser
at any time. However, retaining the services of a new subadviser, and retaining
the services of a replacement subadviser for longer than an interim period,
currently require the approval of the shareholders of the Funds.
Citibank itself currently manages the assets of CitiFunds Small Cap
Growth VIP Portfolio, but Citibank may decide in the future that it may
maximize the Fund's chances of achieving its investment objective if one or
more subadvisers are hired. Retaining the services of a subadviser, and
replacing that subadviser, would require the approval of the shareholders of
the Funds.
The 1940 Act requires that all contracts pursuant to which persons
serve as investment advisers to investment companies be approved by
shareholders. This requirement would apply to the appointment of a new or
replacement subadviser to any Fund. (There is an exception to this requirement
that permits, under certain circumstances, entities to serve as replacement
investment advisers or subadvisers for an interim period without the approval
of the shareholders of the fund if their contracts have been approved by fund
directors or trustees. MMC and SBAM are or will be serving as subadvisers to
the CitiSelect VIP Folios pursuant to this exception.) This requirement also
would apply to the appointment of a new or replacement subadviser to any New
Portfolio following the proposed restructuring and the organization of that New
Portfolio. Absent exemptive relief from the Securities and Exchange Commission,
investors in a New Portfolio (i.e., Funds) would be asked to approve the
advisory contract for the new subadviser. The Funds would then seek approval of
the contract from their shareholders. The Securities and Exchange Commission
has previously granted conditional exemptions from these voting requirements.
If the Funds were to obtain similar exemptive relief and this proposed Item 6
is approved, the Board of Trustees would be able, without further approval of
the shareholders of the Funds, to appoint additional or replacement
subadvisers. The Trustees would not, however, be able to replace Citibank as
investment manager without complying with the 1940 Act and applicable
regulations governing the approval of advisory contracts by the shareholders of
the Funds.
<PAGE>
This Item 6 is intended to facilitate the efficient supervision and
management of the CitiSelect VIP Folios' subadvisers by Citibank and the
Trustees, and to give Citibank flexibility in managing CitiFunds Small Cap
Growth VIP Portfolio in the future. Citibank continuously monitors the
performance of the subadvisers and, as is evidenced by Items 1 through 3 of
this Proxy Statement, may from time to time recommend that the Board of
Trustees replace one or more subadvisers or appoint additional subadvisers,
depending on Citibank's assessment of what combination of subadvisers it
believes will optimize each Fund's chances of achieving its investment
objective. As Items 1 through 3 show, Citibank currently is required to obtain
the approval of the shareholders of the Funds to add or replace a subadviser.
If the Funds were to obtain exemptive relief and the shareholders of the Funds
were to approve this proposed Item 6, the Trustees would no longer be required
to call a Fund meeting of the shareholders of the Funds each time a new
subadviser is appointed.
These meetings entail substantial costs which could diminish the
benefits of the current subadvisory arrangements. These costs must be weighed
against the benefits of scrutiny of the shareholders of the Funds of proposed
contracts with additional or replacement subadvisers. However, even in the
absence of approval of the shareholders of the Funds, any proposal to add or
replace subadvisers would receive careful review. First, Citibank would assess
a Fund's needs and, if it believed additional or replacement subadvisers could
benefit the Fund, would search for available investment subadvisers. Second,
any recommendations made by Citibank would have to be approved by a majority of
the Trustees, including a majority of the Trustees who are not "interested
persons" within the meaning of the 1940 Act. In selecting any new or
replacement subadvisers, the Trustees are required to determine that an
investment management agreement with the subadviser is reasonable, fair and in
the best interests of a fund and its shareholders, and that the fees provided
in the agreement are fair and reasonable in light of the usual and customary
charges made by others for services of the same nature and quality. Finally,
any further appointments of additional or replacement subadvisers would have to
comply with any conditions contained in the Securities and Exchange Commission
exemptive order, if such order is granted.
The Trustees believe that the proposed authority to select and change
investment subadvisers and enter into investment subadvisory agreements without
obtaining the approval of the shareholders of the Funds is in the best
interests of the shareholders of each Fund.
VOTE REQUIRED
Approval of this proposal with respect to a Fund will require the
approval of "a majority of the outstanding securities" (as defined under "Vote
Required" in Items 1, 2 and 3 above) of that Fund.
THE BOARD OF DIRECTORS OF CITICORP LIFE UNANIMOUSLY RECOMMENDS THAT
CONTRACT HOLDERS OF EACH SUBACCOUNT AND THEIR PARTICIPANTS VOTE FOR AUTHORIZING
<PAGE>
THE TRUSTEES OF THE TRUST TO SELECT AND CHANGE INVESTMENT SUBADVISERS AND ENTER
INTO INVESTMENT SUBADVISORY AGREEMENTS WITHOUT OBTAINING THE APPROVAL OF
SHAREHOLDERS OF THE FUNDS.
ITEM 7. TO INSTRUCT CITICORP LIFE TO VOTE ON AN AMENDMENT TO THE
FUNDAMENTAL INVESTMENT POLICIES OF EACH FUND CONCERNING THAT
FUND'S ABILITY TO MAKE LOANS TO OTHER PERSONS AND TO BUY OR
SELL FUTURES CONTRACTS AND OPTIONS ON FUTURES.
As noted above in Item 5, each Fund has adopted certain fundamental
investment restrictions which, as a matter of law, cannot be changed without
the approval of shareholders of the Funds. One of these fundamental investment
restrictions concerns each Fund's ability to make loans to other persons. The
Funds are proposing a technical amendment to this restriction to clarify that
the purchase of fixed time deposits would not be a violation of this
restriction.
Certain other of the Funds' fundamental investment restrictions could
be construed to limit the Funds' ability to buy or sell futures contracts and
options on futures. The Funds are proposing technical amendments to these
restrictions to clarify this point. The proposed amendments will clarify that
each Fund's ability to buy or sell futures contracts and options on futures is
consistent with that described in that Fund's prospectus.
CitiSelect VIP Folios 200-500 are proposing to delete language
concerning collateral arrangements with respect to futures contracts and
options on futures from their fundamental investment restriction concerning the
issuance of senior securities. The Funds believe that this language is not
required as a matter of law, and adds nothing to the investment restriction
which does not already appear therein. Even though the language will be deleted
from the investment restrictions, the Funds will continue to provide collateral
with respect to options, futures contracts and options on futures contracts to
the extent required by applicable rules and regulations.
To give effect to these technical amendments, it is proposed that each
of the fundamental investment restrictions listed in Exhibit E be amended as
indicated in that Exhibit. Contract Holders should note that Exhibit E assumes
that Item 5 has been approved.
The Trustees believe that these proposed amendments to the fundamental
investment policies are in the best interests of the shareholders of each Fund.
<PAGE>
VOTE REQUIRED
Because the investment restrictions in Exhibit E are fundamental
policies of each Fund, approval of this proposal with respect to a Fund will
require the approval of "a majority of the outstanding securities" (as defined
under "Vote Required" in Items 1, 2 and 3 above) of that Fund.
THE BOARD OF DIRECTORS OF CITICORP LIFE UNANIMOUSLY RECOMMENDS THAT
CONTRACT HOLDERS OF EACH SUBACCOUNT AND THEIR PARTICIPANTS VOTE FOR APPROVAL OF
THE PROPOSED AMENDMENT TO THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES CONCERNING
THE FUNDS' ABILITY TO MAKE LOANS TO OTHER PERSONS AND TO BUY OR SELL FUTURES
CONTRACTS AND OPTIONS ON FUTURES.
ITEM 8. TO INSTRUCT CITICORP LIFE TO ELECT HEATH B. MCLENDON AS A
TRUSTEE OF THE FUNDS.
The Funds are proposing that Heath B. McLendon be elected as a Trustee
of the Funds, to hold office until his successors are chosen and qualified. Mr.
McLendon, Chairman, President and Chief Executive Officer of Mutual Management
Corp., the Citibank affiliate whose Sub-Management Agreement is being submitted
for approval in Item 1, was appointed by the Board in February, 1999 and
currently serves as a Trustee. Mr. McLendon has not been elected by the
shareholders of the Funds. The remaining Trustees were previously elected by
the shareholders of the Funds. Mr. McLendon will continue to serve as a Trustee
whether or not shareholders of the CitiSelect VIP Folios approve Item 1.
The following information shows the Trustees and the executive officers
of the Funds and their principal occupations which, unless otherwise specified,
are of more than five years duration, although the titles held may have varied
during that period. Each Trustee and officer is also a Trustee or officer of
certain other funds for which CFBDS, Inc., the Funds' distributor, or an
affiliate, serves as the distributor or for which Citibank serves as investment
adviser. Asterisks indicate those Trustees and officers who are "interested
persons," as defined in the 1940 Act, of the Funds.
TRUSTEES OF THE TRUST
ELLIOTT J. BERV (aged 55) - Trustee (since November 1996); Chairman and
Director, Catalyst, Inc. (Management Consultants) (since June 1992); President,
Chief Operating Officer and Director, Deven International, Inc. (International
Consultants) (June 1991 to June 1992); President and Director, Elliott J. Berv
& Associates (Management Consultants) (since May 1984).
PHILIP W. COOLIDGE* (aged 47) -- Trustee (since November 1996); President of
the Funds; Chief Executive Officer and President, Signature Financial Group,
Inc. and CFBDS.
<PAGE>
MARK T. FINN (aged 55) -- Trustee (since November 1996); President and
Director, Delta Financial, Inc. (since June 1983); Chairman of the Board and
Chief Executive Officer, FX 500 Ltd. (Commodity Trading Advisory Firm) (since
April 1990); General Partner and Shareholder, Greenwich Ventures LLC
(Investment Partnership) (since January 1996); President and Secretary, Phoenix
Trading Co. (Commodity Trading Advisory Firm) (since March 1997); Director,
Vantage Consulting Group, Inc. (since October 1988).
RILEY C. GILLEY (aged 72) -- Trustee (since November 1996); Vice President and
General Counsel, Corporate Property Investors (November 1988 to December 1991);
Partner, Breed, Abbott & Morgan (Attorneys) (retired, December 1987).
DIANA R. HARRINGTON (aged 58) -- Trustee (since November 1996); Professor,
Babson College (since September 1993); Visiting Professor, Kellogg Graduate
School of Management, Northwestern University (September 1992 to September
1993); Professor, Darden Graduate School of Business, University of Virginia
(September 1978 to September 1993); Trustee, the Highland Family of Funds
(March 1997 to March 1998).
SUSAN B. KERLEY (aged 47) -- Trustee (since November 1996); President, Global
Research Associates, Inc. (Investment Research) (since August 1990); Manager,
Rockefeller & Co. (March 1988 to July 1990); Trustee, Mainstay Institutional
Funds (since December 1990).
HEATH B. MCLENDON* (aged 65) - Trustee (since February 1999); Chairman,
President and Chief Executive Officer of Mutual Management Corp. (since ___);
Managing Director of Salomon Smith Barney (since ___).
C. OSCAR MORONG, JR. (aged 63) -- Trustee (since November 1996); Managing
Director, Morong Capital Management (since February 1993); Senior Vice
President and Investment Manager, CREF Investments, Teachers Insurance &
Annuity Association (retired January 1993); Director, Indonesia Fund; Director,
MAS Funds.
WALTER E. ROBB, III (aged 72) -- Trustee (since November 1996); President,
Benchmark Consulting Group, Inc. (since 1991); Principal, Robb Associates
(Corporate Financial Advisors) (since 1978); President, Benchmark Advisors,
Inc. (Corporate Financial Advisors) (since 1989); Trustee of certain registered
investment companies in the MFS Family of Funds.
<PAGE>
E. KIRBY WARREN (aged 64) -- Trustee (since November 1996); Professor of
Management, Graduate School of Business, Columbia University (since 1987);
Samuel Bronfman Professor of Democratic Business Enterprise (1978 to 1987).
WILLIAM S. WOODS, JR. (aged 78) -- Trustee (since November 1996); Vice
President-Investments, Sun Company, Inc. (retired, April 1984).
OFFICERS OF THE TRUST
PHILIP W. COOLIDGE* (aged 47) -- President of the Funds (since October 1996);
Chief Executive Officer and President, Signature Financial Group, Inc. and
CFBDS.
CHRISTINE A. DRAPEAU* (aged 28) -- Assistant Secretary and Assistant Treasurer
of the Funds (since October 1996); Vice President, Signature Financial Group,
Inc. (since January 1996); Paralegal and Compliance Officer, various financial
companies (July 1992 to January 1996).
TAMIE EBANKS-CUNNINGHAM* (aged 26) -- Assistant Secretary of the Funds (since
January 1998); Office Manager, Signature Financial Group, (Grand Cayman)
Limited (Since April 1995); Administrator, Cayman Islands Primary School (prior
to April 1995).
JOHN R. ELDER* (aged 50) -- Treasurer of the Funds (since October 1996); Vice
President, Signature Financial Group, Inc. (since April 1995); Assistant
Treasurer, CFBDS (since April 1995); Treasurer, the Phoenix Family of Mutual
Funds (Phoenix Home Life Mutual Insurance Company) (1983 to March 1995).
LINDA T. GIBSON* (aged 33) -- Secretary of the Funds (since October 1996);
Senior Vice President, Signature Financial Group, Inc.; Secretary, CFBDS.
JAMES E. HOOLAHAN* (aged 51) -- Vice President, Assistant Secretary and
Assistant Treasurer of the Funds (since October 1996); Senior Vice President,
Signature Financial Group, Inc.
SUSAN JAKUBOSKI* (aged 34) -- Vice President, Assistant Secretary and Assistant
Treasurer of the Funds (since October 1996); Vice President, Signature
Financial Group (Cayman) Ltd. (since August 1994); Fund Compliance
Administrator, Concord Financial Group (November 1990 to August 1994).
MOLLY S. MUGLER* (aged 47) -- Assistant Secretary and Assistant Treasurer of
the Funds (since October 1996); Vice President, Signature Financial Group,
Inc.; Assistant Secretary, CFBDS.
<PAGE>
CLAIR TOMALIN* (aged 30) -- Assistant Secretary of the Funds (since January
1998); Office Manager, Signature Financial Group (Europe) Limited.
SHARON M. WHITSON* (aged 50) -- Assistant Secretary and Assistant Treasurer of
the Funds (since October 1996); Assistant Vice President, Signature Financial
Group, Inc.
JULIE J. WYETZNER* (aged 39) -- Vice President, Assistant Secretary and
Assistant Treasurer of the Funds (since October 1996); Vice President,
Signature Financial Group, Inc.
Trustees who serve on the boards of investment companies in the
CitiFunds family of funds are compensated for their services on a complex-wide
basis. Only those Trustees who are not affiliated with the Funds' distributor
or Citibank receive compensation from the CitiFunds (including the Funds). The
following table shows the compensation paid to the Trustees by the Funds and
the other CitiFunds during the fiscal years ended December 31, 1998.
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
The Funds' Trustees received the following remuneration from the Funds
as a whole during their fiscal year ended December 31, 1998:
<S> <C> <C> <C> <C>
PENSION OR TOTAL
RETIREMENT COMPENSATION
BENEFITS ESTIMATED FROM
AGGREGATE ACCRUED ANNUAL REGISTRANT
NAME OF COMPENSATION AS PART OF BENEFITS AND FUND
PERSON, FROM FUND UPON COMPLEX PAID
POSITION REGISTRANT (1) EXPENSES RETIREMENT TO TRUSTEES (1)
Elliott J. Berv $3,409.27 None None $53,750.00
Philip W.
Coolidge None None None None
Mark T. Finn $3,389.53 None None $52,000.00
Riley C. Gilley $3,384.44 None None $41,500.00
Diana R.
Harrington $3,545.56 None None $59,000.00
Susan B. Kerley $3,513.95 None None $55,000.00
C. Oscar Morong,
Jr. $3,669.31 None None $71,000.00
Walter E. Robb,
III $3,395.04 None None $50,000.00
E. Kirby Warren $3,483.71 None None $49,000.00
William S.
Woods, Jr. $3,484.86 None None $54,000.00
</TABLE>
______________________
(1) Information relates to the fiscal years ended December 31, 1998.
Messrs. Berv, Coolidge, Finn, Gilley, Morong, Robb, Warren and Woods and
Mses. Harrington and Kerley are trustees of 27, 49, 26, 33, 40, 30, 40, 26,
28 and 28 funds, respectively, in the family of open-end registered
investment companies advised or managed by Citibank.
The Board of Trustees met _____ times during the period commencing
January 1, 1998 and ending December 31, 1998. The Board has created a standing
Audit Committee, currently comprised of Ms. Kerley and Messrs. Gilley, Warren
and Woods, none of whom is an "interested person," as defined in the 1940 Act,
of the Funds or their administrator or distributor or of Citibank. The Audit
Committee met _____ times during the period commencing January 1, 1998 and
ending December 31, 1998 to review the internal and external accounting
procedures of the Funds and, among other things, to consider the selection of
independent certified public accountants for the Funds, to approve all
significant services proposed to be performed by its independent certified
public accountants and to consider the possible effect of such services on
their independence. The Board has also created a standing Performance & Review
Committee, currently comprised of Ms. Harrington and Messrs. Berv, Finn and
Robb, none of whom is an "interested person" of the Funds or their
<PAGE>
administrator or distributor or of Citibank. The Performance & Review Committee
met _____ times during the period commencing January 1, 1998 and ending
December 31, 1998. Each Trustee attended at least 75% of all Board and
applicable committee meetings.
The Funds' Declaration of Trust provides that they will indemnify their
Trustees and officers against all liabilities and expenses incurred or paid in
connection with litigation in which they may be involved because of their
offices with the Funds, unless, with respect to liability to shareholders of
the Funds, it is finally adjudicated that they engaged in willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of their offices, or unless with respect to any other matter it is
finally adjudicated that they did not act in good faith in the reasonable
belief that their actions were in the best interest of the Funds. In the case
of settlement, such indemnification will not be provided unless it has been
determined by a court or other body approving the settlement or other
disposition, or by a reasonable determination, based upon a review of readily
available facts, by vote of a majority of disinterested Trustees or in a
written opinion of independent counsel, that such Trustees or officers have not
engaged in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their offices.
VOTE REQUIRED
Election of Mr. McLendon as a Trustee will require approval by the
holders of a majority of the outstanding securities of the Funds, taken
together as a single class, which are present at the Meeting in person or by
proxy.
THE BOARD OF DIRECTORS OF CITICORP LIFE UNANIMOUSLY RECOMMENDS THAT
CONTRACT HOLDERS OF EACH SUBACCOUNT AND THEIR PARTICIPANTS VOTE FOR THE
ELECTION OF HEATH B. MCLENDON AS A TRUSTEE OF THE FUNDS.
ITEM 9. TO INSTRUCT CITICORP LIFE TO VOTE ON THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS FOR EACH FUND.
It is intended that proxies cast by each Fund's shareholders not
limited to the contrary will be voted in favor of ratifying the selection, by a
majority of the Trustees of the Funds who are not "interested persons" (as that
term is defined in the 1940 Act) of the Funds, of PricewaterhouseCoopers LLP
under Section 32(a) of the 1940 Act as independent public accountants, to
certify every financial statement of each Fund required by any law or
regulation to be certified by independent public accountants and filed with the
Securities and Exchange Commission in respect of all or any part of the fiscal
year of the Fund ending December 31, 1999. PricewaterhouseCoopers LLP has no
direct or material indirect interest in any Fund.
<PAGE>
PricewaterhouseCoopers LLP has served as the Funds' independent
certified public accountants since their commencement of operations, providing
audit services and consultation with respect to the preparation of filings with
the Securities and Exchange Commission.
Representatives of PricewaterhouseCoopers LLP [are expected to be
present at the Meeting and are expected to be available to respond to
appropriate questions. Representatives of PricewaterhouseCoopers LLP are
expected to have the opportunity to make a statement if they desire to do so.]
VOTE REQUIRED
Approval of this proposal with respect to a Fund will require approval
by the holders of a majority of the outstanding securities of that Fund which
are present at the Meeting in person or by proxy.
THE BOARD OF DIRECTORS OF CITICORP LIFE UNANIMOUSLY RECOMMENDS THAT
CONTRACT HOLDERS OF EACH SUBACCOUNT AND THEIR PARTICIPANTS VOTE FOR APPROVAL OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR EACH
FUND.
ITEM 10. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE SPECIAL MEETING OF CONTRACT HOLDERS AND ANY
ADJOURNMENTS THEREOF.
The management of Citicorp Life 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.
INTERESTS OF CERTAIN PERSONS
As of __________ __, 1999, no Director or officer of Citicorp Life
owned beneficially or had the right to vote any outstanding unit interests of
the Subaccounts.
As of __________ __, 1999, Citicorp Life owned of record _____% of the
outstanding unit interests of the Subaccounts.
ADDITIONAL INFORMATION
Each Subaccount is a subaccount of Citicorp Life Variable Annuity
Separate Account, which is registered with the Securities and Exchange
Commission as a unit investment trust under the Investment Company Act of 1940.
The Citicorp Life Variable Annuity Separate Account was established by Citicorp
Life as a separate account on July 6, 1994. The mailing address of Citicorp
<PAGE>
Life Variable Annuity Separate Account is 800 Silver Lake Boulevard, P.O.
Box7031, Dover, Delaware 19903.
The cost of soliciting proxies in the accompanying form, which is
expected to be approximately $____________, including the fees of a proxy
soliciting agent, will be borne by Citibank. In addition to solicitation by
mail, proxies may be solicited by the Board of Directors, officers, and regular
employees and agents of the Citicorp Life without compensation therefor.
Citibank may reimburse brokerage firms and others for their expenses in
forwarding proxy materials to the beneficial owners and soliciting them to
execute the proxies.
The distributor of the Contracts is CFBDS, Inc., 21 Milk Street,
Boston, Massachusetts 02109. State Street Bank and Trust Company acts as
transfer agent, dividend disbursing agent and custodian for each Fund. The
principal business address of State Street is 225 Franklin Street, Boston,
Massachusetts 02110.
SUBMISSION OF CERTAIN PROPOSALS
Variable Annuity Portfolios is a Massachusetts business trust and as
such is not required to hold annual meetings of shareholders, although special
meetings may be called for purposes such as electing Trustees or removing
Trustees, changing fundamental policies, or approving an advisory contract.
Contract Holder proposals to be presented at any subsequent meeting of Contract
Holders must be received by Citicorp Life at its office within a reasonable
time before the proxy solicitation is made.
YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY
PROMPTLY.
By Order of the Board of Directors,
[Name]
[Title]
February 17, 1999
<PAGE>
EXHIBIT A
SUB-MANAGEMENT AGREEMENT
VARIABLE ANNUITY PORTFOLIOS
SUB-MANAGEMENT AGREEMENT, dated as of January 22, 1999, by and between
Variable Annuity Portfolios, a Massachusetts business trust (the "Trust"), and
Mutual Management Corp., a Delaware corporation (the "Subadviser").
W I T N E S S E T H:
WHEREAS, Citibank, N.A. (the "Manager") has been retained by the Trust
to act as investment adviser to the Trust with respect to the series of the
Trust designated as CitiSelect(R) VIP Folio 200, CitiSelect(R) VIP Folio 300,
CitiSelect(R) VIP Folio 400 and CitiSelect(R) VIP Folio 500 (each individually
a "Fund" and collectively the "Funds"), 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 has requested that the Trust engage the Subadviser
to provide certain investment advisory services for the Funds, and the
Subadviser is willing to provide such investment advisory services for the
Funds 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 Trust hereby appoints the Subadviser to act as subadviser with
respect to each of the Funds 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 Funds for the compensation provided by
this Agreement.
2. Duties of the Subadviser. The Subadviser shall provide the Funds and
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 Fund's investment assets as the Manager may designate from time to time.
Notwithstanding any provision of this Agreement, the Manager shall retain all
<PAGE>
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 Fund allocated by the Manager to the Subadviser shall be
held uninvested, subject always to the restrictions of the Trust's Declaration
of Trust, dated October 25, 1996, 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 Fund, 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 Fund and what portion, if
any, of the assets of a Fund 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 Fund'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 Fund 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.
The Subadviser shall take, on behalf of each Fund, 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 Fund'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 Fund as to deliveries
of securities and payments of cash for the account of that Fund. 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 Fund 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 Fund
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
<PAGE>
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
Fund to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Fund. In making purchases or
sales of securities or other property for the account of a Fund, 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 Fund all of its own expenses allocable to that Fund including, without
limitation, organization costs of the Fund; 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 shares of beneficial interests and
servicing shareholder accounts; expenses of preparing, typesetting, printing
and mailing shareholder reports, notices, proxy statements and reports to
governmental officers and commissions and to shareholders in the Fund; expenses
connected with the execution, recording and settlement of security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of the Fund (including but not limited to the fees of independent pricing
services); expenses of meetings of the Fund's shareholders; expenses relating
to the issuance of shares of beneficial interests in the Fund; 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 Fund may
be a party and the legal obligation which the Trust may have to indemnify its
Trustees and officers with respect thereto.
4. Compensation of the Subadviser. For the services to be rendered by
the Subadviser hereunder, the Trust shall pay to the Subadviser from the assets
of the Funds pro rata 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 Funds allocated to the Subadviser:
<PAGE>
0.65% on the first $10 million;
0.50% on the next $10 million;
0.40% on the next $10 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.
If in any fiscal year the aggregate expenses of a Fund 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 Fund
and any fund investing its assets therein, the Trust 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.
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 Fund, except as permitted by
the 1940 Act, will not take a long or short position in shares of beneficial
interests of a Fund 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 Fund 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 Fund, 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 Manager 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
Funds are not to be deemed to be exclusive, the Subadviser being free to render
<PAGE>
investment advisory and/or other services to others, including accounts or
investment management companies with similar or identical investment objectives
to the Funds. It is understood that Trustees, officers, and shareholders 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 a shareholder 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 January 22, 2001, on which date it will terminate unless
its continuance after January 22, 2001 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 Fund.
This Agreement may be terminated as to any Fund 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 Fund, 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 Fund at any time without the
payment of any penalty by the Subadviser on not less than 90 days' written
notice to the Trust and the Manager. This Agreement shall automatically
terminate in the event of its "assignment." Termination of this Agreement as to
any Fund shall not terminate this Agreement as it applies to the remaining
Funds.
This Agreement constitutes the entire agreement between the parties and
may be amended as to any Fund only if such amendment is approved by the
Subadviser and the "vote of a majority of the outstanding voting securities" of
that Fund (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 Fund shall not, without more, amend such
term with respect to any other Fund.
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.
<PAGE>
Each party acknowledges and agrees that all obligations of the Trust
under this Agreement are binding only with respect to the particular Fund to
which a particular obligation relates; that any liability of the Trust under
this Agreement, or in connection with the transactions contemplated herein,
shall be discharged only out of the assets of the particular Fund to which a
particular obligation relates; and that no other Fund or other series of the
Trust shall be liable with respect to this Agreement or in connection with the
transactions contemplated herein.
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, and the obligations of this Agreement are not binding upon any of
the Trustees, officers or shareholders of the Trust individually.
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.
10. Override Provisions. Notwithstanding any other provision of this
Agreement, prior to this Agreement being approved by investors in the Funds in
accordance with the 1940 Act, in no event shall the compensation paid to the
Subadviser hereunder exceed the amount permitted by Rule 15a-4 under the 1940
Act.
<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.
VARIABLE ANNUITY PORTFOLIOS MUTUAL MANAGEMENT
on behalf of CitiSelect(R) VIP Folio 200, CORP.
CitiSelect(R) VIP Folio 300, CitiSelect(R)
VIP Folio 400 and CitiSelect(R) VIP
Folio 500
By:______________________________ By:______________________
Title:___________________________ Title:___________________
The foregoing is acknowledged:
Citibank, N.A.
By:______________________________
Title:___________________________
<PAGE>
EXHIBIT B
SUB-MANAGEMENT AGREEMENT
VARIABLE ANNUITY PORTFOLIOS
SUB-MANAGEMENT AGREEMENT, dated as of March 1, 1999, by and between
Variable Annuity Portfolios, a Massachusetts business trust (the "Trust"), and
Salomon Brothers Asset Management Limited, a British limited liability private
corporation (the "Subadviser").
W I T N E S S E T H:
WHEREAS, Citibank, N.A. (the "Manager") has been retained by the Trust
to act as investment adviser to the Trust with respect to the series of the
Trust designated as CitiSelect(R) VIP Folio 200, CitiSelect(R) VIP Folio 300,
CitiSeLect(R) VIP Folio 400 and CitiSelect(R) VIP Folio 500 (each individually
a "Fund" and collectively the "Funds"), 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 has requested that the Trust engage the Subadviser
to provide certain investment advisory services for the Funds, and the
Subadviser is willing to provide such investment advisory services for the
Funds 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 Trust hereby appoints the Subadviser to act as subadviser with
respect to each of the Funds 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 Funds for the compensation provided by
this Agreement.
2. Duties of the Subadviser. The Subadviser shall provide the Funds and
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
<PAGE>
each Fund'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 Fund allocated by the Manager to the Subadviser shall be
held uninvested, subject always to the restrictions of the Trust's Declaration
of Trust, dated October 18, 1996, and By-laws, as each may be amended and
restated 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 Fund, 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 Fund and what portion, if any, of the assets of a Fund 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 Fund'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 Fund 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.
The Subadviser shall take, on behalf of each Fund, 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 Fund'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 Fund as to deliveries
of securities and payments of cash for the account of that Fund. 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 Fund 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 Fund
<PAGE>
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
Fund to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Fund. In making purchases or
sales of securities or other property for the account of a Fund, 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 Fund all of its own expenses allocable to that Fund including, without
limitation, organization costs of the Fund; 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 shares of beneficial interests and
servicing shareholder accounts; expenses of preparing, typesetting, printing
and mailing shareholder reports, notices, proxy statements and reports to
governmental officers and commissions and to shareholders in the Fund; expenses
connected with the execution, recording and settlement of security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of the Fund (including but not limited to the fees of independent pricing
services); expenses of meetings of the Fund's shareholders; expenses relating
to the issuance of shares of beneficial interests in the Fund; 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 Fund may
be a party and the legal obligation which the Trust may have to indemnify its
Trustees and officers with respect thereto.
4. Compensation of the Subadviser. For the services to be rendered by
the Subadviser hereunder, the Trust shall pay to the Subadviser from the assets
of the Funds pro rata an investment subadvisory fee, accrued daily and paid
<PAGE>
monthly, at an annual rate equal to the percentages specified below of the
aggregate assets of all Funds allocated to the Subadviser:
0.30% on the first $200 million;
0.25% on assets over $200 million.
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.
If in any fiscal year the aggregate expenses of a Fund 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 Fund
and any fund investing its assets therein, the Trust 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.
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 Fund, except as permitted by
the 1940 Act, will not take a long or short position in shares of beneficial
interests of a Fund 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 Fund 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 Fund, 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 Manager 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.
<PAGE>
7. Activities of the Subadviser. The services of the Subadviser to the
Funds 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 Funds. It is understood that Trustees, officers, and shareholders 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 a shareholder 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 March 1, 2001, on which date it will terminate unless its
continuance after March 1, 2001 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 Fund.
This Agreement may be terminated as to any Fund 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 Fund, 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 Fund at any time without the
payment of any penalty by the Subadviser on not less than 90 days' written
notice to the Trust and the Manager. This Agreement shall automatically
terminate in the event of its "assignment." Termination of this Agreement as to
any Fund shall not terminate this Agreement as it applies to the remaining
Funds.
This Agreement constitutes the entire agreement between the parties and
may be amended as to any Fund only if such amendment is approved by the
Subadviser and the "vote of a majority of the outstanding voting securities" of
that Fund (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 Fund shall not, without more, amend such
term with respect to any other Fund.
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.
<PAGE>
Each party acknowledges and agrees that all obligations of the Trust
under this Agreement are binding only with respect to the particular Fund to
which a particular obligation relates; that any liability of the Trust under
this Agreement, or in connection with the transactions contemplated herein,
shall be discharged only out of the assets of the particular Fund to which a
particular obligation relates; and that no other Fund or other series of the
Trust shall be liable with respect to this Agreement or in connection with the
transactions contemplated herein.
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, and the obligations of this Agreement are not binding upon any of
the Trustees, officers or shareholders of the Trust individually.
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.
VARIABLE ANNUITY PORTFOLIOS SALOMON BROTHERS ASSET
on behalf of CitiSelect(R) VIP Folio 200, MANAGEMENT LIMITED
CitiSelect(R) VIP Folio 300, CitiSelect(R)
VIP Folio 400 and CitiSelect(R) VIP
Folio 500
By:_______________________________ By:__________________________
Title:____________________________ Title:_______________________
The foregoing is acknowledged:
Citibank, N.A.
By:_______________________________
Title:____________________________
<PAGE>
EXHIBIT C
SUB-MANAGEMENT AGREEMENT
VARIABLE ANNUITY PORTFOLIOS
SUB-MANAGEMENT AGREEMENT, dated as of ______________, 1999, by and
between Variable Annuity Portfolios, a Massachusetts business trust (the
"Trust"), and Salomon Brothers Asset Management Inc, a Delaware corporation
(the "Subadviser").
W I T N E S S E T H:
WHEREAS, Citibank, N.A. (the "Manager") has been retained by the Trust
to act as investment adviser to the Trust with respect to the series of the
Trust designated as CitiSelect(R) VIP Folio 200, CitiSelect(R) VIP Folio 300,
CitiSeLect(R) VIP Folio 400 and CitiSelect(R) VIP Folio 500 (each individually
a "Fund" and collectively the "Funds"), 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 has requested that the Trust engage the Subadviser
to provide certain investment advisory services for the Funds, and the
Subadviser is willing to provide such investment advisory services for the
Funds 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 Trust hereby appoints the Subadviser to act as subadviser with
respect to each of the Funds 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 Funds for the compensation provided by
this Agreement.
2. Duties of the Subadviser. The Subadviser shall provide the Funds and
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
<PAGE>
each Fund'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 Fund allocated by the Manager to the Subadviser shall be
held uninvested, subject always to the restrictions of the Trust's Declaration
of Trust, dated October 18, 1996, and By-laws, as each may be amended and
restated 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 Fund, 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 Fund and what portion, if any, of the assets of a Fund 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 Fund'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 Fund 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.
The Subadviser shall take, on behalf of each Fund, 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 Fund'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 Fund as to deliveries
of securities and payments of cash for the account of that Fund. 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 Fund 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 Fund
<PAGE>
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
Fund to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Fund. In making purchases or
sales of securities or other property for the account of a Fund, 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 Fund all of its own expenses allocable to that Fund including, without
limitation, organization costs of the Fund; 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 shares of beneficial interests and
servicing shareholder accounts; expenses of preparing, typesetting, printing
and mailing shareholder reports, notices, proxy statements and reports to
governmental officers and commissions and to shareholders in the Fund; expenses
connected with the execution, recording and settlement of security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of the Fund (including but not limited to the fees of independent pricing
services); expenses of meetings of the Fund's shareholders; expenses relating
to the issuance of shares of beneficial interests in the Fund; 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 Fund may
be a party and the legal obligation which the Trust may have to indemnify its
Trustees and officers with respect thereto.
4. Compensation of the Subadviser. For the services to be rendered by
the Subadviser hereunder, the Trust shall pay to the Subadviser from the assets
of the Funds pro rata an investment subadvisory fee, accrued daily and paid
<PAGE>
monthly, at an annual rate equal to the percentages specified below of the
aggregate assets of all Funds allocated to the Subadviser:
0.45% on the first $100 million;
0.40% on assets in excess of $100 million
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.
If in any fiscal year the aggregate expenses of a Fund 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 Fund
and any fund investing its assets therein, the Trust 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.
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 Fund, except as permitted by
the 1940 Act, will not take a long or short position in shares of beneficial
interests of a Fund 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 Fund 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 Fund, 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 Manager 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.
<PAGE>
7. Activities of the Subadviser. The services of the Subadviser to the
Funds 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 Funds. It is understood that Trustees, officers, and shareholders 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 a shareholder 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 ____________, 2001, on which date it will terminate
unless its continuance after ____________, 2001 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 Fund.
This Agreement may be terminated as to any Fund 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 Fund, 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 Fund at any time without the
payment of any penalty by the Subadviser on not less than 90 days' written
notice to the Trust and the Manager. This Agreement shall automatically
terminate in the event of its "assignment." Termination of this Agreement as to
any Fund shall not terminate this Agreement as it applies to the remaining
Funds.
This Agreement constitutes the entire agreement between the parties and
may be amended as to any Fund only if such amendment is approved by the
Subadviser and the "vote of a majority of the outstanding voting securities" of
that Fund (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 Fund shall not, without more, amend such
term with respect to any other Fund.
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.
<PAGE>
Each party acknowledges and agrees that all obligations of the Trust
under this Agreement are binding only with respect to the particular Fund to
which a particular obligation relates; that any liability of the Trust under
this Agreement, or in connection with the transactions contemplated herein,
shall be discharged only out of the assets of the particular Fund to which a
particular obligation relates; and that no other Fund or other series of the
Trust shall be liable with respect to this Agreement or in connection with the
transactions contemplated herein.
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, and the obligations of this Agreement are not binding upon any of
the Trustees, officers or shareholders of the Trust individually.
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.
VARIABLE ANNUITY PORTFOLIOS SALOMON BROTHERS ASSET
on behalf of CitiSelect(R) VIP Folio 200, MANAGEMENT INC
CitiSelect(R) VIP Folio 300, CitiSelect(R)
VIP Folio 400 and CitiSelect(R) VIP
Folio 500
By:_______________________________ By:__________________________
Title:____________________________ Title:_______________________
The foregoing is acknowledged:
Citibank, N.A.
By:_______________________________
Title:____________________________
<PAGE>
EXHIBIT D
Deleted text is marked through [bracketed for filing purposes] and added text
appears in italics [[double brackets for filing purposes]].
FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED TO BE
AMENDED UNDER ITEM 5.
(3) Purchase securities of any issuer if such purchase at the time
thereof would cause with respect to 75% of the total assets of the Fund
more than 10% of the voting securities of such issuer to be held by the
Fund, except that the Fund may invest all or substantially all of its
[investable] assets in [another registered investment company having
the same investment objective and policies and substantially the same
investment restrictions as those with respect to the Fund (a
"Qualifying Portfolio").] [[one or more investment companies, to the
extent not prohibited by the 1940 Act, the rules and regulations
thereunder, and exemptive orders granted under such Act.]]
(4) Purchase securities of any issuer if such purchase at the time
thereof would cause as to 75% of the Fund's total assets more than 5%
of the Fund's assets (taken at market value) to be invested in the
securities of such issuer (other than securities or obligations issued
or guaranteed by the United States, any state or political subdivision
thereof, or any political subdivision of any state, or any agency or
instrumentality of the United States or of any state or of any
political subdivision of any state), except that the Fund may invest
all or substantially all of its [investable] assets in [a Qualifying
Portfolio.] [[one or more investment companies, to the extent not
prohibited by the 1940 Act, the rules and regulations thereunder, and
exemptive orders granted under such Act.]]
(6) Underwrite securities issued by other persons, except that all the
assets of the Fund may be invested in [a Qualifying Portfolio] [[one or
more investment companies, to the extent not prohibited by the 1940
Act, the rules and regulations thereunder, and exemptive orders granted
under such Act,]] and except insofar as the Fund may technically by
deemed an underwriter under the Securities Act in selling a security.
<PAGE>
EXHIBIT E
Deleted text is marked through [bracketed for filing purposes] and added text
appears in italics [[double brackets for filing purposes]].
FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED TO BE
AMENDED UNDER ITEM 7.
(1) Borrow money, except that as a temporary measure for extraordinary
or emergency purposes it may borrow in an amount not to exceed 1/3 of
the current value of its net assets, including the amount borrowed
[(nor] [[; or]] purchase any securities at any time at which borrowings
exceed 5% of the total assets of the Fund, taken at market value[)]. It
is intended that the Fund would borrow money only from banks and only
to accommodate requests for the repurchase of shares of the Fund while
effecting an orderly liquidation of portfolio securities.
(2) Make loans to other persons except (a) through the lending of its
portfolio securities and provided that any such loans not exceed 30% of
the Fund's total assets (taken at market value), (b) through the use of
repurchase agreements, [[fixed time deposits]] or the purchase of
short-term obligations or (c) by purchasing all or a portion of an
issue of debt securities of types commonly distributed privately to
financial institutions. The purchase of short-term commercial paper or
a portion of an issue of debt securities which is part of an issue to
the public shall not be considered the making of a loan.
(3) Purchase securities of any issuer if such purchase at the time
thereof would cause with respect to 75% of the total assets of the Fund
more than 10% of the voting securities of such issuer to be held by the
Fund[, except] [[; provided that, for purposes of this restriction, the
issuer of an option or futures contract shall not be deemed to be the
issuer of the security or securities underlying such contract; and
provided further]] that the Fund may invest all or any portion of its
assets in one or more investment companies, to the extent not
prohibited by the 1940 Act, the rules and regulations thereunder, and
exemptive orders granted under such Act.
(4) Purchase securities of any issuer if such purchase at the time
thereof would cause as to 75% of the Fund's total assets more than 5%
of the Fund's assets (taken at market value) to be invested in the
securities of such issuer (other than securities or obligations issued
or guaranteed by the United States, any state or political subdivision
thereof, or any political subdivision of any such state, or any agency
or instrumentality of the United States or of any state or of any
<PAGE>
political subdivision of any state)[, except] [[; provided that, for
purposes of this restriction, the issuer of an option or futures
contract shall not be deemed to be the issuer of the security or
securities underlying such contract; and provided further]] that the
Fund may invest all or any portion of its assets in one or more
investment companies, to the extent not prohibited by the 1940 Act, the
rules and regulations thereunder, and exemptive orders granted under
such Act.
(5) Concentrate its investments in any particular industry, but if it
is deemed appropriate for the achievement of the Fund's investment
objective, up to 25% of its assets, at market value at the time of each
investment, may be invested in any one industry[[, except that
positions in futures contracts shall not be subject to this
restriction]].
(6) Underwrite securities issued by other persons,
except that all or any portion of the assets of the Fund may be
invested in one or more investment companies, to the extent not
prohibited by the 1940 Act, the rules and regulations thereunder, and
exemptive orders granted under such Act, and except insofar as the Fund
may technically be deemed an underwriter under the Securities Act in
selling a security.
(7) Purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests
therein), interests in oil, gas or mineral leases, commodities or
commodity contracts in the ordinary course of business ([the Fund]
[[the foregoing shall not be deemed to preclude the Fund from
purchasing or selling futures contracts or options thereon, and the
Fund]] reserves the freedom of action to hold and to sell real estate
acquired as a result of the ownership of securities by the Fund).
For CitiFunds Small Cap Growth VIP Portfolio only:
(8) Issue any senior security (as that term is defined in the 1940 Act)
if such issuance is specifically prohibited by the 1940 Act or the
rules and regulations promulgated thereunder[, except as appropriate to
evidence a debt incurred without violating Investment Restriction (1)
above].
For CitiSelect VIP Folios 200-500 only:
(8) Issue any senior security (as that term is defined in the 1940 Act)
if such issuance is specifically prohibited by the 1940 Act or the
rules and regulations promulgated thereunder[, provided that collateral
arrangements with respect to options, futures contracts, and options on
futures contracts, including deposits of initial and variation margin,
are not considered to be the issuance of a senior security for purposes
of this restriction and except as appropriate to evidence a debt
incurred without violating Investment Restriction (1) above].
<PAGE>
APPENDIX
PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
PROXY CARD PROXY CARD
CITISELECT(R) VIP FOLIO 200 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 300 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 400 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 500 SUBACCOUNT AND
CITIFUNDSSM SMALL CAP GROWTH VIP PORTFOLIO
SUBACCOUNT
OF
CITICORP LIFE VARIABLE ANNUITY SEPARATE ACCOUNT,
A SEPARATE ACCOUNT OF CITICORP LIFE INSURANCE COMPANY
A PROXY FOR A SPECIAL MEETING
OF CONTRACT HOLDERS TO BE HELD APRIL 9, 1999
The undersigned owner of a variable annuity contract issued by Citicorp
Life Insurance Company (Citicorp Life) with unit interests in CitiSelect(R) VIP
Folio 200 Subaccount, CitiSelect(R) VIP Folio 300 Subaccount, CitiSelect(R) VIP
Folio 400 Subaccount, CitiSelect(R) VIP Folio 500 Subaccount or CitiFundsSM
Small Cap Growth VIP Portfolio Subaccount, a subaccount of Citicorp Life
Variable Annuity Separate Account, revoking all Proxies heretofore given,
hereby appoints each of ______________ and ______________, or any of them, as
Proxies of the undersigned with full power of substitution, to vote on behalf
of all of the undersigned all unit interests (Units) in the Subaccounts which
the undersigned is entitled to vote at the Special Meeting of Contract Holders
to be held at Citicorp Center, 153 East 53rd Street, 14th Floor, New York, New
York, on Friday, April 9, 1999 at 9:00 a.m., Eastern 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 DIRECTORS OF CITICORP LIFE.
THE BOARD OF DIRECTORS OF CITICORP LIFE RECoMMENDS A VOTE FOR THE FOLLOWING
PROPOSALS.
<PAGE>
1. To instruct Citicorp Life to vote with respect to the approval of a
Sub-Management Agreement between Mutual Management Corp. and Variable
Annuity Portfolios with respect to CitiSelect VIP Folios 200-500
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
2. To instruct Citicorp Life to vote with respect to the approval of a
Sub-Management Agreement between Salomon Brothers Asset Management
Limited and Variable Annuity Portfolios with respect to CitiSelect VIP
Folios 200-500
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
3. To instruct Citicorp Life to vote with respect to the approval of a
Sub-Management Agreement between Salomon Brothers Asset Management Inc
and Variable Annuity Portfolios with respect to CitiSelect VIP Folios
200-500
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
4. To instruct Citicorp Life to vote with respect to approval of an
amendment to the Funds' Declaration of Trust to allow the assets of
each Fund to be invested in one or more investment companies to the
extent not prohibited by the Investment Company Act of 1940, the rules
and regulations thereunder, and exemptive orders granted under such Act
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiFundsSM Small Cap
Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
5. To instruct Citicorp Life to vote with respect to the approval of an
amendment to the fundamental investment policies of each Fund to allow
the assets of that Fund to be invested in one or more investment
companies to the extent not prohibited by the 1940 Act
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiFundsSM Small Cap
Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
6. To instruct Citicorp Life to vote on authorizing the Trustees of the
Funds to select and change investment subadvisers and enter into
investment subadvisory agreements without obtaining the approval of
shareholders
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiFundsSM Small Cap
Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
7. To instruct Citicorp Life to vote on an amendment to the fundamental
investment policies of each Fund concerning that Fund's ability to make
loans to other persons and to buy or sell futures contracts and options
on futures
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiFundsSM Small Cap
Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
8. To instruct Citicorp Life to elect Heath B. McLendon as a Trustee of
the Funds
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct Citicorp Life to vote my Units in CitiFundsSM Small Cap
Growth VIP Portfolio Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
<PAGE>
9. To instruct Citicorp Life to vote on the selection of
PricewaterhouseCoopers LLP as the independent certified public
accountants for each Fund
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiFundsSM Small Cap
Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
THE UNIT INTERESTS REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR TO INSTRUCT
CITICORP LIFE TO VOTE 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.
Date:_______________
-----------------------------------
Signature of Contract Holder
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD
When signing as attorney, executor, administrator, trustee, guardian or as
custodian for a minor, please sign your name and give your full title as such.
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. Joint owners
should each sign this proxy. Please sign, date and return in the enclosed
envelope.
<PAGE>
BALLOT BALLOT
CITISELECT(R) VIP FOLIO 200 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 300 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 400 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 500 SUBACCOUNT AND
CITIFUNDSSM SMALL CAP GROWTH VIP PORTFOLIO
SUBACCOUNT
OF
CITICORP LIFE VARIABLE ANNUITY SEPARATE ACCOUNT
A SEPARATE ACCOUNT OF CITICORP LIFE INSURANCE COMPANY
INSTRUCTIONS FOR A SPECIAL MEETING
OF CONTRACT HOLDERS TO BE HELD APRIL 9, 1999
The undersigned, a participant in a Variable Annuity Contract issued by
Citicorp Life Insurance Company (Citicorp Life), revoking all Proxies
heretofore given, hereby instructs the holder of the Contract (known as the
Contract Holder) to vote its unit interests (Units) in CitiSelect(R) VIP Folio
200 Subaccount, CitiSelect(R) VIP Folio 300 Subaccount, CitiSeLect(R) VIP Folio
400 Subaccount, CitiSelect(R) VIP Folio 500 Subaccount and CitiFundsSM Small
CaP Growth VIP Portfolio Subaccount, each a Subaccount of the Citicorp Life
Variable Annuity Separate Account, which are attributable to the undersigned's
participation in the Contract and which the Contract Holder is entitled to vote
at the Special Meeting of Contract Holders of the Subaccount to be held at
Citicorp Center, 153 East 53rd Street, 14th Floor, New York, New York at 9:00
a.m., Eastern time, and at any adjournment thereof, as fully as the undersigned
would be entitled to vote if personally present, as follows:
INSTRUCTIONS SOLICITED ON BEHALF OF THE CONTRACT HOLDER.
THE BOARD OF DIRECTORS OF CITICORP LIFE RECoMMENDS A VOTE FOR THE FOLLOWING
PROPOSALS.
1. To instruct Citicorp Life to vote with respect to the approval of a
Sub-Management Agreement between Mutual Management Corp. and Variable
Annuity Portfolios with respect to CitiSelect VIP Folios 200-500
<PAGE>
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
2. To instruct Citicorp Life to vote with respect to the approval of a
Sub-Management Agreement between Salomon Brothers Asset Management
Limited and Variable Annuity Portfolios with respect to CitiSelect VIP
Folios 200-500
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
3. To instruct Citicorp Life to vote with respect to the approval of a
Sub-Management Agreement between Salomon Brothers Asset Management Inc
and Variable Annuity Portfolios with respect to CitiSelect VIP Folios
200-500
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
4. To instruct Citicorp Life to vote with respect to approval of an
amendment to the Funds' Declaration of Trust to allow the assets of
each Fund to be invested in one or more investment companies to the
extent not prohibited by the Investment Company Act of 1940, the rules
and regulations thereunder, and exemptive orders granted under such Act
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiFundsSM Small Cap
Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
5. To instruct Citicorp Life to vote with respect to the approval of an
amendment to the fundamental investment policies of each Fund to allow
the assets of that Fund to be invested in one or more investment
companies to the extent not prohibited by the 1940 Act
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiFundsSM Small Cap
Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
6. To instruct Citicorp Life to vote on authorizing the Trustees of the
Funds to select and change investment subadvisers and enter into
investment subadvisory agreements without obtaining the approval of
shareholders
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiFundsSM Small Cap
Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
7. To instruct Citicorp Life to vote on an amendment to the fundamental
investment policies of each Fund concerning that Fund's ability to make
loans to other persons and to buy or sell futures contracts and options
on futures
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiFundsSM Small Cap
Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
8. To instruct Citicorp Life to elect Heath B. McLendon as a Trustee of
the Funds
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct Citicorp Life to vote my Units in CitiFundsSM Small Cap
Growth VIP Portfolio Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
<PAGE>
9. To instruct Citicorp Life to vote on the selection of
PricewaterhouseCoopers LLP as the independent certified public
accountants for each Fund
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 200
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 300
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 400
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiSelect(R)VIP Folio 500
Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct Citicorp Life to vote my Units in CitiFundsSM Small Cap
Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
THE UNIT INTERESTS ATTRIBUTABLE TO THE UNDERSIGNED'S PARTICIPATION IN THE
VARIABLE ANNUITY CONTRACT WILL BE VOTED AS INDICATED OR VOTEd TO INSTRUCT
CITICORP LIFE TO VOTE FOR ANY PROPOSALS FOR WHICH NO CHOICE IS INDICATED.
THE CONTRACT HOLDER IS INSTRUCTED IN ITS DISCRETION TO VOTE UPON SUCH OTHER
MATTERS AS MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Date:_______________
-----------------------------------
Signature of Participant
-----------------------------------
Signature of joint owner, if any
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD
<PAGE>
When signing as attorney, executor, administrator, trustee, guardian or as
custodian for a minor, please sign your name and give your full title as such.
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. Joint owners
should each sign this proxy. Please sign, date and return in the enclosed
envelope.
<PAGE>
PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
FIRST CITICORP LIFE INSURANCE COMPANY
666 Fifth Avenue
3rd Floor
New York, New York 10103
February 17, 1999
Dear Contract Holder:
The accompanying materials relate to a Special Meeting of Contract
Holders of Variable Annuity Contracts issued by First Citicorp Life Insurance
Company (First Citicorp Life) with unit interests in CitiSelect(R) VIP Folio
200 Subaccount, CitiSelect(R) VIP Folio 300 Subaccount, CitiSelect(R) VIP Folio
400 Subaccount, CitiSelect(R) VIP Folio 500 Subaccount and CitiFundsSM Small
Cap Growth VIP Portfolio Subaccount of First Citicorp Life Variable Annuity
Separate Account, which invest all of their investable assets in corresponding
series of Variable Annuity Portfolios (these series are known as the Funds).
The Meeting will be held on Friday, April 9, 1999 at 9:00 a.m., Eastern time.
YOUR PARTICIPATION AT THIS MEETING IS VERY IMPORTANT IN ORDER TO
ACCOMPLISH PROPOSED ACTIONS THAT THE BOARD OF DIRECTORS OF FIRST CITICORP LIFE
INSURANCE COMPANY HAS DETERMINED ARE FAIR AND REASONABLE AND IN YOUR BEST
INTERESTS.
If you cannot attend the Meeting, you may participate by proxy. As a
Contract Holder, you cast one vote for each $100 of dollar value of units that
you own. By separate mailing you will obtain instructions from affected
contract participants on how to vote your units. Please take a few moments to
read the enclosed materials and then cast your vote on the enclosed proxy card
in accordance with the instructions you receive from your contract participant.
VOTING TAKES ONLY A FEW MINUTES. EACH CONTRACT HOLDER'S VOTE IS
IMPORTANT. YOUR PROMPT RESPONSE WILL BE MUCH APPRECIATED.
The proposals you will vote on for the Subaccounts are summarized
below. Complete information is contained in the enclosed Proxy Statement.
ITEM 1. To instruct First Citicorp Life to vote with respect to
the approval of a Sub-Management Agreement between Mutual
Management Corp. and Variable Annuity Portfolios with respect
to CitiSelect VIP Folios 200-500.
ITEM 2. To instruct First Citicorp Life to vote with respect to
the approval of a Sub-Management Agreement between Salomon
<PAGE>
Brothers Asset Management Limited and Variable Annuity
Portfolios with respect to CitiSelect VIP Folios 200-500.
ITEM 3. To instruct First Citicorp Life to vote with respect to
the approval of a Sub-Management Agreement between Salomon
Brothers Asset Management Inc and Variable Annuity Portfolios
with respect to CitiSelect VIP Folios 200-500.
ITEM 4. To instruct First Citicorp Life to vote with respect to
approval of an amendment to the Funds' Declaration of Trust
to allow the assets of each Fund to be invested in one or
more investment companies to the extent not prohibited by the
Investment Company Act of 1940, the rules and regulations
thereunder, and exemptive orders granted under such Act.
ITEM 5. To instruct First Citicorp Life to vote with respect to
the approval of an amendment to the fundamental investment
policies of each Fund to allow the assets of that Fund to be
invested in one or more investment companies to the extent
not prohibited by the 1940 Act.
ITEM 6. To instruct First Citicorp Life to vote on authorizing the
Trustees of the Funds to select and change investment
subadvisers and enter into investment subadvisory agreements
without obtaining the approval of shareholders.
ITEM 7. To instruct First Citicorp Life to vote on an amendment to
the fundamental investment policies of each Fund concerning
that Fund's ability to make loans to other persons and to buy
or sell futures contracts and options on futures.
ITEM 8. To instruct First Citicorp Life to elect Heath B. McLendon
as a Trustee of the Funds.
ITEM 9. To instruct First Citicorp Life to vote on the selection
of PricewaterhouseCoopers LLP as the independent certified
public accountants for each Fund.
ITEM 10. To transact such other business as may properly come
before the Special Meeting of Contract Holders and any
adjournments thereof.
<PAGE>
After you have voted on the proposals, please be sure to SIGN YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE. If you have any
questions regarding the issues to be voted on, or need assistance in completing
your proxy card, please contact ________________.
We appreciate your participation in this important meeting. Thank you.
Sincerely,
[Name]
[Title]
<PAGE>
FIRST CITICORP LIFE INSURANCE COMPANY
666 Fifth Avenue
3rd Floor
New York, New York 10103
NOTICE OF A SPECIAL MEETING
OF CONTRACT HOLDERS
To be held on April 9, 1999
Dear Participant:
Certain contributions made on your behalf to First Citicorp Life
Insurance Company (First Citicorp Life) with respect to the Variable Annuity
Contract issued by First Citicorp Life to the holder of the Contract (known as
the Contract Holder) have been allocated at your direction to the CitiSelect(R)
VIP Folio 200 Subaccount, CitiSelect(R) VIP Folio 300 Subaccount, CitiSelect(R)
VIP Folio 400 Subaccount, CitiSelect(R) VIP Folio 500 Subaccount or the
CitiFundsSM Small Cap Growth VIP Portfolio Subaccount, each a subaccount of
First Citicorp Life Variable Annuity Separate Account, a separate account of
First Citicorp Life. All of the investable assets of each of the Subaccounts
listed in the left hand column below are invested in the corresponding series
of Variable Annuity Portfolios, a registered investment company, which are
listed in the right hand column below.
Subaccounts Funds
CitiSelect(R)VIP Folio 200 Subaccount CitiSelect(R)VIP Folio 200
CitiSelect(R)VIP Folio 300 Subaccount CitiSelect(R)VIP Folio 300
CitiSelect(R)VIP Folio 400 Subaccount CitiSelect(R)VIP Folio 400
CitiSelect(R)VIP Folio 500 Subaccount CitiSelect(R)VIP Folio 500
CitiFundsSM Small Cap Growth VIP CitiFundsSM Small Cap Growth
Portfolio Subaccount VIP Portfolio
Variable Annuity Portfolios has called a meeting of its investors,
including the Subaccounts, to vote on certain matters. First Citicorp Life, as
the legal owner of all of the assets of the Subaccounts, will vote on such
matters in accordance with the instructions received from contract owners of
the Variable Annuity Contracts with unit interests in the Subaccounts,
including the Contract Holder.
As a participant of record at the close of business on the record date,
February 10, 1999, you are entitled to instruct the Contract Holder as to how
the Contract Holder should vote on certain proposals to be considered at a
Special Meeting of Contract Holders described in the enclosed Notice of Special
Meeting and at any adjournments thereof. The enclosed Proxy Statement and
Notice of Special Meeting with accompanying form of proxy are being mailed to
you and other participants by the Contract Holder on or about February 17,
1999.
<PAGE>
The Meeting will be held at the offices of Citicorp Center, 153 East
53rd Street, 14th Floor, New York, New York on Friday, April 9, 1999 at 9:00
a.m. Eastern Time. You are entitled to provide the Contract Holder with voting
instructions for the following proposals to be voted upon:
ITEM 1. To instruct First Citicorp Life to vote with respect to
the approval of a Sub-Management Agreement between Mutual
Management Corp. and Variable Annuity Portfolios with respect
to CitiSelect VIP Folios 200-500.
ITEM 2. To instruct First Citicorp Life to vote with respect to
the approval of a Sub-Management Agreement between Salomon
Brothers Asset Management Limited and Variable Annuity
Portfolios with respect to CitiSelect VIP Folios 200-500.
ITEM 3. To instruct First Citicorp Life to vote with respect to
the approval of a Sub-Management Agreement between Salomon
Brothers Asset Management Inc and Variable Annuity Portfolios
with respect to CitiSelect VIP Folios 200-500.
ITEM 4. To instruct First Citicorp Life to vote with respect to
approval of an amendment to the Funds' Declaration of Trust
to allow the assets of each Fund to be invested in one or
more investment companies to the extent not prohibited by the
Investment Company Act of 1940, the rules and regulations
thereunder, and exemptive orders granted under such Act.
ITEM 5. To instruct First Citicorp Life to vote with respect to
the approval of an amendment to the fundamental investment
policies of each Fund to allow the assets of that Fund to be
invested in one or more investment companies to the extent
not prohibited by the 1940 Act.
ITEM 6. To instruct First Citicorp Life to vote on authorizing the
Trustees of the Funds to select and change investment
subadvisers and enter into investment subadvisory agreements
without obtaining the approval of shareholders.
ITEM 7. To instruct First Citicorp Life to vote on an amendment to
the fundamental investment policies of each Fund concerning
that Fund's ability to make loans to other persons and to buy
or sell futures contracts and options on futures.
ITEM 8. To instruct First Citicorp Life to elect Heath B. McLendon
as a Trustee of the Funds.
<PAGE>
ITEM 9. To instruct First Citicorp Life to vote on the selection
of PricewaterhouseCoopers LLP as the independent certified
public accountants for each Fund.
ITEM 10. To transact such other business as may properly come
before the Special Meeting of Contract Holders and any
adjournments thereof.
The proposals to be considered at the Meeting are discussed in the
enclosed Proxy Statement. You are urged to read the enclosed Proxy Statement
prior to completing your ballot instructing the Contract Holder how to vote.
To instruct the Contract Holder as to how to vote your interests in the
Variable Annuity Contract allocated to the Subaccounts, you are asked to
promptly mark your voting instructions on the enclosed ballot, then sign, date
and mail it in the accompanying envelope.
IF A BALLOT IS NOT MARKED TO INDICATE VOTING INSTRUCTIONS BUT IS
SIGNED, DATED AND RETURNED IT WILL BE TREATED AS AN INSTRUCTION TO VOTE THE
INTERESTS REPRESENTED THEREBY FOR THE PROPOSALS.
THE UNIT INTERESTS FOR WHICH THE CONTRACT HOLDER RECEIVES NO VOTING
INSTRUCTIONS FROM PARTICIPANTS WILL BE VOTED BY THE CONTRACT HOlDER IN THE SAME
PROPORTION AS UNIT INTERESTS FOR WHICH THE CONTRACT HOLDER DOES, IN FACT,
RECEIVE VOTING INSTRUCTIONS.
First Citicorp Life is not aware of any matters, other than the
specified proposals, to be acted upon at the Meeting. If any other matters come
before the Meeting, the Contract Holder will vote upon such matters in its
discretion. The Contract Holder reserves the right to vote for the adjournment
of the Meeting for the purpose of further solicitation of voting instructions.
At any time prior to the vote by the Contract Holder of the interests
in the Subaccount, you may revoke your voting instructions by written notice to
the Secretary of First Citicorp Life at 666 Fifth Avenue, 3rd Floor, New York,
New York 10103.
<PAGE>
In addition to solicitation by mail, ballots may be solicited by the
Board of Directors, officers and employees of the Contract Holder without
compensation therefor.
Very truly yours,
FIRST CITICORP LIFE INSURANCE COMPANY
[Name]
[Title]
February 17, 1999
YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOUR PROMPTLY VOTING, SIGNING AND
RETURNING THE ENCLOSED BALLOT, WHICH WILL HELP AVOID THE AdDITIONAL EXPENSES OF
A SECOND SOLICITATION. THE ENCLOSED ADDRESSED ENVELOPE REQUIRES NO POSTAGE AND
IS PROVIDED FOR YOUR CONVENIENCE.
\
<PAGE>
PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
FIRST CITICORP LIFE VARIABLE ANNUITY SEPARATE ACCOUNT
A SEPARATE ACCOUNT
OF FIRST CITICORP LIFE INSURANCE COMPANY
666 Fifth Avenue
3rd Floor
New York, New York 10103
NOTICE OF SPECIAL MEETING
OF CONTRACT HOLDERS
To be held Friday, April 9, 1999
A Special Meeting of Contract Holders of Variable Annuity Contracts
issued by First Citicorp Life Insurance Company (First Citicorp Life), with
unit interests in CitiSelect(R) VIP Folio 200 Subaccount, CitiSelect(R) VIP
Folio 300 Subaccount, CitiSelect(R) VIP Folio 400 Subaccount, CitiSelect(R) VIP
Folio 500 Subaccount or CitiFundsSM Small Cap Growth VIP Portfolio Subaccount
of First Citicorp Life Variable Annuity Separate Account, a unit investment
trust registered with the Securities and Exchange Commission, which invest all
of their investable assets in corresponding series of Variable Annuity
Portfolios, will be held at Citicorp Center, 153 East 53rd Street, 14th Floor,
New York, New York, on Friday, April 9, 1999 at 9:00 a.m., Eastern Time, for
the following purposes:
ITEM 1. To instruct First Citicorp Life to vote with respect to
the approval of a Sub-Management Agreement between Mutual
Management Corp. and Variable Annuity Portfolios with respect
to CitiSelect VIP Folios 200-500.
ITEM 2. To instruct First Citicorp Life to vote with respect to
the approval of a Sub-Management Agreement between Salomon
Brothers Asset Management Limited and Variable Annuity
Portfolios with respect to CitiSelect VIP Folios 200-500.
ITEM 3. To instruct First Citicorp Life to vote with respect to
the approval of a Sub-Management Agreement between Salomon
Brothers Asset Management Inc and Variable Annuity Portfolios
with respect to CitiSelect VIP Folios 200-500.
ITEM 4. To instruct First Citicorp Life to vote with respect to
approval of an amendment to the Funds' Declaration of Trust
to allow the assets of each Fund to be invested in one or
<PAGE>
more investment companies to the extent not prohibited by the
Investment Company Act of 1940, the rules and regulations
thereunder, and exemptive orders granted under such Act.
ITEM 5. To instruct First Citicorp Life to vote with respect to
the approval of an amendment to the fundamental investment
policies of each Fund to allow the assets of that Fund to be
invested in one or more investment companies to the extent
not prohibited by the 1940 Act.
ITEM 6. To instruct First Citicorp Life to vote on authorizing the
Trustees of the Funds to select and change investment
subadvisers and enter into investment subadvisory agreements
without obtaining the approval of shareholders.
ITEM 7. To instruct First Citicorp Life to vote on an amendment to
the fundamental investment policies of each Fund concerning
that Fund's ability to make loans to other persons and to buy
or sell futures contracts and options on futures.
ITEM 8. To instruct First Citicorp Life to elect Heath B. McLendon
as a Trustee of the Funds.
ITEM 9. To instruct First Citicorp Life to vote on the selection
of PricewaterhouseCoopers LLP as the independent certified
public accountants for each Fund.
ITEM 10. To transact such other business as may properly come
before the Special Meeting of Contract Holders and any
adjournments thereof.
THE BOARD OF DIRECTORS OF FIRST CITICORP LIFE RECOMMENDS THAT YOU VOTE
IN FAVOR OF EACH OF ITEMS 1 THROUGH 9.
Only Contract Holders of record on February 10, 1999 will be entitled
to vote at the Special Meeting of Contract Holders and at any adjournments
thereof.
February 17, 1999
YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOUR PROMPTLY VOTING,
SIGNING AND RETURNING THE ENCLOSED PROXY, WHICH WILL HElP AVOID THE ADDITIONAL
<PAGE>
EXPENSE OF A SECOND SOLICITATION. THE ENCLOSED ADDRESSED ENVELOPE REQUIRES NO
POSTAGE AND IS PROVIDED FOR YOUR CONVENIENCE.
<PAGE>
PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
CITISELECT(R) VIP FOLIO 200 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 300 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 400 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 500 SUBACCOUNT AND
CITIFUNDSSM SMALL CAP GROWTH VIP PORTFOLIO
SUBACCOUNT
OF
FIRST CITICORP LIFE VARIABLE ANNUITY SEPARATE ACCOUNT,
A SEPARATE ACCOUNT OF
FIRST CITICORP LIFE INSURANCE COMPANY
666 Fifth Avenue
3rd Floor
New York, New York 10103
PROXY STATEMENT
This Proxy Statement and Notice of Special Meeting with accompanying
form of proxy are being furnished in connection with the solicitation of
proxies by the Board of Directors of First Citicorp Life Insurance Company
(First Citicorp Life), on behalf of First Citicorp Life Variable Annuity
Separate Account, a separate account of First Citicorp Life, for use at a
Special Meeting of contract holders (known as the Contract Holders) of Variable
Annuity Contracts issued by First Citicorp Life with unit interests in
CitiSelect(R) VIP Folio 200 Subaccount, CitiSelect(R) VIP Folio 300 Subaccount,
CitiSelect(R) VIP Folio 400 Subaccount, CitiSelect(R) VIP Folio 500 Subaccount
or CitiFundsSM Small Cap Growth VIP Portfolio Subaccount of First Citicorp Life
Variable Annuity Separate Account, or any adjournment thereof, to be held at
Citicorp Center, 153 East 53rd Street, 14th Floor, New York, New York, on
Friday, April 9, 1999 at 9:00 a.m., Eastern Time, for the purposes set forth in
the accompanying Notice of Special Meeting.
The close of business on February 10, 1999 has been fixed as the Record
Date for the determination of (a) Contract Holders entitled to notice of and to
vote at the Meeting, and (b) Participants entitled to give instructions to
Contract Holders as to how to vote at the Meeting. __________ Units of
CitiSelect(R) VIP Folio 200 Subaccount, __________ Units of CitiSelect(R) VIP
Folio 300 Subaccount, __________ Units of CitiSelect(R) VIP Folio 400
Subaccount, __________ Units of CitiSelect(R) VIP Folio 500 Subaccount and
__________ Units of CitiFundsSM Small Cap Growth VIP Portfolio Subaccount were
outstanding as of the close of business on the Record Date. Contract Holders of
record at the close of business on the Record Date will be entitled to one vote
for $100 of dollar value of Units in the applicable Subaccount, with fractional
votes for amounts less than $100.
<PAGE>
All of the investable assets of each of the Subaccounts listed in the
left hand column below are invested in the corresponding series of Variable
Annuity Portfolios, a registered investment company, which are listed in the
right hand column below.
Subaccounts Funds
CitiSelect(R)VIP Folio 200 Subaccount CitiSelect(R)VIP Folio 200
CitiSelect(R)VIP Folio 300 Subaccount CitiSelect(R)VIP Folio 300
CitiSelect(R)VIP Folio 400 Subaccount CitiSelect(R)VIP Folio 400
CitiSelect(R)VIP Folio 500 Subaccount CitiSelect(R)VIP Folio 500
CitiFundsSM Small Cap Growth VIP CitiFundsSM Small Cap Growth
Portfolio Subaccount VIP Portfolio
The Annual Report for the Subaccounts for the fiscal years ended
December 31, 1998, including audited financial statements, has previously been
sent to Contract Holders and is available without charge by written request or
by calling ______________.
This Proxy Statement and Notice of Special Meeting with accompanying
form of proxy are being mailed by the Board of Directors of First Citicorp Life
on or about February 17, 1999.
MANNER OF VOTING PROXIES AND VOTE REQUIRED
Each Subaccount is a shareholder of the corresponding Fund. First
Citicorp Life, as legal owner of all the assets of each Subaccount, has been
asked to vote on certain matters with respect to the Funds because Variable
Annuity Portfolios has called a meeting of its investors to vote on such
matters. First Citicorp Life will vote on such matters in accordance with the
instructions received from Contract Holders. Each employee participating on the
Record Date under a Variable Annuity Contract issued to or adopted by a
Contract Holder (known as a Participant) shall have the right to give written
instructions to the applicable Contract Holder with respect to the interest in
the Funds attributable to his or her portion of the unit interests held in the
Subaccounts. Each Contract Holder shall provide voting instructions to First
Citicorp Life with respect to its unit interests in accordance with the
instructions received from its Participants.
If the accompanying form of proxy is executed properly and returned,
unit interests represented by it will be voted at the Meeting in accordance
with the instructions on the proxy. Contract Holders of the CitiFundsSM Small
Cap Growth VIP Portfolio Subaccount will not vote on Items 1, 2 and 3, and
Contract Holders of all of the Subaccounts will vote together on the election
of Mr. McLendon as a Trustee of the Funds. Otherwise, Contract Holders of each
Subaccount will vote separately with respect to each Item. IF NO INSTRUCTIONS
ARE SPECIFIED, ALL UNIT INTERESTS OF THE CITISELECT SMALL CAP GROWTH VIP
PORTFOLIO SUBACCOUNT WILL BE VOTED FOR EACH OF PROPOSED ITEMS 4 THROUGH 9, AND
ALL UNIT INTERESTS OF EACH OTHER SUBACCOUNT WILL BE VOTED FOR EACH OF PROPOSED
<PAGE>
ITEMS 1 THROUGH 9. 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 First Citicorp Life.
If sufficient votes to approve the proposed Items 1 through 9 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 unit interests voted
at the Meeting. When voting on a proposed adjournment, the persons named as
proxies will vote all unit interests that they are entitled to vote with
respect to Items 1 through 9 for the proposed adjournment, unless directed to
disapprove the Item, in which case such unit interests will be voted against
the proposed adjournment.
With respect to each Subaccount, the presence in person or by proxy of
the holders of a majority of the outstanding unit interests in that Subaccount
entitled to vote is required to constitute a quorum at the Meeting for purposes
of voting on Items 1 through 9, as applicable. For purposes of determining the
presence of a quorum for transacting business at the Meeting, abstentions will
be treated as unit interests 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 through 9.
GENERAL BACKGROUND
As disclosed in the First Citicorp Life Variable Annuity Separate
Account Prospectus, all of the investable assets of the Subaccounts are
invested in the Funds.
The Funds are managed by Citibank, N.A. The CitiSelect VIP Folios are
asset allocation funds. Each of these Funds invests in a mix of equity, fixed
income and money market securities that is designed by Citibank to offer a
different level of potential return with a different amount of risk. These
Funds employ investment subadvisers to manage certain types of securities or to
manage securities in particular investment styles. Citibank monitors and
supervises the subadvisers. Citibank itself manages the assets of CitiFunds
Small Cap Growth VIP Portfolio.
First Citicorp Life, a the legal owner of all the assets of the
Subaccounts is being asked to vote on the approval three new subadvisers for
the Funds. Approval of these subadvisers is covered by Items 1, 2 and 3 below.
These subadvisers will continue to manage the Funds' assets after the
implementation of the proposed restructuring described below.
<PAGE>
CURRENT STRUCTURE AND SUBADVISERS
The Funds currently operate on a stand-alone basis; that is, each Fund
invests directly in investment securities in accordance with its investment
objective and policies.
The assets of CitiFunds Small Cap Growth VIP Portfolio are invested
primarily in small capitalization growth securities and currently are managed
directly by Citibank.
Citibank determines the asset allocations for CitiSelect VIP Folios
200-500. The assets of these Funds currently are allocated among up to eight
types of securities, or asset classes. These asset classes are large
capitalization growth securities, large capitalization value securities, small
capitalization growth securities, small capitalization value securities,
international equity securities, U.S. fixed income securities, foreign
government securities and money market securities. Citibank has decided to add
high yield securities as an additional asset class for the Funds and to delete
the money market securities asset class. The addition or deletion of asset
classes does not, by itself, require shareholder approval, but hiring a
subadviser for any new asset class would require shareholder approval.
Citibank manages certain of the Funds' asset classes itself, and
supervises subadvisers for the remaining asset classes. Currently, Citibank
manages the large capitalization growth, small capitalization growth, U.S.
fixed income and money market asset classes. The following subadvisers
currently manage the asset classes indicated: large capitalization value
securities, Mutual Management Corp.; small capitalization value securities,
Franklin Advisory Services, Inc; foreign government securities, Salomon
Brothers Asset Management Limited (effective March 1, 1999); and international
equity securities, Hotchkis and Wiley. Mutual Management Corp. and Salomon
Brothers Asset Management Limited may act as subadvisers only for an interim
period unless their sub-management agreements are approved by Fund
shareholders. Also, Citibank is recommending that Salomon Brothers Asset
Management Inc be hired as a subadviser to manage the Funds' high yield
securities. Salomon Brothers Asset Management Inc cannot act as a subadviser
until its sub-management agreement is approved by Fund shareholders.
Under the CitiSelect VIP Folios' existing structure, Citibank and each
subadviser manage the assets in each asset class for each of CitiSelect VIP
Folios 200-500 and the assets of CitiFunds Small Cap Growth VIP Portfolio
separately. This means, for example, that Citibank currently manages five pools
of assets consisting of small capitalization growth securities, one for each
Fund. Because the assets of CitiSelect VIP Folios 200-500 currently are
allocated among up to eight types of securities, Citibank and the subadvisers
currently manage a total of 33 separate pools of assets, including the small
capitalization growth securities managed for CitiFunds Small Cap Growth VIP
Portfolio. This structure is administratively burdensome and expensive for the
Funds. In addition, because of the separate pools of assets, the Funds are
<PAGE>
limited in their ability to take advantage of economies of scale of asset
management.
PROPOSED STRUCTURE AND SUBADVISERS
Until recently, mutual funds could not invest their assets in more than
one other registered investment company without obtaining exemptive relief from
the Securities and Exchange Commission. Recent amendments to the Investment
Company Act of 1940 now permit funds to invest their assets in multiple
registered investment companies so long as the investment companies hold
themselves out to investors as related companies for purposes of investment and
investor services.
In order to take advantage of this change in law and any future changes
in law on this topic, the Funds are proposing the following restructuring:
eight or more new investment companies (referred to as "New Portfolios"), each
corresponding to a particular asset class of the existing Funds or any new
asset class in which the Funds are permitted to invest, will be created. This
will permit all of the Funds' assets of a single type to be managed in a single
pool. Each of CitiSelect VIP Folios 200-500 will contribute each of its
securities to that New Portfolio representing the asset class for that
particular security (e.g., foreign bonds will be contributed to the New
Portfolio which will invest solely in foreign bonds and related investments).
CitiFunds Small Cap Growth VIP Portfolio will contribute its securities to that
New Portfolio which will invest solely in small capitalization growth
securities. In exchange, each Fund will receive an interest in the New
Portfolio to which the contribution was made. As a result, each Fund will
invest all of its investable assets in one or more of the New Portfolios. After
giving effect to the restructuring, Citibank will continue to perform its asset
allocation services at the Fund level for the CitiSelect VIP Folios.
Under this proposed structure, Citibank and the subadvisers described
above will manage the assets in each asset class in a single pool. This means,
for example, that Citibank will manage all small cap growth securities for all
of the Funds in a single New Portfolio. The restructuring is illustrated by the
chart below.
BEFORE RESTRUCTURING: EACH FUND IS A STAND-ALONE FUND CONTAINING ALL
APPLICABLE ASSET CLASSES.
[Description of Chart
(Page layout - landscape)
Five boxes across page. Each box contains the name of one Fund. The boxes
contain the following names (from left to right): CitiSelect VIP Folio 200,
CitiSelect VIP Folio 300, CitiSelect VIP Folio 400, CitiSelect VIP Folio 500
and CitiFunds Small Cap Growth VIP Portfolio.]
<PAGE>
AFTER RESTRUCTURING: EACH FUND INVESTS ALL OF ITS INVESTABLE ASSETS IN ONE OR
MORE NEW PORTFOLIOS.
[Description of Chart
(Page layout - landscape)
Five boxes across page. Each box contains the name of one Fund. The boxes
contain the following names (from left to right): CitiSelect VIP Folio 200,
CitiSelect VIP Folio 300, CitiSelect VIP Folio 400, CitiSelect VIP Folio 500
and CitiFunds Small Cap Growth VIP Portfolio. Eight boxes are placed across the
page under the five boxes containing the names of the Funds. Each of the eight
boxes contains the heading "New Portfolio." In each of the eight boxes under
the "New Portfolio" heading is the name of a portfolio. The names of the
portfolios in the boxes are (from left to right): Large Cap Growth Securities,
Large Cap Value Securities, Small Cap Value Securities, Intermediate Income
Securities, International Securities, Foreign Government Bonds, High Yield
Securities and Small Cap Growth Securities. Arrows connect the first four boxes
containing the names of the Funds to each of the eight boxes beneath them and
connect the fifth box containing the name of CitiFunds Small Cap Growth VIP
Portfolio to the box containing the caption, "New Portfolio Small Cap Growth
Securities."]
THE FUNDS' EXPENSE RATIO WILL NOT INCREASE AS A RESULT OF THE
RESTRUCTURING. CONTRACT HOLDERS ALSO SHOULD NOTE THAT THE CoNTRACTUAL LEVEL OF
MANAGEMENT FEES FOR FUND SHAREHOLDERS WILL NOT INCREASE. IT IS EXPECTeD THAT
THE SAME PERSONNEL AT CITIBANK AND AT EACH SUBADVISER WHO CURRENTLY PROVIDE
INVESTMENT MANAGEMENT SERVICES WILL CONTINUE TO DO SO AFTER THE RESTRUCTURING,
AND THE NATURE, LEVEL AND QUALITY OF SERVICES TO THE FUNDS WILL NOT BE
ADVERSELy AFFECTED.
The restructuring is intended to be tax-free to Fund shareholders, and
the Funds intend to apply to the Internal Revenue Service for a private letter
ruling to that effect. The implementation of the restructuring will be
contingent upon the receipt of that private letter ruling or an opinion of
counsel to the same effect.
The Funds' Trustees believe that this restructuring is in the best
interests of Fund shareholders. Subject to receipt of the private letter ruling
or opinion of counsel described above, the Trustees will implement the
restructuring for each Fund if shareholders of that Fund and each other Fund
approve each of the proposals in Items 4 and 5 below. The proposal in Item 6
will permit the Trustees, subject to receiving exemptive relief from the
Securities and Exchange Commission, to hire new subadvisers for the New
Portfolios without Fund shareholder approval. The Trustees will implement the
restructuring whether or not Fund shareholders approve the proposals in this
Proxy Statement other than those in Items 4 and 5.
In the event that the proposals in Items 4 and 5 below do not receive
the requisite shareholder approval for any Fund, the Trustees will consider
possible alternatives, which might include resubmission of the proposals for
approval by shareholders of that Fund.
<PAGE>
ITEM 1. TO INSTRUCT FIRST CITICORP LIFE TO VOTE WITH RESPECT TO
THE APPROVAL OF A SUB-MANAGEMENT AGREEMENT BETWEEN MUTUAL
MANAGEMENT CORP. AND VARIABLE ANNUITY PORTFOLIOS WITH RESPECT
TO CITISELECT VIP FOLIOS 200-500.
ITEM 2. TO INSTRUCT FIRST CITICORP LIFE TO VOTE WITH RESPECT TO
THE APPROVAL OF A SUB-MANAGEMENT AGREEMENT BETWEEN SALOMON
BROTHERS ASSET MANAGEMENT LIMITED AND VARIABLE ANNUITY
PORTFOLIOS WITH RESPECT TO CITISELECT VIP FOLIOS 200-500.
ITEM 3. TO INSTRUCT FIRST CITICORP LIFE TO VOTE WITH RESPECT TO
THE APPROVAL OF A SUB-MANAGEMENT AGREEMENT BETWEEN SALOMON
BROTHERS ASSET MANAGEMENT INC AND VARIABLE ANNUITY PORTFOLIOS
WITH RESPECT TO CITISELECT VIP FOLIOS 200-500.
ONLY CONTRACT HOLDERS OF CITISELECT FOLIOS 200-500 SUBACCOUNTS ARE BEING
ASKED TO VOTE ON ITEMS 1 THROUGH 3.
Citibank, N.A. currently manages the assets of the CitiSelect VIP
Folios and provides administrative services to the Funds pursuant to separate
Management Agreements, each dated November 8, 1996. Subject to the terms of
each Management Agreement, Citibank is responsible for the investment
management of the applicable Fund, selects, subject to the review and approval
of the Board of Trustees of the Funds, subadvisers to make the investment
selections with respect to certain types of securities of the Fund consistent
with the guidelines and directions set by Citibank and the Board of Trustees,
and reviews each subadviser's continued performance.
Miller Anderson & Sherrerd, LLP served as subadviser for the large cap
value securities of CitiSelect VIP Folios 200-500 from the Funds' inception
through January 21, 1999. Since January 22, 1999, Mutual Management Corp.
(MMC), an affiliate of Citibank as described below, has managed the large cap
value securities of CitiSelect VIP Folios 200-500 that were previously managed
by Miller Anderson.
Pacific Investment Management Company (PIMCO) has served as subadviser
for the foreign government securities of CitiSelect VIP Folios 200-500 from the
Funds' inception. Commencing March 1, 1999, Salomon Brothers Asset Management
Limited (SBAM), also an affiliate of Citibank, will manage the foreign
government securities that are currently managed by PIMCO.
As noted, it is proposed that Salomon Brothers Asset Management Inc
(SBAMInc) be hired as subadviser for high yield securities, a new asset class
for the CitiSelect VIP Folios. SBAMInc is also an affiliate of Citibank.
SBAMInc, a Delaware corporation, maintains its principal business office at 7
<PAGE>
World Trade Center, New York, New York, 10048. SBAMInc currently is not
managing any Fund assets.
MMC, a Delaware corporation, maintains its principal office at 388
Greenwich Street, New York, New York 10013. MMC currently manages the large cap
value securities of CitiSelect VIP Folios 200-500 on an interim basis, with
approval of the Funds' Board of Trustees. Approval of the shareholders of the
Funds is necessary for MMC to continue to serve as subadviser. If Item 1 is
approved, MMC will continue to be responsible for the daily management of the
large cap value securities of CitiSelect VIP Folios 200-500.
SBAM, a limited liability private company formed and domiciled in
England and Wales, maintains its principal office at 111 Buckingham Palace
Road, London, England. SBAM is a U.S. registered investment adviser. Commencing
March 1, 1999, SBAM will manage the foreign government securities of CitiSelect
VIP Folios 200-500 on an interim basis, with approval of the Funds' Board of
Trustees. Approval of the shareholders of the Funds is necessary for SBAM to
continue to serve as subadviser. If Item 2 is approved, SBAM will continue to
be responsible for the daily management of the foreign government securities of
CitiSelect VIP Folios 200-500.
The Board of Trustees terminated the Funds' Sub-Management Agreements
with Miller Anderson and PIMCO upon Citibank's recommendations. These
recommendations were based on Citibank's evaluation of the services provided by
these subadvisers, as well as the availability of appropriate asset management
capabilities and resources in its affiliates, MMC and SBAM.
In accordance with the requirements of the 1940 Act, each
Sub-Management Agreement must be approved by the shareholders of each of
CitiSelect VIP Folios 200-500. If the proposed restructuring takes place, MMC,
SBAM and SBAMInc will serve as subadvisers to the New Portfolios representing
the large cap value, foreign government and high yield asset classes,
respectively.
THE SUB-MANAGEMENT AGREEMENTS
If the Sub-Management Agreements with MMC and SBAM are approved by the
required shareholders of CitiSelect VIP Folios 200-500, as described herein,
MMC and SBAM will continue to serve as subadvisers to each of CitiSelect VIP
Folios 200-500. Similarly, if the Sub-Management Agreement with SBAMInc is
approved by the required shareholders of CitiSelect VIP Folios 200-500, as
described herein, SBAMInc will serve as subadviser to each of CitiSelect VIP
Folios 200-500. Each Sub-Management Agreement, if approved by "a majority of
the outstanding voting securities" (as defined under "Vote Required" below) of
the applicable Fund, 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. Each Sub-Management Agreement may be terminated at any time
without the payment of any penalty by the Board of Trustees of the Funds or by
<PAGE>
"a majority of the outstanding voting securities" of the applicable Fund or by
Citibank. Each Sub-Management Agreement may also be terminated by the
applicable subadviser upon 90 days' advance written notice to Citibank. Each
Sub-Management Agreement will also terminate automatically in the event of its
"assignment" (as defined in the 1940 Act).
Under each Sub-Management Agreement, MMC, SBAM or SBAMInc, as
appropriate, will furnish continuing portfolio management services with respect
to the large cap value, foreign government or high yield securities of
CitiSelect VIP Folios 200-500, 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
the applicable Fund. Each subadviser will also provide Citibank with such
investment advice and reports and data as are requested by Citibank.
Each Sub-Management Agreement provides that the subadviser will be
responsible for providing Citibank with such investment advice and supervision
as Citibank may from time to time consider necessary for the proper supervision
of such portion of a Fund's assets as Citibank 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 the portfolio allocated by Citibank to the subadviser will be held
uninvested, subject always to the restrictions of the Funds' Declaration of
Trust, dated October 18, 1996, and By-laws, as each may be amended and restated
from time to time, the provisions of the 1940 Act, the then-current
Registration Statement with respect to the applicable Fund, and subject,
further, to the applicable subadviser notifying Citibank in advance of its
intention to purchase any securities except insofar as the requirement for such
notification may be waived or limited by Citibank; making recommendations to
Citibank as to the manner in which proxies, voting rights, rights to consent to
corporate action and any other rights pertaining to the Fund's portfolio
securities shall be exercised; and taking, on behalf of the Fund, all actions
which the subadviser deems necessary to implement the investment policies of
the Fund, and in particular placing all orders for the purchase or sale of
securities for the Fund's account with the brokers or dealers selected by it,
and to that end each subadviser is authorized as agent to give instructions to
the custodian and any subcustodian of the Fund as to deliveries of securities
and payments of cash for the account of the Fund.
The subadvisers are not liable for any error of judgment or mistake of
law or for any loss suffered by any of CitiSelect VIP Folios 200-500 in
connection with the matters to which the applicable Sub-Management Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence in the performance of their obligations and duties, or by reason of
reckless disregard of their obligations and duties under the applicable
Agreement.
Contract Holders should refer to Exhibits A, B and C attached hereto
for the complete terms of the Sub-Management Agreements with MMC, SBAM and
SBAMInc, respectively. The description of each Sub-Management Agreement set
<PAGE>
forth herein is qualified in its entirety by the provisions of the
Sub-Management Agreement as set forth in such Exhibits.
INVESTMENT ADVISORY FEES
Until the approval of the shareholders of the Funds is obtained for a
new MMC Sub-Management Agreement, applicable rules under the 1940 Act do not
permit MMC to be paid more than the compensation Miller Anderson would have
received under its Sub-Management Agreement with the Funds. The fees payable
under the Miller Anderson Sub-Management Agreement were accrued daily and
payable monthly and were equal to the percentages specified below of the
aggregate assets of the Funds allocated to Miller Anderson:
Fees Previously Payable to Miller Anderson
0.625% on the first $25 million;
0.375% on the next $75 million;
0.250% on the next $400 million; and
0.20% on assets in excess of $500 million.
Under the proposed new MMC Sub-Management Agreement, from and after
approval by the shareholders of the Funds, the Funds will pay MMC for its
services on the basis of the following annual fee schedule:
MMC Proposed Fee Schedule
0.65% on the first $10 million;
0.50% on the next $10 million;
0.40% on the next $10 million; and
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 Funds
allocated to MMC. Fees under the new MMC Sub-Management Agreement will be
higher than those that would have been payable to Miller Anderson; however, the
Funds' overall management fee will remain the same. To the extent that MMC's
fees are higher than those that would have been payable to Miller Anderson,
Citibank's management fee will go down by the same amount. As a result,
shareholders of the Funds will not be affected by the increase.
During the Funds' fiscal years ended December 31, 1998, Miller Anderson
received $__________ in advisory fees from the Funds. Had the proposed fees
under the new MMC Sub-Management Agreement been in effect during this period,
Miller Anderson would have received $____________ in advisory fees from the
Funds, or ____% of the fees that Miller Anderson actually received during this
period.
<PAGE>
Under the SBAM Sub-Management Agreement, the Funds will pay SBAM for
its services on the basis of the following annual fee schedule:
SBAM Fee Schedule
0.30% on the first $200 million;
0.25% on assets over $200 million
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 Funds
allocated to SBAM. These fees are the same as those that will be paid to SBAM
as interim subadviser to the Funds, commencing March 1, 1999. Fees under the
new SBAM Sub-Management Agreement will be lower than those that would have been
payable to PIMCO; however, the Funds' overall management fees paid by
shareholders of the Funds will remain the same. To the extent that SBAM's fees
are lower than those that would have been payable to PIMCO, Citibank's
management fee will increase by the same amount. As a result, shareholders of
the Funds will not be affected by the decrease.
During the Funds' fiscal years ended December 31, 1998, PIMCO received
$__________ in advisory fees from the Funds. Had the proposed fees under the
new SBAM Sub-Management Agreement been in effect during this period, PIMCO
would have received $____________ in advisory fees from the Funds, or ____% of
the fees that PIMCO actually received during this period.
Under the SBAMInc Sub-Management Agreement, the Funds will pay SBAMInc
for its services on the basis of the following annual fee schedule:
SBAMInc Fee Schedule
0.45% on the first $100 million;
0.40% on assets in excess of $100 million.
Fees will be accrued daily and payable monthly and will be at the
annual rates equal to the percentages specified above of the aggregate assets
of the Funds allocated to SBAMInc.
INFORMATION REGARDING MUTUAL MANAGEMENT CORP.
The following information regarding MMC has been provided by MMC.
MMC is a wholly-owned subsidiary of Salomon Smith Barney Holdings Inc,
which in turn is a wholly-owned subsidiary of Citigroup Inc. Citigroup
businesses produce a broad range of financial services - asset management,
banking and consumer finance, credit and charge cards, insurance, investments,
investment banking and trading - and use diverse channels to make them
available to consumers and corporate managers to numerous investment companies
having aggregate assets as of the date of this Proxy Statement in excess of
<PAGE>
$290 billion. Citigroup's principal business address is 153 East 53rd Street,
New York, New York 10043.
Frances A. Root will manage the large cap value securities of
CitiSelect VIP Folios 200-500 allocated to MMC. Ms. Root is a Director of MMC
and a Senior Portfolio Manager. She joined Smith Barney Capital Management in
1992. Formerly, she was with Shearson Lehman Advisors as a Vice President and
Portfolio Manager for seven years; and prior to that, with E.F. Hutton &
Company, Inc. She is a Chartered Financial Analyst and a member of The New York
Society of Security Analysts. Ms. Root holds a BA degree from Sweet Briar
College.
The following table sets forth certain information concerning the
principal executive officers and directors of MMC. The address of each of the
following persons is 388 Greenwich Street, New York, New York 10013.
_______________________________________________________________________________
NAME PRINCIPAL OCCUPATION
_______________________________________________________________________________
Heath B. McLendon Chairman, President and Chief
Executive Officer of MMC and
Managing Director of Salomon
Smith Barney
_______________________________________________________________________________
Lewis E. Daidone Director and Senior Vice President of
MMC; Managing Director of
Salomon Smith Barney and Senior
Vice President and Treasurer of
forty-one mutual funds sponsored by
Salomon Smith Barney
_______________________________________________________________________________
A. George Saks Director of MMC and Executive Vice
President of Salomon Smith Barney
_______________________________________________________________________________
Michael J. Day Treasurer of MMC and Managing
Director of Salomon Smith Barney
_______________________________________________________________________________
Christina T. Sydor General Counsel and Secretary of
MMC; Managing Director of
Salomon Smith Barney and
Secretary of the forty-one
investment companies sponsored by
Salomon Smith Barney
_______________________________________________________________________________
<PAGE>
The following table indicates the size of each investment company
advised by MMC with an investment objective that is similar to the objective of
above average total return consistent with reasonable risk and the advisory fee
rates of these investment companies.
_______________________________________________________________________________
NET ASSETS ON ANNUAL MANAGEMENT
DECEMBER 31, FEE
1998 PERCENT OF
FUND (IN THOUSANDS) AVERAGE NET ASSETS
_______________________________________________________________________________
_______________________________________________________________________________
OPEN-END FUND
_______________________________________________________________________________
Smith Barney Funds, Inc. $______ 0.60% to $500 million;
Large Cap Value Fund 0.55% next $500 million;
0.50% after $1 billion
_______________________________________________________________________________
_______________________________________________________________________________
VARIABLE ANNUITY FUNDS
_______________________________________________________________________________
Smith Barney Variable Account $13,779 0.60%
Funds
Income and Growth Portfolio
_______________________________________________________________________________
Travelers Series Fund, Inc. $464,936 0.65%
Smith Barney Large Cap Value
Portfolio
_______________________________________________________________________________
INFORMATION REGARDING SALOMON BROTHERS ASSET MANAGEMENT LIMITED
The following information regarding SBAM has been provided by SBAM.
SBAM is a limited liability private company formed and domiciled in
England and Wales. It is a wholly owned subsidiary of Salomon Brothers Europe
Limited, Victoria Plaza, 111 Buckingham Palace Road, London SWIS OSB. Salomon
Brothers Europe Limited is owned by two wholly owned subsidiaries of Salomon
Brothers Holding Company Inc (388 Greenwich Street, New York, New York 10013),
Salomon (International) Finance AG (Schipfe 2, P.O. Box 4406, Zurich,
Switzerland) and Salomon International Limited (Victoria Plaza, 111 Buckingham
Palace Road, London SWIS OSB). Salomon Brothers Holding Company Inc is wholly
owned by Salomon Smith Barney Holdings Inc, which in turn is a wholly owned
subsidiary of Citigroup Inc. Citigroup's businesses are described above.
__________ will manage the assets of Foreign Bond Portfolio allocated
to SBAM. __________ is a __________ of SBAM. __________ joined SBAM in
__________. Formerly, __________ was with __________ as __________ for
__________ years; and prior to that, with __________. __________ holds a degree
from __________.
<PAGE>
The following table sets forth certain information concerning the
principal executive officers and directors of SBAM. The address of each of the
following persons is Victoria Plaza, 111 Buckingham Palace Road, London SW1W
OSB, England.
_______________________________________________________________________________
NAME PRINCIPAL OCCUPATION
_______________________________________________________________________________
Vilas V. Gadkari Managing Director and Chief
Investment Officer of SBAM;
Managing Director of SBAMInc;
Managing Director of Salomon
Brothers Inc.; and Managing
Director Salomon Brothers
International Limited
_______________________________________________________________________________
David J. Scott Director of SBAM
_______________________________________________________________________________
David J. Griffiths Economist and Portfolio Manager of
SBAM
_______________________________________________________________________________
Karolos Haggipavlou Portfolio Manager of SBAM
_______________________________________________________________________________
The following table indicates the size of each investment company
advised by SBAM with an investment objective that is similar to the objective
of maximum total return consistent with preservation of capital and the
advisory fee rates of these investment companies.
_______________________________________________________________________________
ANNUAL MANAGEMENT
NET ASSETS ON FEE
DECEMBER 31, PERCENT OF
FUND 1998 AVERAGE NET ASSETS
_______________________________________________________________________________
_______________________________________________________________________________
OPEN-END FUNDS
_______________________________________________________________________________
Salomon Brothers Global Bond $45,046,911 .375% to $50 million
Series of the JNL Series .35% next $100
Trust million
.30% next $350
million
.25% over $500
million
_______________________________________________________________________________
Salomon Brothers Investment $117,747,606 .75%
Series - Strategic Bond Fund
_______________________________________________________________________________
Strategic Bond Opportunity $95,200,414 .35% to $50 million
Series of the American .30% next $150
Growth Series million
.25% next $300
million
.10% over $500
million
_______________________________________________________________________________
Strategic Bond Trust for the $441,725,216 .35% to $50 million
NASL Series .30% next $150
million
.25% next $300
million
.20% over $500
million
_______________________________________________________________________________
Strategic Income Fund of the $79,754,865 .35% to $50 million
North American Funds Series .30% next $150
million
.25% next $300
million
.20% over $500
million
_______________________________________________________________________________
_______________________________________________________________________________
VARIABLE ANNUITY FUND
_______________________________________________________________________________
Salomon Brothers Variable $10,390,056 .75%
Series Fund
_______________________________________________________________________________
_______________________________________________________________________________
INFORMATION REGARDING SALOMON BROTHERS ASSET MANAGEMENT INC
The following information regarding SBAMInc has been provided by
SBAMInc.
SBAMInc is a wholly owned subsidiary of Salomon Brothers Holding
Company Inc. Salomon Brothers Holding Company Inc is wholly owned by Salomon
Smith Barney Holdings Inc, which in turn is a wholly owned subsidiary of
Citigroup Inc. Citigroup's businesses are described above.
__________ will manage the assets of High Yield Portfolio allocated to
SBAMInc. __________ is a __________ of SBAMInc. __________ joined SBAMInc in
__________. Formerly, __________ was with __________ as __________ for
__________ years; and prior to that, with __________. __________ holds a degree
from __________.
The following table sets forth certain information concerning the
principal executive officers and directors of SBAMInc. The address of each of
the following persons other than Mr. Gadkari is 7 World Trade Center, New York,
New York, 10048. Mr. Gadkari's address is Victoria Plaza, 111 Buckingham Palace
Road, London SW1W OSB, England
_______________________________________________________________________________
NAME PRINCIPAL OCCUPATION
_______________________________________________________________________________
Vilas V. Gadkari Managing Director of SBAMInc;
Managing Director and Chief
Investment Officer of SBAM;
Managing Director of Salomon
Brothers Inc; and Managing Director
Salomon Brothers International
Limited
_______________________________________________________________________________
Mitchel E. Schulman Chief Operating Officer - Portfolios,
SBAMInc
_______________________________________________________________________________
Marcus A. Peckman Vice President and Chief Financial
Officer of SBAMInc
_______________________________________________________________________________
Michael F. Rosenbaum Chief Legal Officer of SBAMInc
_______________________________________________________________________________
Thomas W. Jasper Treasurer of SBAMInc
_______________________________________________________________________________
Andrew W. Alter Assistant Secretary of SBAMInc
_______________________________________________________________________________
Howard M. Darmstadter Assistant Secretary of SBAMInc
_______________________________________________________________________________
The following table indicates the size of each investment company
advised by SBAMInc with an investment objective that is similar to the
objective of a high level of current income or the objective of capital
appreciation and the advisory fee rates of these investment companies.
<PAGE>
_______________________________________________________________________________
ANNUAL MANAGEMENT
NET ASSETS ON FEE
DECEMBER 31, PERCENT OF
FUND 1998 AVERAGE NET ASSETS
_______________________________________________________________________________
_______________________________________________________________________________
Salomon Brothers Series Funds $569,771,993 .75%
Inc
Salomon Brothers High Yield
Bond Fund
_______________________________________________________________________________
Salomon Brothers Variable Series $7,189,550 .75%
Funds Inc
Salomon Brothers Variable
High Yield Bond Fund
_______________________________________________________________________________
Salomon Brothers Institutional $41,418,579 .50%
Series Funds Inc
Salomon Brothers Institutional
High Yield Bond Fund
_______________________________________________________________________________
Salomon Brothers High Income $62,153,198 .70%*
Fund Inc
_______________________________________________________________________________
Salomon Brothers High Income $881,476,410 1.00%*
Fund II Inc
_______________________________________________________________________________
Salomon Brothers/JNL Global $52,040,000 .375% first $50 million
Bond Series, an investment .350% next $100 million
portfolio of JNL .300% next $350 million
Series Trust .250% over $500
million**
_______________________________________________________________________________
Heritage High Yield Bond Fund, $54,365,000 .50%**+
an investment portfolio of
Heritage Income Trust
_______________________________________________________________________________
__________________________
* With respect to this fund the investment advisory or management fee is a
percentage of average weekly net assets.
** With respect to this fund, SBAMInc serves as subadviser and, accordingly,
the sponsoring investment adviser pays SBAMInc a portion of the total
advisory fee.
+ Amount paid is a percentage of the annual investment advisory fee paid to
the manager, without regard to any reduction in the fees paid to the
manager as a result of any limitation of the fund's expenses.
THE EVALUATION BY THE BOARD OF TRUSTEES
At a meeting on February 5, 1999 the Trustees of the Funds considered
information with respect to whether each proposed Sub-Management Agreement was
in the best interests of CitiSelect VIP Folios 200-500 and their shareholders.
The Board of Trustees considered, among other factors, representations by each
subadviser regarding the nature and quality of services provided or to be
provided by the subadviser, and information regarding fees, expense ratios and
<PAGE>
performance. In evaluating each subadviser's ability to provide services to the
Funds, the Trustees considered information as to the subadviser's business
organization, financial resources and personnel. The Board of Trustees also
considered the conflicts of interest inherent in Citibank's recommendation that
its affiliates be hired as subadvisers.
The Board of Trustees also considered that under circumstances in which
best price and execution may be obtained from more than one broker or dealer,
each subadviser may, in its discretion, purchase and sell securities through
dealers who provide research, statistical and other information to the
subadviser. Although certain research, market and statistical information from
brokers and dealers can be useful to the Funds and subadviser, each subadviser
has advised that such information is, in its opinion, only supplementary to the
subadviser's own research activities and the information must still be
analyzed, weighed and reviewed by the subadviser. It was noted that such
information may be useful to the subadvisers in providing services to clients
other than CitiSelect VIP Folios 200-500. Conversely, it was noted that
information provided to the subadvisers by brokers and dealers through whom
other clients of the subadvisers effect securities transactions may be useful
to the subadvisers in providing services to these Funds.
Based upon its review, the Board of Trustees of the Funds concluded
that each of the Sub-Management Agreements is reasonable, fair and in the best
interests of each of CitiSelect VIP Folios 200-500 and their respective
shareholders, and that the fees provided in each of the Sub-Management
Agreements 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 Funds, including all of the
Independent Trustees, unanimously approved each of the Sub-Management\Agreements
and voted to recommend their approval by the shareholders of each of
CitiSelect VIP Folios 200-500.
VOTE REQUIRED
Approval of a Sub-Management Agreement with respect to a Fund will
require the approval of "a majority of the outstanding voting securities" of
that Fund. This requires approval by the holders of 67% or more of the
outstanding voting securities of the Fund which are present at the Meeting if
the holders of more than 50% of such voting securities are present in person or
by proxy, or more than 50% of the outstanding voting securities of the Fund,
whichever is less.
In the event that a Sub-Management Agreement does not receive the
requisite approval, Citibank would (a) manage all of the assets of the
applicable Fund 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.
<PAGE>
THE BOARD OF DIRECTORS OF FIRST CITICORP LIFE UNANIMOUSLY RECOMMENDS
THAT CONTRACT HOLDERS OF EACH SUBACCOUNT AND THEIR PARTICIPANTS VOTE FOR
APPROVAL OF THE SUB-MANAGEMENT AGREEMENT WITH MMC, FOR APPROVAL OF THE
SUB-MANAGEMENT AGREEMENT WITH SBAM AND FOR APPROVAL OF THE SUB-MANAGEMENT
AGREEMENT WITH SBAMINC.
ITEM 4. TO INSTRUCT FIRST CITICORP LIFE TO VOTE ON AN AMENDMENT TO
THE TRUST'S DECLARATION OF TRUST TO ALLOW THE ASSETS OF EACH
FUND TO BE INVESTED IN ONE OR MORE INVESTMENT COMPANIES TO
THE EXTENT NOT PROHIBITED BY THE 1940 ACT.
It is proposed that the Funds' Declaration of Trust be amended to
permit the Funds to invest in other investment companies to the extent not
prohibited by the 1940 Act.
The Funds' Declaration of Trust presently permits each Fund to invest
all of its investable assets in a single investment company that is registered
under the 1940 Act. As described above, recent amendments to the 1940 Act
permit mutual funds to invest their investable assets in multiple registered
investment companies so long as certain conditions are met. There also may be
additional amendments to the 1940 Act in the future which affect mutual funds'
ability to invest in other funds.
The proposed amendments to the Funds' Declaration of Trust which appear
below will allow the Funds to take advantage of the recent changes in law, as
well as future changes in law or regulation on this topic. These amendments
will also permit the Funds to enter into the proposed restructuring described
under "General Background" above. The Funds' Board of Trustees believes that
these amendments will be to the Funds' advantage and are in the best interests
of the shareholders of each Fund. See "General Background" above. It is
proposed that Section 3.2(c) of the Declaration of Trust be amended by deleting
the words below that have been marked through [bracketed for filing purposes]
and adding the italicized words [[double brackets for filing purposes]]:
(c) Notwithstanding any other provision of this Declaration to
the contrary, the Trustees shall have the power in their discretion
without any requirement of approval by shareholders to either invest
all or a portion of the Trust Property, or sell all or a portion of
such Trust Property and invest the proceeds of such sales, in [another
investment company that is registered under the 1940 Act] [[one or more
investment companies to the extent not prohibited by the 1940 Act and
exemptive orders granted under such Act]].
<PAGE>
Under the Declaration of Trust, the 1940 Act is defined to include both
that Act itself and the rules and regulations under that Act; the amendment
would be based on that definition.
VOTE REQUIRED
Approval of the amendment to the Declaration of Trust with respect to
each Fund will require the approval of "a majority of the outstanding voting
securities" (as defined under "Vote Required" in Items 1, 2 and 3 above) of
that Fund.
THE BOARD OF DIRECTORS OF FIRST CITICORP LIFE UNANIMOUSLY RECOMMENDS
THAT CONTRACT HOLDERS OF EACH SUBACCOUNT AND THEIR PARTICIPANTS VOTE FOR
APPROVAL OF THE PROPOSED AMENDMENT TO THE DECLARATION OF TRUST.
ITEM 5. TO INSTRUCT FIRST CITICORP LIFE TO VOTE WITH RESPECT TO
THE APPROVAL OF AN AMENDMENT TO THE FUNDAMENTAL INVESTMENT
POLICIES OF EACH FUND TO ALLOW THE ASSETS OF THAT FUND TO BE
INVESTED IN ONE OR MORE INVESTMENT COMPANIES TO THE EXTENT
NOT PROHIBITED BY THE 1940 ACT.
Each Fund has adopted certain fundamental investment restrictions
which, as a matter of law, cannot be changed without the approval of the
shareholders of the Funds. Certain of these fundamental investment restrictions
currently permit each Fund to invest its investable assets in a single
investment company having the same investment objectives and policies and
substantially the same investment restrictions as that Fund. As noted above,
recent amendments to the 1940 Act permit mutual funds to invest their
investable assets in multiple investment companies so long as certain
conditions are met. There may be future amendments to the 1940 Act affecting
mutual funds' ability to invest in other funds.
In order to take advantage of the flexibility of current and future
applicable law and regulation and to permit the Funds to enter into the
restructuring, it is proposed that each of the fundamental investment
restrictions listed in Exhibit D be amended as indicated in that Exhibit.
Contract Holders also should review Item 7 for additional proposed changes to
these investment restrictions.
VOTE REQUIRED
Because the investment restrictions in Exhibit D are fundamental
policies of each Fund, approval of this proposal with respect to a Fund will
require the approval of "a majority of the outstanding voting securities" (as
defined under "Vote Required" in Items 1, 2 and 3 above) of that Fund.
<PAGE>
THE BOARD OF DIRECTORS OF FIRST CITICORP LIFE UNANIMOUSLY RECOMMENDS
THAT CONTRACT HOLDERS OF EACH SUBACCOUNT AND THEIR PARTICIPANTS VOTE FOR
APPROVAL OF THE PROPOSED AMENDMENT TO THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES, TO ALLOW THE ASSETS OF EACH FUND TO BE INVESTED IN ONE OR MORE
INVESTMENT COMPANIES TO THE EXTENT NOT PROHIBITED BY THE 1940 ACT.
ITEM 6. TO INSTRUCT FIRST CITICORP LIFE TO VOTE ON AUTHORIZING THE
TRUSTEES OF THE FUNDS TO SELECT AND CHANGE INVESTMENT
SUBADVISERS AND ENTER INTO INVESTMENT SUBADVISORY AGREEMENTS
WITHOUT OBTAINING THE APPROVAL OF SHAREHOLDERS.
As discussed above, Citibank currently employs subadvisers for the
CitiSelect VIP Folios to perform the daily management of particular asset
classes. See "General Background." Citibank monitors and supervises the
activities of the subadvisers, and may terminate the services of any subadviser
at any time. However, retaining the services of a new subadviser, and retaining
the services of a replacement subadviser for longer than an interim period,
currently require the approval of the shareholders of the Funds.
Citibank itself currently manages the assets of CitiFunds Small Cap
Growth VIP Portfolio, but Citibank may decide in the future that it may
maximize the Fund's chances of achieving its investment objective if one or
more subadvisers are hired. Retaining the services of a subadviser, and
replacing that subadviser, would require the approval of the shareholders of
the Funds.
The 1940 Act requires that all contracts pursuant to which persons
serve as investment advisers to investment companies be approved by
shareholders. This requirement would apply to the appointment of a new or
replacement subadviser to any Fund. (There is an exception to this requirement
that permits, under certain circumstances, entities to serve as replacement
investment advisers or subadvisers for an interim period without the approval
of the shareholders of the fund if their contracts have been approved by fund
directors or trustees. MMC and SBAM are or will be serving as subadvisers to
the CitiSelect VIP Folios pursuant to this exception.) This requirement also
would apply to the appointment of a new or replacement subadviser to any New
Portfolio following the proposed restructuring and the organization of that New
Portfolio. Absent exemptive relief from the Securities and Exchange Commission,
investors in a New Portfolio (i.e., Funds) would be asked to approve the
advisory contract for the new subadviser. The Funds would then seek approval of
the contract from their shareholders. The Securities and Exchange Commission
has previously granted conditional exemptions from these voting requirements.
If the Funds were to obtain similar exemptive relief and this proposed Item 6
is approved, the Board of Trustees would be able, without further approval of
the shareholders of the Funds, to appoint additional or replacement
subadvisers. The Trustees would not, however, be able to replace Citibank as
<PAGE>
investment manager without complying with the 1940 Act and applicable
regulations governing the approval of advisory contracts by the shareholders of
the Funds.
This Item 6 is intended to facilitate the efficient supervision and
management of the CitiSelect VIP Folios' subadvisers by Citibank and the
Trustees, and to give Citibank flexibility in managing CitiFunds Small Cap
Growth VIP Portfolio in the future. Citibank continuously monitors the
performance of the subadvisers and, as is evidenced by Items 1 through 3 of
this Proxy Statement, may from time to time recommend that the Board of
Trustees replace one or more subadvisers or appoint additional subadvisers,
depending on Citibank's assessment of what combination of subadvisers it
believes will optimize each Fund's chances of achieving its investment
objective. As Items 1 through 3 show, Citibank currently is required to obtain
the approval of the shareholders of the Funds to add or replace a subadviser.
If the Funds were to obtain exemptive relief and the shareholders of the Funds
were to approve this proposed Item 6, the Trustees would no longer be required
to call a Fund meeting of the shareholders of the Funds each time a new
subadviser is appointed.
These meetings entail substantial costs which could diminish the
benefits of the current subadvisory arrangements. These costs must be weighed
against the benefits of scrutiny of the shareholders of the Funds of proposed
contracts with additional or replacement subadvisers. However, even in the
absence of approval of the shareholders of the Funds, any proposal to add or
replace subadvisers would receive careful review. First, Citibank would assess
a Fund's needs and, if it believed additional or replacement subadvisers could
benefit the Fund, would search for available investment subadvisers. Second,
any recommendations made by Citibank would have to be approved by a majority of
the Trustees, including a majority of the Trustees who are not "interested
persons" within the meaning of the 1940 Act. In selecting any new or
replacement subadvisers, the Trustees are required to determine that an
investment management agreement with the subadviser is reasonable, fair and in
the best interests of a fund and its shareholders, and that the fees provided
in the agreement are fair and reasonable in light of the usual and customary
charges made by others for services of the same nature and quality. Finally,
any further appointments of additional or replacement subadvisers would have to
comply with any conditions contained in the Securities and Exchange Commission
exemptive order, if such order is granted.
The Trustees believe that the proposed authority to select and change
investment subadvisers and enter into investment subadvisory agreements without
obtaining the approval of the shareholders of the Funds is in the best
interests of the shareholders of each Fund.
<PAGE>
VOTE REQUIRED
Approval of this proposal with respect to a Fund will require the
approval of "a majority of the outstanding securities" (as defined under "Vote
Required" in Items 1, 2 and 3 above) of that Fund.
THE BOARD OF DIRECTORS OF FIRST CITICORP LIFE UNANIMOUSLY RECOMMENDS
THAT CONTRACT HOLDERS OF EACH SUBACCOUNT AND THEIR PARTICIPANTS VOTE FOR
AUTHORIZING THE TRUSTEES OF THE TRUST TO SELECT AND CHANGE INVESTMENT
SUBADVISERS AND ENTER INTO INVESTMENT SUBADVISORY AGREEMENTS WITHOUT OBTAINING
THE APPROVAL OF SHAREHOLDERS OF THE FUNDS.
ITEM 7. TO INSTRUCT FIRST CITICORP LIFE TO VOTE ON AN AMENDMENT TO
THE FUNDAMENTAL INVESTMENT POLICIES OF EACH FUND CONCERNING
THAT FUND'S ABILITY TO MAKE LOANS TO OTHER PERSONS AND TO BUY
OR SELL FUTURES CONTRACTS AND OPTIONS ON FUTURES.
As noted above in Item 5, each Fund has adopted certain fundamental
investment restrictions which, as a matter of law, cannot be changed without
the approval of shareholders of the Funds. One of these fundamental investment
restrictions concerns each Fund's ability to make loans to other persons. The
Funds are proposing a technical amendment to this restriction to clarify that
the purchase of fixed time deposits would not be a violation of this
restriction.
Certain other of the Funds' fundamental investment restrictions could
be construed to limit the Funds' ability to buy or sell futures contracts and
options on futures. The Funds are proposing technical amendments to these
restrictions to clarify this point. The proposed amendments will clarify that
each Fund's ability to buy or sell futures contracts and options on futures is
consistent with that described in that Fund's prospectus.
CitiSelect VIP Folios 200-500 are proposing to delete language
concerning collateral arrangements with respect to futures contracts and
options on futures from their fundamental investment restriction concerning the
issuance of senior securities. The Funds believe that this language is not
required as a matter of law, and adds nothing to the investment restriction
which does not already appear therein. Even though the language will be deleted
from the investment restrictions, the Funds will continue to provide collateral
with respect to options, futures contracts and options on futures contracts to
the extent required by applicable rules and regulations.
To give effect to these technical amendments, it is proposed that each
of the fundamental investment restrictions listed in Exhibit E be amended as
indicated in that Exhibit. Contract Holders should note that Exhibit E assumes
that Item 5 has been approved.
<PAGE>
The Trustees believe that these proposed amendments to the fundamental
investment policies are in the best interests of the shareholders of each Fund.
VOTE REQUIRED
Because the investment restrictions in Exhibit E are fundamental
policies of each Fund, approval of this proposal with respect to a Fund will
require the approval of "a majority of the outstanding securities" (as defined
under "Vote Required" in Items 1, 2 and 3 above) of that Fund.
THE BOARD OF DIRECTORS OF FIRST CITICORP LIFE UNANIMOUSLY RECOMMENDS
THAT CONTRACT HOLDERS OF EACH SUBACCOUNT AND THEIR PARTICIPANTS VOTE FOR
APPROVAL OF THE PROPOSED AMENDMENT TO THE FUNDS' FUNDAMENTAL INVESTMEnT
POLICIES CONCERNING THE FUNDS' ABILITY TO MAKE LOANS TO OTHER PERSONS AND TO
BUY OR SElL FUTURES CONTRACTS AND OPTIONS ON FUTURES.
ITEM 8. TO INSTRUCT FIRST CITICORP LIFE TO ELECT HEATH B. MCLENDON
AS A TRUSTEE OF THE FUNDS.
The Funds are proposing that Heath B. McLendon be elected as a Trustee
of the Funds, to hold office until his successors are chosen and qualified. Mr.
McLendon, Chairman, President and Chief Executive Officer of Mutual Management
Corp., the Citibank affiliate whose Sub-Management Agreement is being submitted
for approval in Item 1, was appointed by the Board in February, 1999 and
currently serves as a Trustee. Mr. McLendon has not been elected by the
shareholders of the Funds. The remaining Trustees were previously elected by
the shareholders of the Funds. Mr. McLendon will continue to serve as a Trustee
whether or not shareholders of the CitiSelect VIP Folios approve Item 1.
The following information shows the Trustees and the executive officers
of the Funds and their principal occupations which, unless otherwise specified,
are of more than five years duration, although the titles held may have varied
during that period. Each Trustee and officer is also a Trustee or officer of
certain other funds for which CFBDS, Inc., the Funds' distributor, or an
affiliate, serves as the distributor or for which Citibank serves as investment
adviser. Asterisks indicate those Trustees and officers who are "interested
persons," as defined in the 1940 Act, of the Funds.
TRUSTEES OF THE TRUST
ELLIOTT J. BERV (aged 55) - Trustee (since November 1996); Chairman and
Director, Catalyst, Inc. (Management Consultants) (since June 1992); President,
Chief Operating Officer and Director, Deven International, Inc. (International
Consultants) (June 1991 to June 1992); President and Director, Elliott J. Berv
<PAGE>
& Associates (Management Consultants) (since May 1984).
PHILIP W. COOLIDGE* (aged 47) -- Trustee (since November 1996); President of
the Funds; Chief Executive Officer and President, Signature Financial Group,
Inc. and CFBDS.
MARK T. FINN (aged 55) -- Trustee (since November 1996); President and
Director, Delta Financial, Inc. (since June 1983); Chairman of the Board and
Chief Executive Officer, FX 500 Ltd. (Commodity Trading Advisory Firm) (since
April 1990); General Partner and Shareholder, Greenwich Ventures LLC
(Investment Partnership) (since January 1996); President and Secretary, Phoenix
Trading Co. (Commodity Trading Advisory Firm) (since March 1997); Director,
Vantage Consulting Group, Inc. (since October 1988).
RILEY C. GILLEY (aged 72) -- Trustee (since November 1996); Vice President and
General Counsel, Corporate Property Investors (November 1988 to December 1991);
Partner, Breed, Abbott & Morgan (Attorneys) (retired, December 1987).
DIANA R. HARRINGTON (aged 58) -- Trustee (since November 1996); Professor,
Babson College (since September 1993); Visiting Professor, Kellogg Graduate
School of Management, Northwestern University (September 1992 to September
1993); Professor, Darden Graduate School of Business, University of Virginia
(September 1978 to September 1993); Trustee, the Highland Family of Funds
(March 1997 to March 1998).
SUSAN B. KERLEY (aged 47) -- Trustee (since November 1996); President, Global
Research Associates, Inc. (Investment Research) (since August 1990); Manager,
Rockefeller & Co. (March 1988 to July 1990); Trustee, Mainstay Institutional
Funds (since December 1990).
HEATH B. MCLENDON* (aged 65) - Trustee (since February 1999); Chairman,
President and Chief Executive Officer of Mutual Management Corp. (since ___);
Managing Director of Salomon Smith Barney (since ___).
C. OSCAR MORONG, JR. (aged 63) -- Trustee (since November 1996); Managing
Director, Morong Capital Management (since February 1993); Senior Vice
President and Investment Manager, CREF Investments, Teachers Insurance &
Annuity Association (retired January 1993); Director, Indonesia Fund; Director,
MAS Funds.
<PAGE>
WALTER E. ROBB, III (aged 72) -- Trustee (since November 1996); President,
Benchmark Consulting Group, Inc. (since 1991); Principal, Robb Associates
(Corporate Financial Advisors) (since 1978); President, Benchmark Advisors,
Inc. (Corporate Financial Advisors) (since 1989); Trustee of certain registered
investment companies in the MFS Family of Funds.
E. KIRBY WARREN (aged 64) -- Trustee (since November 1996); Professor of
Management, Graduate School of Business, Columbia University (since 1987);
Samuel Bronfman Professor of Democratic Business Enterprise (1978 to 1987).
WILLIAM S. WOODS, JR. (aged 78) -- Trustee (since November 1996); Vice
President-Investments, Sun Company, Inc. (retired, April 1984).
OFFICERS OF THE TRUST
PHILIP W. COOLIDGE* (aged 47) -- President of the Funds (since October 1996);
Chief Executive Officer and President, Signature Financial Group, Inc. and
CFBDS.
CHRISTINE A. DRAPEAU* (aged 28) -- Assistant Secretary and Assistant Treasurer
of the Funds (since October 1996); Vice President, Signature Financial Group,
Inc. (since January 1996); Paralegal and Compliance Officer, various financial
companies (July 1992 to January 1996).
TAMIE EBANKS-CUNNINGHAM* (aged 26) -- Assistant Secretary of the Funds (since
January 1998); Office Manager, Signature Financial Group, (Grand Cayman)
Limited (Since April 1995); Administrator, Cayman Islands Primary School (prior
to April 1995).
JOHN R. ELDER* (aged 50) -- Treasurer of the Funds (since October 1996); Vice
President, Signature Financial Group, Inc. (since April 1995); Assistant
Treasurer, CFBDS (since April 1995); Treasurer, the Phoenix Family of Mutual
Funds (Phoenix Home Life Mutual Insurance Company) (1983 to March 1995).
LINDA T. GIBSON* (aged 33) -- Secretary of the Funds (since October 1996);
Senior Vice President, Signature Financial Group, Inc.; Secretary, CFBDS.
JAMES E. HOOLAHAN* (aged 51) -- Vice President, Assistant Secretary and
Assistant Treasurer of the Funds (since October 1996); Senior Vice President,
Signature Financial Group, Inc.
SUSAN JAKUBOSKI* (aged 34) -- Vice President, Assistant Secretary and Assistant
Treasurer of the Funds (since October 1996); Vice President, Signature
Financial Group (Cayman) Ltd. (since August 1994); Fund Compliance
Administrator, Concord Financial Group (November 1990 to August 1994).
<PAGE>
MOLLY S. MUGLER* (aged 47) -- Assistant Secretary and Assistant Treasurer of
the Funds (since October 1996); Vice President, Signature Financial Group,
Inc.; Assistant Secretary, CFBDS.
CLAIR TOMALIN* (aged 30) -- Assistant Secretary of the Funds (since January
1998); Office Manager, Signature Financial Group (Europe) Limited.
SHARON M. WHITSON* (aged 50) -- Assistant Secretary and Assistant Treasurer of
the Funds (since October 1996); Assistant Vice President, Signature Financial
Group, Inc.
JULIE J. WYETZNER* (aged 39) -- Vice President, Assistant Secretary and
Assistant Treasurer of the Funds (since October 1996); Vice President,
Signature Financial Group, Inc.
Trustees who serve on the boards of investment companies in the
CitiFunds family of funds are compensated for their services on a complex-wide
basis. Only those Trustees who are not affiliated with the Funds' distributor
or Citibank receive compensation from the CitiFunds (including the Funds). The
following table shows the compensation paid to the Trustees by the Funds and
the other CitiFunds during the fiscal years ended December 31, 1998.
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
The Funds' Trustees received the following remuneration from the Funds
as a whole during their fiscal year ended December 31, 1998:
<S> <C> <C> <C> <C>
PENSION OR TOTAL
RETIREMENT COMPENSATION
BENEFITS ESTIMATED FROM
AGGREGATE ACCRUED ANNUAL REGISTRANT
NAME OF COMPENSATION AS PART OF BENEFITS AND FUND
PERSON, FROM FUND UPON COMPLEX PAID
POSITION REGISTRANT (1) EXPENSES RETIREMENT TO TRUSTEES (1)
Elliott J. Berv $3,409.27 None None $53,750.00
Philip W.
Coolidge None None None None
Mark T. Finn $3,389.53 None None $52,000.00
Riley C. Gilley $3,384.44 None None $41,500.00
Diana R.
Harrington $3,545.56 None None $59,000.00
Susan B. Kerley $3,513.95 None None $55,000.00
C. Oscar Morong,
Jr. $3,669.31 None None $71,000.00
Walter E. Robb,
III $3,395.04 None None $50,000.00
E. Kirby Warren $3,483.71 None None $49,000.00
William S.
Woods, Jr. $3,484.86 None None $54,000.00
</TABLE>
___________________________
(1) Information relates to the fiscal years ended December 31, 1998.
Messrs. Berv, Coolidge, Finn, Gilley, Morong, Robb, Warren and Woods and
Mses. Harrington and Kerley are trustees of 27, 49, 26, 33, 40, 30, 40, 26,
28 and 28 funds, respectively, in the family of open-end registered
investment companies advised or managed by Citibank.
The Board of Trustees met _____ times during the period commencing
January 1, 1998 and ending December 31, 1998. The Board has created a standing
Audit Committee, currently comprised of Ms. Kerley and Messrs. Gilley, Warren
and Woods, none of whom is an "interested person," as defined in the 1940 Act,
of the Funds or their administrator or distributor or of Citibank. The Audit
Committee met _____ times during the period commencing January 1, 1998 and
ending December 31, 1998 to review the internal and external accounting
procedures of the Funds and, among other things, to consider the selection of
independent certified public accountants for the Funds, to approve all
significant services proposed to be performed by its independent certified
public accountants and to consider the possible effect of such services on
their independence. The Board has also created a standing Performance & Review
Committee, currently comprised of Ms. Harrington and Messrs. Berv, Finn and
<PAGE>
Robb, none of whom is an "interested person" of the Funds or their
administrator or distributor or of Citibank. The Performance & Review Committee
met _____ times during the period commencing January 1, 1998 and ending
December 31, 1998. Each Trustee attended at least 75% of all Board and
applicable committee meetings.
The Funds' Declaration of Trust provides that they will indemnify their
Trustees and officers against all liabilities and expenses incurred or paid in
connection with litigation in which they may be involved because of their
offices with the Funds, unless, with respect to liability to shareholders of
the Funds, it is finally adjudicated that they engaged in willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of their offices, or unless with respect to any other matter it is
finally adjudicated that they did not act in good faith in the reasonable
belief that their actions were in the best interest of the Funds. In the case
of settlement, such indemnification will not be provided unless it has been
determined by a court or other body approving the settlement or other
disposition, or by a reasonable determination, based upon a review of readily
available facts, by vote of a majority of disinterested Trustees or in a
written opinion of independent counsel, that such Trustees or officers have not
engaged in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their offices.
VOTE REQUIRED
Election of Mr. McLendon as a Trustee will require approval by the
holders of a majority of the outstanding securities of the Funds, taken
together as a single class, which are present at the Meeting in person or by
proxy.
THE BOARD OF DIRECTORS OF FIRST CITICORP LIFE UNANIMOUSLY RECOMMENDS
THAT CONTRACT HOLDERS OF EACH SUBACCOUNT AND THEIR PARTICIPANTS VOTE FOR THE
ELECTION OF HEATH B. MCLENDON AS A TRUSTEE OF THE FUNDS.
ITEM 9. TO INSTRUCT FIRST CITICORP LIFE TO VOTE ON THE SELECTION
OF PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS FOR EACH FUND.
It is intended that proxies cast by each Fund's shareholders not
limited to the contrary will be voted in favor of ratifying the selection, by a
majority of the Trustees of the Funds who are not "interested persons" (as that
term is defined in the 1940 Act) of the Funds, of PricewaterhouseCoopers LLP
under Section 32(a) of the 1940 Act as independent public accountants, to
certify every financial statement of each Fund required by any law or
regulation to be certified by independent public accountants and filed with the
Securities and Exchange Commission in respect of all or any part of the fiscal
year of the Fund ending December 31, 1999. PricewaterhouseCoopers LLP has no
direct or material indirect interest in any Fund.
<PAGE>
PricewaterhouseCoopers LLP has served as the Funds' independent
certified public accountants since their commencement of operations, providing
audit services and consultation with respect to the preparation of filings with
the Securities and Exchange Commission.
Representatives of PricewaterhouseCoopers LLP [are expected to be
present at the Meeting and are expected to be available to respond to
appropriate questions. Representatives of PricewaterhouseCoopers LLP are
expected to have the opportunity to make a statement if they desire to do so.]
VOTE REQUIRED
Approval of this proposal with respect to a Fund will require approval
by the holders of a majority of the outstanding securities of that Fund which
are present at the Meeting in person or by proxy.
THE BOARD OF DIRECTORS OF FIRST CITICORP LIFE UNANIMOUSLY RECOMMENDS
THAT CONTRACT HOLDERS OF EACH SUBACCOUNT AND THEIR PARTICIPANTS VOTE FOR
APPROVAL OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS FOR EACH FUND.
ITEM 10. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE SPECIAL MEETING OF CONTRACT HOLDERS AND ANY
ADJOURNMENTS THEREOF.
The management of First Citicorp Life 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.
INTERESTS OF CERTAIN PERSONS
As of __________ __, 1999, no Director or officer of First Citicorp
Life owned beneficially or had the right to vote any outstanding unit interests
of the Subaccounts.
As of __________ __, 1999, First Citicorp Life owned of record _____%
of the outstanding unit interests of the Subaccounts.
ADDITIONAL INFORMATION
Each Subaccount is a subaccount of First Citicorp Life Variable Annuity
Separate Account, which is registered with the Securities and Exchange
Commission as a unit investment trust under the Investment Company Act of 1940.
The First Citicorp Life Variable Annuity Separate Account was established by
First Citicorp Life as a separate account on July 6, 1994. The mailing address
<PAGE>
of First Citicorp Life Variable Annuity Separate Account is 666 Fifth Avenue,
3rd Floor, New York, New York 10103.
The cost of soliciting proxies in the accompanying form, which is
expected to be approximately $____________, including the fees of a proxy
soliciting agent, will be borne by Citibank. In addition to solicitation by
mail, proxies may be solicited by the Board of Directors, officers, and regular
employees and agents of the First Citicorp Life without compensation therefor.
Citibank may reimburse brokerage firms and others for their expenses in
forwarding proxy materials to the beneficial owners and soliciting them to
execute the proxies.
The distributor of the Contracts is CFBDS, Inc., 21 Milk Street,
Boston, Massachusetts 02109. State Street Bank and Trust Company acts as
transfer agent, dividend disbursing agent and custodian for each Fund. The
principal business address of State Street is 225 Franklin Street, Boston,
Massachusetts 02110.
SUBMISSION OF CERTAIN PROPOSALS
Variable Annuity Portfolios is a Massachusetts business trust and as
such is not required to hold annual meetings of shareholders, although special
meetings may be called for purposes such as electing Trustees or removing
Trustees, changing fundamental policies, or approving an advisory contract.
Contract Holder proposals to be presented at any subsequent meeting of Contract
Holders must be received by First Citicorp Life at its office within a
reasonable time before the proxy solicitation is made.
YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Directors,
[Name]
[Title]
February 17, 1999
<PAGE>
EXHIBIT A
SUB-MANAGEMENT AGREEMENT
VARIABLE ANNUITY PORTFOLIOS
SUB-MANAGEMENT AGREEMENT, dated as of January 22, 1999, by and between
Variable Annuity Portfolios, a Massachusetts business trust (the "Trust"), and
Mutual Management Corp., a Delaware corporation (the "Subadviser").
W I T N E S S E T H:
WHEREAS, Citibank, N.A. (the "Manager") has been retained by the Trust
to act as investment adviser to the Trust with respect to the series of the
Trust designated as CitiSelect(R) VIP Folio 200, CitiSelect(R) VIP Folio 300,
CitiSelect(R) VIP Folio 400 and CitiSelect(R) VIP Folio 500 (each individually
a "Fund" and collectively the "Funds"), 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 has requested that the Trust engage the Subadviser
to provide certain investment advisory services for the Funds, and the
Subadviser is willing to provide such investment advisory services for the
Funds 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 Trust hereby appoints the Subadviser to act as subadviser with
respect to each of the Funds 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 Funds for the compensation provided by
this Agreement.
2. Duties of the Subadviser. The Subadviser shall provide the Funds and
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 Fund's investment assets as the Manager may designate from time to time.
Notwithstanding any provision of this Agreement, the Manager shall retain all
<PAGE>
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 Fund allocated by the Manager to the Subadviser shall be
held uninvested, subject always to the restrictions of the Trust's Declaration
of Trust, dated October 25, 1996, 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 Fund, 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 Fund and what portion, if
any, of the assets of a Fund 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 Fund'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 Fund 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.
The Subadviser shall take, on behalf of each Fund, 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 Fund'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 Fund as to deliveries
of securities and payments of cash for the account of that Fund. 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 Fund 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 Fund
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
<PAGE>
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
Fund to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Fund. In making purchases or
sales of securities or other property for the account of a Fund, 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 Fund all of its own expenses allocable to that Fund including, without
limitation, organization costs of the Fund; 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 shares of beneficial interests and
servicing shareholder accounts; expenses of preparing, typesetting, printing
and mailing shareholder reports, notices, proxy statements and reports to
governmental officers and commissions and to shareholders in the Fund; expenses
connected with the execution, recording and settlement of security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of the Fund (including but not limited to the fees of independent pricing
services); expenses of meetings of the Fund's shareholders; expenses relating
to the issuance of shares of beneficial interests in the Fund; 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 Fund may
be a party and the legal obligation which the Trust may have to indemnify its
Trustees and officers with respect thereto.
4. Compensation of the Subadviser. For the services to be rendered by
the Subadviser hereunder, the Trust shall pay to the Subadviser from the assets
of the Funds pro rata 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 Funds allocated to the Subadviser:
<PAGE>
0.65% on the first $10 million;
0.50% on the next $10 million;
0.40% on the next $10 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.
If in any fiscal year the aggregate expenses of a Fund 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 Fund
and any fund investing its assets therein, the Trust 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.
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 Fund, except as permitted by
the 1940 Act, will not take a long or short position in shares of beneficial
interests of a Fund 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 Fund 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 Fund, 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 Manager 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
Funds are not to be deemed to be exclusive, the Subadviser being free to render
<PAGE>
investment advisory and/or other services to others, including accounts or
investment management companies with similar or identical investment objectives
to the Funds. It is understood that Trustees, officers, and shareholders 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 a shareholder 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 January 22, 2001, on which date it will terminate unless
its continuance after January 22, 2001 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 Fund.
This Agreement may be terminated as to any Fund 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 Fund, 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 Fund at any time without the
payment of any penalty by the Subadviser on not less than 90 days' written
notice to the Trust and the Manager. This Agreement shall automatically
terminate in the event of its "assignment." Termination of this Agreement as to
any Fund shall not terminate this Agreement as it applies to the remaining
Funds.
This Agreement constitutes the entire agreement between the parties and
may be amended as to any Fund only if such amendment is approved by the
Subadviser and the "vote of a majority of the outstanding voting securities" of
that Fund (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 Fund shall not, without more, amend such
term with respect to any other Fund.
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.
<PAGE>
Each party acknowledges and agrees that all obligations of the Trust
under this Agreement are binding only with respect to the particular Fund to
which a particular obligation relates; that any liability of the Trust under
this Agreement, or in connection with the transactions contemplated herein,
shall be discharged only out of the assets of the particular Fund to which a
particular obligation relates; and that no other Fund or other series of the
Trust shall be liable with respect to this Agreement or in connection with the
transactions contemplated herein.
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, and the obligations of this Agreement are not binding upon any of
the Trustees, officers or shareholders of the Trust individually.
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.
10. Override Provisions. Notwithstanding any other provision of this
Agreement, prior to this Agreement being approved by investors in the Funds in
accordance with the 1940 Act, in no event shall the compensation paid to the
Subadviser hereunder exceed the amount permitted by Rule 15a-4 under the 1940
Act.
<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.
VARIABLE ANNUITY PORTFOLIOS MUTUAL MANAGEMENT
on behalf of CitiSelect(R) VIP Folio 200, CORP.
CitiSelect(R) VIP Folio 300, CitiSelect(R)
VIP Folio 400 and CitiSelect(R) VIP
Folio 500
By: _______________________________ By:________________________
Title:_____________________________ Title:_____________________
The foregoing is acknowledged:
Citibank, N.A.
By:_______________________________
Title:_____________________________
<PAGE>
EXHIBIT B
SUB-MANAGEMENT AGREEMENT
VARIABLE ANNUITY PORTFOLIOS
SUB-MANAGEMENT AGREEMENT, dated as of March 1, 1999, by and between
Variable Annuity Portfolios, a Massachusetts business trust (the "Trust"), and
Salomon Brothers Asset Management Limited, a British limited liability private
corporation (the "Subadviser").
W I T N E S S E T H:
WHEREAS, Citibank, N.A. (the "Manager") has been retained by the Trust
to act as investment adviser to the Trust with respect to the series of the
Trust designated as CitiSelect(R) VIP Folio 200, CitiSelect(R) VIP Folio 300,
CitiSeLect(R) VIP Folio 400 and CitiSelect(R) VIP Folio 500 (each individually
a "Fund" and collectively the "Funds"), 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 has requested that the Trust engage the Subadviser
to provide certain investment advisory services for the Funds, and the
Subadviser is willing to provide such investment advisory services for the
Funds 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 Trust hereby appoints the Subadviser to act as subadviser with
respect to each of the Funds 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 Funds for the compensation provided by
this Agreement.
2. Duties of the Subadviser. The Subadviser shall provide the Funds and
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
<PAGE>
each Fund'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 Fund allocated by the Manager to the Subadviser shall be
held uninvested, subject always to the restrictions of the Trust's Declaration
of Trust, dated October 18, 1996, and By-laws, as each may be amended and
restated 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 Fund, 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 Fund and what portion, if any, of the assets of a Fund 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 Fund'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 Fund 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.
The Subadviser shall take, on behalf of each Fund, 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 Fund'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 Fund as to deliveries
of securities and payments of cash for the account of that Fund. 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 Fund 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 Fund
<PAGE>
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
Fund to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Fund. In making purchases or
sales of securities or other property for the account of a Fund, 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 Fund all of its own expenses allocable to that Fund including, without
limitation, organization costs of the Fund; 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 shares of beneficial interests and
servicing shareholder accounts; expenses of preparing, typesetting, printing
and mailing shareholder reports, notices, proxy statements and reports to
governmental officers and commissions and to shareholders in the Fund; expenses
connected with the execution, recording and settlement of security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of the Fund (including but not limited to the fees of independent pricing
services); expenses of meetings of the Fund's shareholders; expenses relating
to the issuance of shares of beneficial interests in the Fund; 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 Fund may
be a party and the legal obligation which the Trust may have to indemnify its
Trustees and officers with respect thereto.
4. Compensation of the Subadviser. For the services to be rendered by
the Subadviser hereunder, the Trust shall pay to the Subadviser from the assets
of the Funds pro rata an investment subadvisory fee, accrued daily and paid
<PAGE>
monthly, at an annual rate equal to the percentages specified below of the
aggregate assets of all Funds allocated to the Subadviser:
0.30% on the first $200 million;
0.25% on assets over $200 million.
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.
If in any fiscal year the aggregate expenses of a Fund 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 Fund
and any fund investing its assets therein, the Trust 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.
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 Fund, except as permitted by
the 1940 Act, will not take a long or short position in shares of beneficial
interests of a Fund 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 Fund 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 Fund, 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 Manager 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.
<PAGE>
7. Activities of the Subadviser. The services of the Subadviser to the
Funds 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 Funds. It is understood that Trustees, officers, and shareholders 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 a shareholder 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 March 1, 2001, on which date it will terminate unless its
continuance after March 1, 2001 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 Fund.
This Agreement may be terminated as to any Fund 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 Fund, 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 Fund at any time without the
payment of any penalty by the Subadviser on not less than 90 days' written
notice to the Trust and the Manager. This Agreement shall automatically
terminate in the event of its "assignment." Termination of this Agreement as to
any Fund shall not terminate this Agreement as it applies to the remaining
Funds.
This Agreement constitutes the entire agreement between the parties and
may be amended as to any Fund only if such amendment is approved by the
Subadviser and the "vote of a majority of the outstanding voting securities" of
that Fund (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 Fund shall not, without more, amend such
term with respect to any other Fund.
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.
<PAGE>
Each party acknowledges and agrees that all obligations of the Trust
under this Agreement are binding only with respect to the particular Fund to
which a particular obligation relates; that any liability of the Trust under
this Agreement, or in connection with the transactions contemplated herein,
shall be discharged only out of the assets of the particular Fund to which a
particular obligation relates; and that no other Fund or other series of the
Trust shall be liable with respect to this Agreement or in connection with the
transactions contemplated herein.
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, and the obligations of this Agreement are not binding upon any of
the Trustees, officers or shareholders of the Trust individually.
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.
VARIABLE ANNUITY PORTFOLIOS SALOMON BROTHERS ASSET
on behalf of CitiSelect(R) VIP Folio 200, MANAGEMENT LIMITED
CitiSelect(R) VIP Folio 300, CitiSelect(R)
VIP Folio 400 and CitiSelect(R) VIP
Folio 500
By: _______________________________ By:________________________
Title:_____________________________ Title:_____________________
The foregoing is acknowledged:
Citibank, N.A.
By:_______________________________
Title:____________________________
<PAGE>
EXHIBIT C
SUB-MANAGEMENT AGREEMENT
VARIABLE ANNUITY PORTFOLIOS
SUB-MANAGEMENT AGREEMENT, dated as of ______________, 1999, by and
between Variable Annuity Portfolios, a Massachusetts business trust (the
"Trust"), and Salomon Brothers Asset Management Inc, a Delaware corporation
(the "Subadviser").
W I T N E S S E T H:
WHEREAS, Citibank, N.A. (the "Manager") has been retained by the Trust
to act as investment adviser to the Trust with respect to the series of the
Trust designated as CitiSelect(R) VIP Folio 200, CitiSelect(R) VIP Folio 300,
CitiSeLect(R) VIP Folio 400 and CitiSelect(R) VIP Folio 500 (each individually
a "Fund" and collectively the "Funds"), 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 has requested that the Trust engage the Subadviser
to provide certain investment advisory services for the Funds, and the
Subadviser is willing to provide such investment advisory services for the
Funds 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 Trust hereby appoints the Subadviser to act as subadviser with
respect to each of the Funds 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 Funds for the compensation provided by
this Agreement.
2. Duties of the Subadviser. The Subadviser shall provide the Funds and
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
<PAGE>
each Fund'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 Fund allocated by the Manager to the Subadviser shall be
held uninvested, subject always to the restrictions of the Trust's Declaration
of Trust, dated October 18, 1996, and By-laws, as each may be amended and
restated 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 Fund, 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 Fund and what portion, if any, of the assets of a Fund 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 Fund'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 Fund 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.
The Subadviser shall take, on behalf of each Fund, 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 Fund'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 Fund as to deliveries
of securities and payments of cash for the account of that Fund. 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 Fund 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 Fund
<PAGE>
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
Fund to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Fund. In making purchases or
sales of securities or other property for the account of a Fund, 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 Fund all of its own expenses allocable to that Fund including, without
limitation, organization costs of the Fund; 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 shares of beneficial interests and
servicing shareholder accounts; expenses of preparing, typesetting, printing
and mailing shareholder reports, notices, proxy statements and reports to
governmental officers and commissions and to shareholders in the Fund; expenses
connected with the execution, recording and settlement of security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of the Fund (including but not limited to the fees of independent pricing
services); expenses of meetings of the Fund's shareholders; expenses relating
to the issuance of shares of beneficial interests in the Fund; 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 Fund may
be a party and the legal obligation which the Trust may have to indemnify its
Trustees and officers with respect thereto.
4. Compensation of the Subadviser. For the services to be rendered by
the Subadviser hereunder, the Trust shall pay to the Subadviser from the assets
of the Funds pro rata an investment subadvisory fee, accrued daily and paid
<PAGE>
monthly, at an annual rate equal to the percentages specified below of the
aggregate assets of all Funds allocated to the Subadviser:
0.45% on the first $100 million;
0.40% on assets in excess of $100 million
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.
If in any fiscal year the aggregate expenses of a Fund 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 Fund
and any fund investing its assets therein, the Trust 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.
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 Fund, except as permitted by
the 1940 Act, will not take a long or short position in shares of beneficial
interests of a Fund 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 Fund 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 Fund, 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 Manager 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.
<PAGE>
7. Activities of the Subadviser. The services of the Subadviser to the
Funds 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 Funds. It is understood that Trustees, officers, and shareholders 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 a shareholder 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 ____________, 2001, on which date it will terminate
unless its continuance after ____________, 2001 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 Fund.
This Agreement may be terminated as to any Fund 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 Fund, 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 Fund at any time without the
payment of any penalty by the Subadviser on not less than 90 days' written
notice to the Trust and the Manager. This Agreement shall automatically
terminate in the event of its "assignment." Termination of this Agreement as to
any Fund shall not terminate this Agreement as it applies to the remaining
Funds.
This Agreement constitutes the entire agreement between the parties and
may be amended as to any Fund only if such amendment is approved by the
Subadviser and the "vote of a majority of the outstanding voting securities" of
that Fund (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 Fund shall not, without more, amend such
term with respect to any other Fund.
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.
<PAGE>
Each party acknowledges and agrees that all obligations of the Trust
under this Agreement are binding only with respect to the particular Fund to
which a particular obligation relates; that any liability of the Trust under
this Agreement, or in connection with the transactions contemplated herein,
shall be discharged only out of the assets of the particular Fund to which a
particular obligation relates; and that no other Fund or other series of the
Trust shall be liable with respect to this Agreement or in connection with the
transactions contemplated herein.
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, and the obligations of this Agreement are not binding upon any of
the Trustees, officers or shareholders of the Trust individually.
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.
VARIABLE ANNUITY PORTFOLIOS SALOMON BROTHERS ASSET
on behalf of CitiSelect(R) VIP Folio 200, MANAGEMENT INC
CitiSelect(R) VIP Folio 300, CitiSelect(R)
VIP Folio 400 and CitiSelect(R) VIP
Folio 500
By: _______________________________ By:________________________
Title:_____________________________ Title:_____________________
The foregoing is acknowledged:
Citibank, N.A.
By:_______________________________
Title:_____________________________
<PAGE>
EXHIBIT D
Deleted text is marked through [bracketed for filing purposes] and added text
appears in italics [[double brackets for filing purposes]].
FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED TO BE
AMENDED UNDER ITEM 5.
(3) Purchase securities of any issuer if such purchase at the time
thereof would cause with respect to 75% of the total assets of the Fund
more than 10% of the voting securities of such issuer to be held by the
Fund, except that the Fund may invest all or substantially all of its
[investable] assets in [another registered investment company having
the same investment objective and policies and substantially the same
investment restrictions as those with respect to the Fund (a
"Qualifying Portfolio").] [[one or more investment companies, to the
extent not prohibited by the 1940 Act, the rules and regulations
thereunder, and exemptive orders granted under such Act.]]
(4) Purchase securities of any issuer if such purchase at the time
thereof would cause as to 75% of the Fund's total assets more than 5%
of the Fund's assets (taken at market value) to be invested in the
securities of such issuer (other than securities or obligations issued
or guaranteed by the United States, any state or political subdivision
thereof, or any political subdivision of any state, or any agency or
instrumentality of the United States or of any state or of any
political subdivision of any state), except that the Fund may invest
all or substantially all of its [investable] assets in [a Qualifying
Portfolio.] [[one or more investment companies, to the extent not
prohibited by the 1940 Act, the rules and regulations thereunder, and
exemptive orders granted under such Act.]]
(6) Underwrite securities issued by other persons, except that all the
assets of the Fund may be invested in [a Qualifying Portfolio] [[one or
more investment companies, to the extent not prohibited by the 1940
Act, the rules and regulations thereunder, and exemptive orders granted
under such Act,]] and except insofar as the Fund may technically by
deemed an underwriter under the Securities Act in selling a security.
<PAGE>
EXHIBIT E
Deleted text is marked through [bracketed for filing purposes] and added text
appears in italics [[double brackets for filing purposes]].
FUNDAMENTAL INVESTMENT RESTRICTIONS PROPOSED TO BE
AMENDED UNDER ITEM 7.
(1) Borrow money, except that as a temporary measure for extraordinary
or emergency purposes it may borrow in an amount not to exceed 1/3 of
the current value of its net assets, including the amount borrowed
[(nor] [[; or]] purchase any securities at any time at which borrowings
exceed 5% of the total assets of the Fund, taken at market value[)]. It
is intended that the Fund would borrow money only from banks and only
to accommodate requests for the repurchase of shares of the Fund while
effecting an orderly liquidation of portfolio securities.
(2) Make loans to other persons except (a) through the lending of its
portfolio securities and provided that any such loans not exceed 30% of
the Fund's total assets (taken at market value), (b) through the use of
repurchase agreements, [[fixed time deposits]] or the purchase of
short-term obligations or (c) by purchasing all or a portion of an
issue of debt securities of types commonly distributed privately to
financial institutions. The purchase of short-term commercial paper or
a portion of an issue of debt securities which is part of an issue to
the public shall not be considered the making of a loan.
(3) Purchase securities of any issuer if such purchase at the time
thereof would cause with respect to 75% of the total assets of the Fund
more than 10% of the voting securities of such issuer to be held by the
Fund[, except] [[; provided that, for purposes of this restriction, the
issuer of an option or futures contract shall not be deemed to be the
issuer of the security or securities underlying such contract; and
provided further]] that the Fund may invest all or any portion of its
assets in one or more investment companies, to the extent not
prohibited by the 1940 Act, the rules and regulations thereunder, and
exemptive orders granted under such Act.
(4) Purchase securities of any issuer if such purchase at the time
thereof would cause as to 75% of the Fund's total assets more than 5%
of the Fund's assets (taken at market value) to be invested in the
securities of such issuer (other than securities or obligations issued
or guaranteed by the United States, any state or political subdivision
thereof, or any political subdivision of any such state, or any agency
or instrumentality of the United States or of any state or of any
<PAGE>
political subdivision of any state)[, except] [[; provided that, for
purposes of this restriction, the issuer of an option or futures
contract shall not be deemed to be the issuer of the security or
securities underlying such contract; and provided further]] that the
Fund may invest all or any portion of its assets in one or more
investment companies, to the extent not prohibited by the 1940 Act, the
rules and regulations thereunder, and exemptive orders granted under
such Act.
(5) Concentrate its investments in any particular industry, but if it
is deemed appropriate for the achievement of the Fund's investment
objective, up to 25% of its assets, at market value at the time of each
investment, may be invested in any one industry[[, except that
positions in futures contracts shall not be subject to this
restriction]].
(6) Underwrite securities issued by other persons,
except that all or any portion of the assets of the Fund may be
invested in one or more investment companies, to the extent not
prohibited by the 1940 Act, the rules and regulations thereunder, and
exemptive orders granted under such Act, and except insofar as the Fund
may technically be deemed an underwriter under the Securities Act in
selling a security.
(7) Purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests
therein), interests in oil, gas or mineral leases, commodities or
commodity contracts in the ordinary course of business ([the Fund]
[[the foregoing shall not be deemed to preclude the Fund from
purchasing or selling futures contracts or options thereon, and the
Fund]] reserves the freedom of action to hold and to sell real estate
acquired as a result of the ownership of securities by the Fund).
For CitiFunds Small Cap Growth VIP Portfolio only:
(8) Issue any senior security (as that term is defined in the 1940 Act)
if such issuance is specifically prohibited by the 1940 Act or the
rules and regulations promulgated thereunder[, except as appropriate to
evidence a debt incurred without violating Investment Restriction (1)
above].
For CitiSelect VIP Folios 200-500 only:
(8) Issue any senior security (as that term is defined in the 1940 Act)
if such issuance is specifically prohibited by the 1940 Act or the
rules and regulations promulgated thereunder[, provided that collateral
arrangements with respect to options, futures contracts, and options on
futures contracts, including deposits of initial and variation margin,
are not considered to be the issuance of a senior security for purposes
of this restriction and except as appropriate to evidence a debt
incurred without violating Investment Restriction (1) above].
<PAGE>
APPENDIX
PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
PROXY CARD PROXY CARD
CITISELECT(R) VIP FOLIO 200 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 300 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 400 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 500 SUBACCOUNT AND
CITIFUNDSSM SMALL CAP GROWTH VIP PORTFOLIO
SUBACCOUNT
OF
FIRST CITICORP LIFE VARIABLE ANNUITY SEPARATE ACCOUNT,
A SEPARATE ACCOUNT OF FIRST CITICORP LIFE INSURANCE COMPANY
A PROXY FOR A SPECIAL MEETING
OF CONTRACT HOLDERS TO BE HELD APRIL 9, 1999
The undersigned owner of a variable annuity contract issued by First
Citicorp Life Insurance Company (First Citicorp Life) with unit interests in
CitiSelect(R) VIP Folio 200 Subaccount, CitiSelect(R) VIP Folio 300 Subaccount,
CitiSelect(R) VIP Folio 400 Subaccount, CitiSelect(R) VIP Folio 500 Subaccount
or CitiFundsSM Small Cap Growth VIP Portfolio Subaccount, a subaccount of First
Citicorp Life Variable Annuity Separate Account, revoking all Proxies
heretofore given, hereby appoints each of ______________ and ______________, or
any of them, as Proxies of the undersigned with full power of substitution, to
vote on behalf of all of the undersigned all unit interests (Units) in the
Subaccounts which the undersigned is entitled to vote at the Special Meeting of
Contract Holders to be held at Citicorp Center, 153 East 53rd Street, 14th
Floor, New York, New York, on Friday, April 9, 1999 at 9:00 a.m., Eastern 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 DIRECTORS OF FIRST CITICORP LIFE.
THE BOARD OF DIRECTORS OF FIRST CITICORP LIFE RECOMMENDS A VOTE FOR THE
FOLLOWING PROPOSALS.
<PAGE>
1. To instruct First Citicorp Life to vote with respect to the approval of
a Sub-Management Agreement between Mutual Management Corp. and Variable
Annuity Portfolios with respect to CitiSelect VIP Folios 200-500
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
2. To instruct First Citicorp Life to vote with respect to the approval of
a Sub-Management Agreement between Salomon Brothers Asset Management
Limited and Variable Annuity Portfolios with respect to CitiSelect VIP
Folios 200-500
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
3. To instruct First Citicorp Life to vote with respect to the approval of
a Sub-Management Agreement between Salomon Brothers Asset Management
Inc and Variable Annuity Portfolios with respect to CitiSelect VIP
Folios 200-500
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
4. To instruct First Citicorp Life to vote with respect to approval of an
amendment to the Funds' Declaration of Trust to allow the assets of
each Fund to be invested in one or more investment companies to the
extent not prohibited by the Investment Company Act of 1940, the rules
and regulations thereunder, and exemptive orders granted under such Act
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiFundsSM Small
Cap Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
5. To instruct First Citicorp Life to vote with respect to the approval of
an amendment to the fundamental investment policies of each Fund to
allow the assets of that Fund to be invested in one or more investment
companies to the extent not prohibited by the 1940 Act
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiFundsSM Small
Cap Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
6. To instruct First Citicorp Life to vote on authorizing the Trustees of
the Funds to select and change investment subadvisers and enter into
investment subadvisory agreements without obtaining the approval of
shareholders
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiFundsSM Small
Cap Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
7. To instruct First Citicorp Life to vote on an amendment to the
fundamental investment policies of each Fund concerning that Fund's
ability to make loans to other persons and to buy or sell futures
contracts and options on futures
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiFundsSM Small
Cap Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
8. To instruct First Citicorp Life to elect Heath B. McLendon as a Trustee
of the Funds
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct First Citicorp Life to vote my Units in CitiFundsSM Small
Cap Growth VIP Portfolio Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
<PAGE>
9. To instruct First Citicorp Life to vote on the selection of
PricewaterhouseCoopers LLP as the independent certified public
accountants for each Fund
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiFundsSM Small
Cap Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
THE UNIT INTERESTS REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR TO INSTRUCT
FIRST CITICORP LIFE TO VOTE 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.
Date:_______________
-----------------------------------
Signature of Contract Holder
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD
When signing as attorney, executor, administrator, trustee, guardian or as
custodian for a minor, please sign your name and give your full title as such.
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. Joint owners
should each sign this proxy. Please sign, date and return in the enclosed
envelope.
<PAGE>
BALLOT BALLOT
CITISELECT(R) VIP FOLIO 200 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 300 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 400 SUBACCOUNT,
CITISELECT(R) VIP FOLIO 500 SUBACCOUNT AnD
CITIFUNDSSM SMALL CAP GROWTH VIP PORTFOLIO
SUBACCOUNT
OF
FIRST CITICORP LIFE VARIABLE ANNUITY SEPARATE ACCOUNT
A SEPARATE ACCOUNT OF FIRST CITICORP LIFE INSURANCE COMPANY
INSTRUCTIONS FOR A SPECIAL MEETING
OF CONTRACT HOLDERS TO BE HELD APRIL 9, 1999
The undersigned, a participant in a Variable Annuity Contract issued by
First Citicorp Life Insurance Company (First Citicorp Life), revoking all
Proxies heretofore given, hereby instructs the holder of the Contract (known as
the Contract Holder) to vote its unit interests (Units) in CitiSelect(R) VIP
Folio 200 Subaccount, CitiSelect(R) VIP Folio 300 Subaccount, CitiSelect(R) VIP
Folio 400 Subaccount, CitiSelect(R) VIP Folio 500 Subaccount and CitiFundsSM
Small Cap Growth VIP Portfolio Subaccount, each a Subaccount of the First
Citicorp Life Variable Annuity Separate Account, which are attributable to the
undersigned's participation in the Contract and which the Contract Holder is
entitled to vote at the Special Meeting of Contract Holders of the Subaccount
to be held at Citicorp Center, 153 East 53rd Street, 14th Floor, New York, New
York at 9:00 a.m., Eastern time, and at any adjournment thereof, as fully as
the undersigned would be entitled to vote if personally present, as follows:
INSTRUCTIONS SOLICITED ON BEHALF OF THE CONTRACT HOLDER.
THE BOARD OF DIRECTORS OF FIRST CITICORP LIFE RECOMMENDS A VOTE FOR THE
FOLLOWING PROPOSALS.
1. To instruct First Citicorp Life to vote with respect to the approval of
a Sub-Management Agreement between Mutual Management Corp. and Variable
Annuity Portfolios with respect to CitiSelect VIP Folios 200-500
<PAGE>
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
2. To instruct First Citicorp Life to vote with respect to the approval of
a Sub-Management Agreement between Salomon Brothers Asset Management
Limited and Variable Annuity Portfolios with respect to CitiSelect VIP
Folios 200-500
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
3. To instruct First Citicorp Life to vote with respect to the approval of
a Sub-Management Agreement between Salomon Brothers Asset Management
Inc and Variable Annuity Portfolios with respect to CitiSelect VIP
Folios 200-500
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
4. To instruct First Citicorp Life to vote with respect to approval of an
amendment to the Funds' Declaration of Trust to allow the assets of
each Fund to be invested in one or more investment companies to the
extent not prohibited by the Investment Company Act of 1940, the rules
and regulations thereunder, and exemptive orders granted under such Act
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiFundsSM Small
Cap Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
5. To instruct First Citicorp Life to vote with respect to the approval of
an amendment to the fundamental investment policies of each Fund to
allow the assets of that Fund to be invested in one or more investment
companies to the extent not prohibited by the 1940 Act
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiFundsSM Small
Cap Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
6. To instruct First Citicorp Life to vote on authorizing the Trustees of
the Funds to select and change investment subadvisers and enter into
investment subadvisory agreements without obtaining the approval of
shareholders
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiFundsSM Small
Cap Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
7. To instruct First Citicorp Life to vote on an amendment to the
fundamental investment policies of each Fund concerning that Fund's
ability to make loans to other persons and to buy or sell futures
contracts and options on futures
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiFundsSM Small
Cap Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
<PAGE>
8. To instruct First Citicorp Life to elect Heath B. McLendon as a Trustee
of the Funds
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
I instruct First Citicorp Life to vote my Units in CitiFundsSM Small
Cap Growth VIP Portfolio Subaccount, if any:
______VOTE FOR the nominee listed above ______VOTE WITHHELD
<PAGE>
9. To instruct First Citicorp Life to vote on the selection of
PricewaterhouseCoopers LLP as the independent certified public
accountants for each Fund
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 200 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 300 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 400 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiSelect(R) VIP
Folio 500 Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
I instruct First Citicorp Life to vote my Units in CitiFundsSM Small
Cap Growth VIP Portfolio Subaccount, if any:
______FOR ______AGAINST ______ABSTAIN
THE UNIT INTERESTS ATTRIBUTABLE TO THE UNDERSIGNED'S PARTICIPATION IN THE
VARIABLE ANNUITY CONTRACT WILL BE VOTED AS INDICATED OR VOTED TO INSTRUCT FIRST
CITICORP LIFE TO VOTE FOR ANY PROPOSALS FOR WHICH NO CHOICE IS INDICATED.
THE CONTRACT HOLDER IS INSTRUCTED IN ITS DISCRETION TO VOTE UPON SUCH OTHER
MATTERS AS MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Date:_______________
-----------------------------------
Signature of Participant
-----------------------------------
Signature of joint owner, if any
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD
<PAGE>
When signing as attorney, executor, administrator, trustee, guardian or as
custodian for a minor, please sign your name and give your full title as such.
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. Joint owners
should each sign this proxy. Please sign, date and return in the enclosed
envelope.
