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:
[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
CitiFundsSM Trust I on behalf of its series - CitiFundsSM Balanced Portfolio
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(Name of Registrant as Specified In Its Charter)
Jennifer H. Hurford
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(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:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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<PAGE>
PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
CITIFUNDSSM BALANCED PORTFOLIO
21 Milk Street
Boston, Massachusetts 02109
June __, 1999
Dear Shareholder:
The accompanying materials relate to a Special Meeting of Shareholders of
CitiFundsSM Balanced Portfolio. The Meeting will be held on Friday, July 30,
1999 at 3:00 p.m., Eastern time.
YOUR PARTICIPATION AT THIS MEETING IS VERY IMPORTANT IN ORDER TO
ACCOMPLISH PROPOSED ACTIONS THAT YOUR BOARD OF TRUSTEES HAS DETERMINED ARE FAIR
aND REASONABLE AND IN YOUR BEST INTERESTS.
If you cannot attend the Meeting, you may participate by proxy. As a
shareholder, you cast one vote for each share that you own. Please take a few
moments to read the enclosed materials and then cast your vote on the enclosed
proxy card. If the Fund does not receive your proxy card, our proxy solicitor,
Shareholder Communications Corporation, may contact you to help you decide how
to cast your vote.
VOTING TAKES ONLY A FEW MINUTES. EACH SHAREHOLDER'S VOTE IS IMPORTANT.
YOUR PROMPT RESPONSE WILL BE MUCH APPRECIATED.
Items 1, 2 and 3 are interrelated. In general, they involve a proposal to
restructure the Fund to take advantage of amendments to federal law which,
among other things, would allow the Fund to be managed in an administratively
simpler manner. In addition, shareholders are being asked to authorize the
selection of subadvisers by the Board, to authorize certain technical
amendments and additions to the Fund's investment restrictions and to approve
the selection of the Fund's accountants.
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 Shareholder Communications Corporation at
1-800-790-7068.
<PAGE>
We appreciate your participation in this important meeting. Thank you.
Sincerely,
Philip W. Coolidge
President
<PAGE>
PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
CITIFUNDSSM BALANCED PORTFOLIO
21 Milk Street
Boston, Massachusetts 02109
Telephone: (617) 423-1679
NOTICE OF SPECIAL MEETING
OF SHAREHOLDERS
To be held Friday, July 30, 1999
A Special Meeting of Shareholders of CitiFundsSM Balanced Portfolio will
be held at Citicorp Center, 153 East 53rd Street, 14th Floor, Room H, New York,
New York, on Friday, July 30, 1999 at 3:00 p.m., Eastern Time, for the
following purposes:
ITEM 1. To vote on an amendment to the Fund's Declaration of Trust to
allow the assets of the 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 (the
"1940 Act").
ITEM 2. To vote on an amendment to the fundamental investment policies
of the Fund to allow the assets of the Fund to be invested in
one or more investment companies to the extent not prohibited by
the 1940 Act.
ITEM 3. To vote on a Management Agreement for the Fund with Citibank,
N.A.
ITEM 4. To vote on authorizing the Trustees to select and change
investment subadvisers and enter into investment subadvisory
agreements without obtaining the approval of shareholders.
ITEM 5. To vote on an amendment to the fundamental investment policies
of the Fund concerning the Fund's ability to borrow money, make
loans to other persons and to buy and sell futures contracts and
options on futures.
ITEM 6. To vote on a proposal to adopt fundamental investment policies
limiting the underwriting of securities, purchases and sales of
<PAGE>
real estate and commodities and issuance of senior securities.
ITEM 7. To vote on the selection of PricewaterhouseCoopers LLP as the
independent certified public accountants for the Fund.
ITEM 8. To transact such other business as may properly come before the
Special Meeting of Shareholders and any adjournments thereof.
THE BOARD OF TRUSTEES OF THE FUND RECOMMENDS THAT YOU VOTE IN FAVOR OF
EACH OF ITEMS 1 THROUGH 7.
Only shareholders of record on June 7, 1999 will be entitled to vote at
the Special Meeting of Shareholders and at any adjournments thereof.
Linda T. Gibson, Secretary
June __, 1999
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
CITIFUNDSSM BALANCED PORTFOLIO
21 Milk Street
Boston, Massachusetts 02109
Telephone: (617) 423-1679
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 Trustees of CitiFundsSM Balanced Portfolio for use at a Special
Meeting of Shareholders of the Fund, or any adjournment thereof, to be held at
Citicorp Center, 153 East 53rd Street, 14th Floor, Room H, New York, New York,
on Friday, July 30, 1999 at 3:00 p.m., Eastern Time, for the purposes set for
the in the accompanying Notice of Special Meeting.
The close of business on June 7, 1999 has been fixed as the Record Date
for the determination of shareholders entitled to notice of and to vote at the
Meeting. __________ shares of CitiFunds Balanced Portfolio - Class A and
_______ shares of CitiFunds Balanced Portfolio - Class B (without par value)
were outstanding as of the close of business on the Record Date. Shareholders
of record at the close of business on the Record Date will be entitled to one
vote for each share held.
The Fund's Annual Report for the fiscal year ended December 31, 1998,
including audited financial statements, has previously been sent to
shareholders and is available without charge by written request or by calling
Shareholder Communications Corporation at 1-800-790-7068.
This Proxy Statement and Notice of Special Meeting with accompanying form
of proxy are being mailed by the Board of Trustees on or about June __, 1999.
MANNER OF VOTING PROXIES AND VOTE REQUIRED
If the accompanying form of proxy is executed properly and returned,
shares represented by it will be voted at the Meeting in accordance with the
instructions on the proxy. IF NO INSTRUCTIONS ARE SPECIFIED, ALL SHARES OF THE
FUND WILL BE VOTED FOR EACH OF PROPOSED ITEMS 1 THROUGH 7. Shares of each class
will vote together on all Items. If the enclosed form of proxy is executed and
returned, it may nevertheless be revoked prior to its exercise by a signed
writing delivered at the Meeting or filed with the Secretary of the Fund.
<PAGE>
If sufficient votes to approve the proposed Items 1 through 7 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 shares voted at the
Meeting. When voting on a proposed adjournment, the persons named as proxies
will vote all shares that they are entitled to vote with respect to Items 1
through 7 for the proposed adjournment, unless directed to disapprove the Item,
in which case such shares will be voted against the proposed adjournment.
The presence in person or by proxy of the holders of a majority of the
outstanding shares of the Fund entitled to vote is required to constitute a
quorum at the Meeting for purposes of voting on Items 1 through 7. For purposes
of determining the presence of a quorum for transacting business at the
Meeting, abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular
matter with respect to which the brokers or nominees do not have discretionary
power) will be treated as shares that are present but which have not been
voted. For this reason, abstentions and broker "non-votes" will have the effect
of a "no" vote for purposes of obtaining the requisite approval of Items 1
through 7.
GENERAL BACKGROUND
CURRENT STRUCTURE
The Fund currently is a feeder fund in a two-tier master/feeder structure.
The Fund does not invest directly in securities but instead invests through an
underlying mutual fund (called a master fund), Balanced Portfolio, that has the
same investment goals and strategies as the Fund. Balanced Portfolio buys,
holds and sells securities in accordance with its goals and strategies. The
Fund may withdraw its investment in Balanced Portfolio at any time, and will do
so when the Fund's Trustees believe that withdrawal would be in the best
interests of the Fund's shareholders. As of December 31, 1998, the Fund's net
assets were $236,358,866, and the Portfolio's net assets were $265,123,864.
Citibank, N.A. is the investment manager of Balanced Portfolio. The assets
of Balanced Portfolio are allocated among equity and fixed income securities.
As manager, Citibank determines the percentages of Balanced Portfolio's assets
that are to be invested in these types of securities. Normally, about 60% of
the Portfolio's assets is invested in equity securities and at least 25% of its
assets is invested in fixed income securities, although this blend of stocks
and bonds may shift from time to time to take advantage of a strong market or
based on Citibank's outlook for risk and return. Citibank manages the
Portfolio's fixed income securities, and delegates the daily management of the
Portfolio's equity securities to SSBC Fund Management, Inc. (SSBC), as
subadviser. SSBC is an affiliate of Citibank.
<PAGE>
SSBC also serves as subadviser to Large Cap Value Portfolio, another
mutual fund advised by Citibank that acts as a master fund. Currently, eight
funds invest in Large Cap Value Portfolio. SSBC manages Large Cap Value
Portfolio in the same manner and style as it manages the equity portion of
Balanced Portfolio. As of April 30, 1999, Large Cap Value Portfolio's net
assets were $95,229,611.
Citibank also manages U.S. Fixed Income Portfolio, a mutual fund that acts
as a master fund. Currently, nine funds invest in U.S. Fixed Income Portfolio.
Citibank manages U.S. Fixed Income Portfolio in the same manner and style as it
manages the fixed income portion of Balanced Portfolio. As of April 30, 1999,
U.S. Fixed Income Portfolio's net assets were $92,318,053.
PROPOSED STRUCTURE
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. 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 Fund is proposing to restructure so that it invests its
investable assets in the two master funds described above, Large Cap Value
Portfolio and U.S. Fixed Income Portfolio. To accomplish this restructuring,
Balanced Portfolio will transfer its equity securities to Large Cap Value
Portfolio and its fixed income securities to U.S. Fixed Income Portfolio. In
exchange, the Fund will receive an interest in each of Large Cap Value
Portfolio and U.S. Fixed Income Portfolio corresponding in amount to the Fund's
pro rata share of Balanced Portfolio's contribution to the applicable
Portfolio. Balanced Portfolio will then dissolve. After giving effect to the
restructuring, Citibank will perform asset allocation services at the Fund
level and determine the percentages of Fund assets to be invested in each of
Large Cap Value Portfolio and U.S. Fixed Income Portfolio. Citibank will
continue to serve as the manager for Large Cap Value Portfolio and U.S. Fixed
Income Portfolio, and SSBC will continue to serve as subadviser to the Large
Cap Value Portfolio.
After the proposed restructuring, the Fund will continue to be organized
in a two-tier structure. However, the Fund will invest its assets in Large Cap
Value Portfolio and U.S. Fixed Income Portfolio, rather than Balanced
Portfolio. The restructuring is illustrated by the charts below.
<PAGE>
BEFORE RESTRUCTURING
The Fund invests all of its investable assets in Balanced Portfolio.
[Description of Chart
(Page layout - landscape)
Box containing the name "CitiFunds Balanced Portfolio" is placed above a box
containing the name "Balanced Portfolio." An arrow leading from the box above
to the box below connects the two boxes.]
AFTER RESTRUCTURING
The Fund invests all of its investable assets in two Portfolios.
[Description of Chart
(Page layout - landscape)
Box containing the name "CitiFunds Balanced Portfolio" is placed above and
between two boxes, the one on the left containing the name "Large Cap Value
Portfolio," and the one on the right containing the name "U.S. Fixed Income
Portfolio." Arrows leading from the box above connect the box above to each of
the two boxes below.]
The restructuring will permit the Fund's equity and fixed income
securities to be managed as part of larger existing portfolios of securities.
Economies of scale may result and may benefit the Fund. Also, master funds
managed in the same way will effectively be combined, reducing the
administrative burden to Citibank.
THE FUND'S EXPENSE RATIO WILL NOT INCREASE AS A RESULT OF THE
RESTRUCTURING. IT IS EXPECTED THAT THE SAME PERSONNEL AT CITIBANK AND AT SSBC
WHO CURRENTLY PROVIDE MANAGEMENT SERVICES WILL CONTINUE TO DO SO AFTER THE
RESTRUCTURING, AND THE NATURE, LEVEL AND QUALITY Of SERVICES TO THE FUND WILL
NOT BE ADVERSELY AFFECTED.
The following table summarizes estimated shareholder transaction expenses
for the Fund and estimated current annual operating expenses for the Fund and
for Balanced Portfolio. The table also presents estimated annual operating
expenses for the Fund, Large Cap Value Portfolio and U.S. Fixed Income
Portfolio after the restructuring. PLEASE NOTE THAT THE TOTAL COMBINED ADVISORY
AND ADMINISTRATIVE FEES BEFORE AND AFTER THE RESTRUCTURING WILL BE THE SAME
ALTHOUGH INDIVIDUAL COMPONENTS WILL VARY.
<PAGE>
SHAREHOLDER FEES
FEES PAID DIRECTLY FROM YOUR INVESTMENT
SHARE CLASS CLASS A CLASS B
Current Current
and After and After
Restructuring Restructuring
Maximum Sales Charge (Load) Imposed on Purchases 5.00% None
Maximum Deferred Sales Charge (Load) None1 5.00%2
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<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS3
<S> <C> <C> <C> <C>>
SHARE CLASS CLASS A CLASS A CLASS B CLASS B
After After
Current Restructuring Current Restructuring
Management Fees 0.40% 0.70%4 0.40% 0.70%4
Distribution (12b-1) Fees (including service fees) 0.25% 0.25% 1.00% 1.00%
Other Expenses
Administrative services 0.30% -- 0.30% --
Other operating expenses 0.27% 0.27% 0.27% 0.27%
TOTAL ANNUAL FUND OPERATING EXPENSES* 1.22% 1.22% 1.97% 1.97%
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</TABLE>
* Because some of the Fund's expenses were waived or reimbursed, actual total
operating expenses for the prior year were (or, in the case of Class B
shares, would have been) 1.02% for Class A shares and 1.77% for Class B
shares. After waivers and reimbursements, total operating expenses after the
restructuring are expected to be 1.02% for Class A shares and 1.77% for Class
B shares.
These fee waivers and reimbursements may be reduced or terminated at any time.
1 Except for investment of $500,000 or more.
2 Class B shares have a contingent deferred sales charge (CDSC) which is
deducted from your sale proceeds if you sell your Class B shares within five
years of your original purchase of the shares. In the first year after
purchase, the CDSC is 5.00% of the price at which you purchased your shares,
or the price at which you sold your shares, whichever is less, declining to
1.00% in the fifth year after purchase.
3 The Fund currently invests in an underlying mutual fund, Balanced Portfolio.
The current expenses in this table reflect the expenses of the Fund and
Balanced Portfolio. The expenses after restructuring in this table reflect
the expenses of the Fund, Large Cap Value Portfolio and U.S. Fixed Income
Portfolio.
4 A combined fee for investment advisory and administrative services.
EXAMPLE
This example is intended to help you compare the cost of investing in the Fund
to the cost of investing in other mutual funds. The example assumes that:
o you invest $10,000 in the Fund for the time periods indicated;
<PAGE>
o you pay the maximum applicable sales charge;
o you reinvest all dividends; and
o you then sell all your shares at the end of those periods, if you own
Class A shares.
If you own Class B shares, two numbers are given, one showing your expenses if
you sold (redeemed) all your shares at the end of each time period and one if
you held onto your shares. The example also shows the effects of the conversion
of Class B shares to Class A shares after 8 years.
The example also assumes that:
o each investment has a 5% return each year -- the assumption of a 5%
return is required by the Securities and Exchange Commission for the
purpose of this example and is not a prediction of the Fund's future
performance; and
o the Fund's operating expenses shown in the Fund Fees and Expenses
table remain the same before taking into consideration any fee waivers
or reimbursements.
Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
CURRENT AND AFTER RESTRUCTURING
Class A $618 $868 $1,137 $1,903
Class B
Assuming redemption at end of period $700 $918 $1,162 $2,060
Assuming no redemption $200 $618 $1,062 $2,060
The Fund's Trustees believe that this restructuring is in the best
interests of Fund shareholders. The Trustees will implement the restructuring
for the Fund if shareholders of the Fund approve each of the proposals in Items
1, 2 and 3 below. The proposal in Item 4 would permit the Trustees, subject to
receiving exemptive relief from the Securities and Exchange Commission, to hire
subadvisers for the Fund without Fund shareholder approval. The Trustees will
implement the restructuring whether or not Fund shareholders approve the
proposal in Item 4. If the restructuring is implemented, the Fund, subject to
obtaining favorable rulings from the Internal Revenue Service, intends to
change its fiscal year end to October 31.
<PAGE>
In the event that the proposals in Items 1, 2 and 3 below do not receive
the requisite shareholder approval for the Fund, the Trustees will consider
possible alternatives, which might include resubmission of the proposals for
approval by shareholders of the Fund.
ITEM 1. TO VOTE ON AN AMENDMENT TO THE FUND'S DECLARATION OF TRUST TO
ALLOW THE ASSETS OF THE FUND TO BE INVESTED IN ONE OR MORE
INVESTMENT COMPANIES TO THE EXTENT NOT PROHIBITED BY THE 1940
ACT.
It is proposed that the Fund's Declaration of Trust be amended to permit
the Fund to invest in other investment companies to the extent not prohibited
by the 1940 Act.
The Fund's Declaration of Trust presently permits the Fund to invest all
of its investable assets in a single investment company that is registered
under the 1940 Act. Pursuant to this authority, the Fund invests all of its
investable assets in Balanced Portfolio. As described above, 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. It is
possible that there could be additional amendments to the 1940 Act in the
future which affect mutual funds' ability to invest in other funds.
The proposed amendment to the Fund's Declaration of Trust which appears
below will allow the Fund to take advantage of the changes in law, as well as
future changes in law or regulation on this topic. This amendment will also
facilitate the Fund completing the proposed restructuring described under
"General Background" above. The Fund's Board of Trustees believes that this
amendment will be to the Fund's advantage and is in the best interests of the
shareholders of the Fund. It is proposed that Section 3.2(d) of the Declaration
of Trust be amended by deleting the words below that have been marked through
[bracketed] and adding the italicized [[double bracketed]] words:
(d) 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 of CitiSelectSM Folio 200, CitiSelectSM
Folio 300, CitiSelectSM Folio 400 [and], CitiSelectSM Folio 500,
[[CitiFundsSM Balanced Portfolio]] and of each other Series of the Trust
[(other than Landmark Balanced Fund)], or sell all or a portion of such
Trust Property and invest the proceeds of such sales, in 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.
Balanced Portfolio's Declaration of Trust currently does not permit
Balanced Portfolio to invest substantially all of its assets in other
investment companies, and also currently requires that investors in Balanced
Portfolio approve sales, transfers or exchanges of all or substantially all of
the assets of that Portfolio. This would include the transfer of the
Portfolio's assets to Large Cap Value Portfolio and U.S. Fixed Income
Portfolio. See "General Background." Balanced Portfolio will call a meeting of
is investors to approve an amendment to Balanced Portfolio's Declaration of
Trust to permit the investment in multiple investment companies and the
transfer of Balanced Portfolio's assets to Large Cap Value Portfolio and U.S.
Fixed Income Portfolio. By voting in favor of this Item, Fund shareholders will
be authorizing the Fund's Trustees to vote in favor of this amendment and this
transfer.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the outstanding
shares of the Fund is required for approval of the amendment to the Declaration
of Trust with respect to the Fund. This requires approval by the holders of 67%
or more of the outstanding shares of the Fund which are present at the Meeting
if the holders of more than 50% of such shares are present in person or by
proxy, or more than 50% of the outstanding shares of the Fund, whichever is
less (a "Majority Shareholder Vote").
THE BOARD OF TRUSTEES OF THE FUND UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF THE FUND VOTE FOR APPROVAL OF THE PROPOSED AMENDMENT TO THE
DECLARATION OF TRUST.
ITEM 2. TO VOTE ON AN AMENDMENT TO THE FUNDAMENTAL INVESTMENT POLICIES
OF THE FUND TO ALLOW THE ASSETS OF THE FUND TO BE INVESTED IN
ONE OR MORE INVESTMENT COMPANIES TO THE EXTENT NOT PROHIBITED BY
THE 1940 ACT.
The Fund has adopted certain fundamental investment restrictions which, as
a matter of law, cannot be changed without shareholder approval. Certain of
these fundamental investment restrictions currently permit the Fund to invest
its investable assets in a single investment company having the same investment
goals and strategies and substantially the same investment restrictions as the
Fund. As noted above, 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 also may be future amendments to the 1940 Act
affecting mutual funds' ability to invest in other funds.
<PAGE>
In order to take advantage of the flexibility of current and future
applicable law and regulation and to permit the Fund to enter into the
restructuring, it is proposed that each of the fundamental investment
restrictions listed in EXHIBIT A be amended as indicated in that Exhibit.
Shareholders also should review Item 5 for additional proposed changes to these
investment restrictions.
The Trustees believe that these proposed amendments to the fundamental
investment policies are in the best interests of the shareholders of the Fund.
Balanced Portfolio has adopted fundamental restrictions which are
substantially similar to those listed in EXHIBIT A. Each of these restrictions
for Balanced Portfolio will be amended in the same way that the Fund's
restrictions will be amended. Balanced Portfolio will call a meeting of its
investors to approve these amendments. By voting in favor of this Item, Fund
shareholders will be authorizing the Fund's Trustees to vote in favor of these
amendments to Balanced Portfolio's fundamental investment restrictions.
VOTE REQUIRED
Because the investment restrictions in EXHIBIT A are fundamental policies
of the Fund, approval of this proposal will require a Majority Shareholder
Vote.
THE BOARD OF TRUSTEES OF THE FUND UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF THE FUND VOTE FOR APPROVAL OF THE PROPOSED AMENDMENTS TO THE
FUND'S FUNDaMENTAL INVESTMENT POLICIES TO ALLOW THE ASSETS OF THE FUND TO BE
INVESTED IN ONE OR MORE INVESTMENT COMPANIES TO THE EXTENT NOT PROHIBITED BY
THE 1940 ACT.
ITEM 3. TO VOTE ON A MANAGEMENT AGREEMENT FOR THE FUND WITH CITIBANK,
N.A.
Citibank currently does not provide investment advisory services directly
to the Fund. Instead, Citibank provides investment advisory services to
Balanced Portfolio, the underlying mutual fund in which the Fund invests,
pursuant to a management agreement dated May 17, 1999. The Fund's distributor
currently provides administrative services to the Fund pursuant to an
administrative services agreement. The distributor, in turn, subcontracts with
Citibank so that Citibank actually provides administrative services to the
Fund.
As part of the restructuring described above, it is proposed that the Fund
enter into a Management Agreement with Citibank. Under the proposed Management
Agreement, Citibank will be responsible for the overall management of the
Fund's business affairs and will provide investment advisory as well as
<PAGE>
administrative services to the Fund, including the provision of general office
facilities and supervising the overall administration of the Fund. When the
Fund invests in multiple investment companies, Citibank will perform asset
allocation services at the Fund level and will determine the percentages of
Fund assets to be invested in each underlying investment company. The proposed
Management Agreement will render the Fund's existing administrative services
agreement unnecessary, and it will be terminated.
It is expected that the same personnel at Citibank and at SSBC who
currently provide advisory and administrative services for Fund assets will
continue to do so after the Management Agreement is entered into, and the
nature, level and quality of services to the Fund will not be adversely
effected. The management fee payable by Fund shareholders under the proposed
Management Agreement will be the same as the aggregate investment advisory and
administrative services fees currently payable by Fund shareholders. A copy of
the proposed Management Agreement for the Fund is attached hereto as EXHIBIT B.
Shareholders should refer to EXHIBIT B for the complete terms of the Management
Agreement, and the description of the Management Agreement set forth herein is
qualified in its entirety by the provisions of the Management Agreement as set
forth in EXHIBIT B.
THE PROPOSED MANAGEMENT AGREEMENT
Under the proposed Management Agreement, Citibank as investment manager
will furnish continuously an investment program for the Fund and will determine
from time to time what securities are purchased, sold or exchanged, and what
portion of the assets of the Fund are held uninvested, subject always to the
restrictions of the Fund's Declaration of Trust and By-laws, as each may be
amended from time to time, the provisions of the 1940 Act and the Fund's
prospectus. Citibank will also make recommendations as to the manner in which
proxies, voting rights, rights to consent to corporate action and any other
rights pertaining to portfolio securities will be exercised; and will take all
actions which Citibank deems necessary to implement Fund investment policies.
Under the Management Agreement, Citibank will perform such administrative
and management services as may from time to time be reasonably requested,
including: (i) providing office space, equipment and clerical personnel
necessary for maintaining the organization of the Fund and for performing
administrative and management functions; (ii) supervising the overall
administration of the Fund, including negotiation of contracts and fees with
and the monitoring of performance and billings of the Fund's transfer agent,
service agents, custodian and other independent contractors or agents; (iii)
preparing and, if applicable, filing all documents required for compliance by
the Fund with applicable laws and regulations, including registration
statements, prospectuses and statements of additional information, semi-annual
and annual reports to shareholders, proxy statements and tax returns; (iv)
preparing agendas and supporting documents for and minutes of meetings of
<PAGE>
Trustees, committees of Trustees and shareholders; and (v) arranging for
maintenance of the books and records of the Fund.
The Management Agreement, if approved by a Majority Shareholder Vote of
the Fund, will become effective with respect to the Fund on the effective date
of the proposed restructuring, and will continue in effect for an initial
two-year period, and thereafter from year to year, subject to approval annually
in accordance with the 1940 Act. The Management Agreement may be terminated at
any time without the payment of any penalty by the Fund's Board of Trustees or
by a Majority Shareholder Vote of the Fund, or by Citibank, in each case on not
more than 60 days' nor less than 30 days' written notice to the other party.
The Management Agreement also will terminate automatically in the event of its
"assignment" (as defined in the 1940 Act).
Under the proposed Management Agreement, Citibank will not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which the Management Agreement relates, except a
loss resulting from Citibank's willful misfeasance, or its bad faith or gross
negligence in the performance of its obligations and duties, or by reason of
Citibank's reckless disregard of its obligations and duties under such
Agreement.
Mark Lindbloom, a Vice President of Citibank, will serve as the Fund's
overall portfolio manager and will be responsible for determining asset
allocations, supervising and monitoring the performance of Citibank personnel
responsible for managing the Fund's assets, and supervising and monitoring the
performance of the subadviser. Mr. Lindbloom has been a portfolio manager for
fixed income securities since joining Citibank in 1986. Mr. Lindbloom has more
than 19 years of investment management experience. Prior to joining Citibank,
Mr. Lindbloom was a Fixed Income Portfolio Manager with Brown Brothers Harriman
& Co., where he managed fixed income assets for discretionary corporate
portfolios.
MANAGEMENT FEES
Under the proposed Management Agreement between the Fund and Citibank, the
Fund will pay Citibank management fees equal on an annual basis to 0.70% of the
Fund's average daily net assets for the Fund's then-current fiscal year minus
the aggregate investment management fees allocated to the Fund for the Fund's
then-current fiscal year from the portfolios in which it invests of which
Citibank is the manager. Fees will be accrued daily and payable monthly.
The fees payable by the Fund for the investment advisory and
administrative services Citibank currently provides to Balanced Portfolio are
0.45% of the Fund's average daily net assets for its then-current fiscal year.
The fees payable by the Fund for the administrative services currently provided
to the Fund are 0.25% of the Fund's average daily net assets for its
<PAGE>
then-current fiscal year. Investment advisory and administrative fees accrued
under the existing advisory and administrative services agreements were
$1,159,750 with respect to Balanced Portfolio and $346,383 with respect to the
Fund, for the fiscal year ended December 31, 1998. Had the proposed management
fees for the Fund been in effect for that period, the fees accrued would have
been the same as the aggregate investment advisory and administrative fees
accrued under the existing advisory and administrative services agreements for
such period. Except as set forth above with respect to administrative services
and investment advisory fees and under the caption "Other Services Provided by
Citibank" below, neither Citibank nor any affiliated person of Citibank, nor
any affiliated person of such person, received any other fees from the Fund for
services provided to the Fund during its last fiscal year. There were no other
material payments by the Fund to Citibank, any affiliated person of Citibank,
or any affiliated person of such person, during such period.
No commissions were paid by the Fund or Balanced Portfolio to any broker
during the same period that (i) is an affiliated person of Balanced Portfolio
or the Fund, or (ii) is affiliated with any person described in clause (i) of
this paragraph, or (iii) an affiliated person of which is an affiliated person
of Balanced Portfolio, the Fund, Citibank, the placement agent of Balanced
Portfolio, or the distributor of the Fund.
DESCRIPTION OF CITIBANK
Citibank offers a wide range of banking and investment services to
customers across the United States and throughout the world, and has been
managing money since 1822. With its affiliates, it currently manages more than
$327 billion in assets worldwide. Citibank, with headquarters at 153 East 53rd
Street, New York, New York , is a wholly-owned subsidiary of Citigroup Inc.
Citigroup Inc. was formed as a result of the merger of Citicorp and Travelers
Group, Inc., which was completed on October 8, 1998.
John S. Reed is the Chairman of the Board and a Director of Citibank.
Victor J. Menezes is the President and a Director of Citibank. William R.
Rhodes and H. Onno Ruding are Vice Chairmen and Directors of Citibank. The
other Directors of Citibank are Paul S. Collins, Vice Chairman of Citigroup
Inc. and Robert I. Lipp, Chairman and Chief Executive Officer of Travelers
Insurance Group and of Travelers Property Casualty Corp.
Each of the individuals named above is also a Director of Citicorp. In
addition, the following persons have the affiliations indicated:
Paul J. Collins Director, Kimberly-Clark Corporation
Robert I. Lipp Chairman, Chief Executive Officer and
President, Travelers Property Casualty Corp.
<PAGE>
John S. Reed Director, Monsanto Company
Director, Philip Morris Companies Incorporated
Stockholder, Tampa Tank & Welding, Inc.
William R. Rhodes Director, Private Export Funding Corporation
H. Onno Ruding Supervisory Director, Amsterdamsch
Trustees Cantoor B.V.
Director, Pechiney S.A.
Advisory Director, Unilever NV and Unilever
PLC
Director, Corning Incorporated
Banking Relationships. Citibank and its affiliates may have deposit, loan
and other relationships with the issuers of securities purchased on behalf of
the Fund, including outstanding loans to such issuers which may be repaid in
whole or in part with the proceeds of securities so purchased. Citibank has
informed the Fund that, in making its investment decisions, it does not obtain
or use material inside information in the possession of any division or
department of Citibank or in the possession of any affiliate of Citibank.
Bank Regulatory Matters. The Glass-Steagall Act prohibits certain
financial institutions, such as Citibank, from underwriting securities of
open-end investment companies, such as the Fund. Citibank believes that its
services under the Management Agreement and the activities performed by it or
its affiliates as Service Agents (see "Other Services Provided by Citibank"
below) are not underwriting and are consistent with the Glass-Steagall Act and
other relevant federal and state laws. However, there is no controlling
precedent regarding the performance of the combination of investment advisory,
shareholder servicing and administrative activities by banks. State laws on
this issue may differ from applicable federal law, and banks and financial
institutions may be required to register as dealers pursuant to state
securities laws. Changes in either federal or state statutes or regulations, or
in their interpretations, could prevent Citibank or its affiliates from
continuing to perform these services. If Citibank or its affiliates were to be
prevented from acting as the investment manager or a Service Agent, the Fund
would seek alternative means for obtaining these services. The Fund does not
expect that shareholders would suffer any adverse financial consequences as a
result of any such occurrence.
Citibank furnishes at its own expense all services, facilities and
personnel necessary in connection with managing the Fund's investments and
effecting securities transactions for the Fund. Citibank also provides other
services to the Fund. See "Other Services Provided by Citibank" below.
<PAGE>
Citibank also serves as adviser or subadviser to other registered
investment companies with similar investment objectives. Those companies are
identified in EXHIBIT C hereto, along with their asset size and the rates of
compensation paid by those companies to Citibank for advisory or subadvisory
services.
OTHER SERVICES PROVIDED BY CITIBANK
Citibank and Affiliates as Service Agents. Each class of the Fund has a
Distribution Plan adopted in accordance with Rule 12b-1 under the 1940 Act.
Under the Plans, the Fund may pay monthly fees at an annual rate not to exceed
0.25% of the average daily net assets of the Fund attributable to that class in
the case of the Plan relating to Class A shares, and not to exceed 1.00% of the
average daily net assets of the Fund attributable to that class in the case of
the Plan relating to Class B shares. Such fees may be used to make payments to
CFBDS, Inc., the Fund's distributor, for distribution services, to securities
dealers and other industry professionals (called Service Agents) that have
entered into service agreements with the distributor and others in respect of
the sale of shares of the Fund, and to other parties in respect of the sale of
shares of the Fund, and to make payments for advertising, marketing or other
promotional activity, and payments for preparation, printing and distribution
of prospectuses, statements of additional information and reports for
recipients other than regulators and existing shareholders. The Fund also may
make payments to the distributor, Service Agents and others for providing
personal service or the maintenance of shareholder accounts. The amounts paid
by the distributor to each recipient may vary based upon certain factors,
including, among other things, the levels of sales of Fund shares and/or
shareholder services provided. Recipients may receive different compensation
for sales for Class A and Class B shares. During the period it is in effect,
each Distribution Plan obligates the Fund to pay fees to the Service Agents and
others as compensation for their services, and not as reimbursement for
specific expenses incurred.
Net fees accrued to Citibank and its affiliates for services provided as
Service Agent or Shareholder Servicing Agent, as the case may be, of the Fund
for the fiscal year ended December 31, 1998 for Class A shares were $577,968.
No Class B shares were outstanding during the fiscal year ended December 31,
1998.
THE EVALUATION BY THE BOARD OF TRUSTEES
At meetings on May 7, 1999 and May 26, 1999, the Trustees considered
information with respect to whether the Management Agreement proposed to be
adopted in connection with the restructuring was in the best interests of the
Fund and its shareholders. The Trustees considered, among other factors,
representations by Citibank that the proposed restructuring would not
<PAGE>
materially affect the nature, level and quality of services now provided to the
Fund. The Trustees also considered that, subject to the required approval of
shareholders of the Fund, the same personnel at Citibank who provide management
services for Fund assets are expected to continue to do so and that the
aggregate investment management fees paid by Fund shareholders (including their
share of Large Cap Value Portfolio's and U.S. Fixed Income Portfolio's
investment management fees) would not increase as a result of the
restructuring. The Trustees also noted that the restructuring would permit
separate portfolios of assets managed in the same style and manner to be
combined, which could lead to economies of scale and other benefits to Fund
shareholders. The Trustees also considered the nature and quality of services
expected to be provided by Citibank to the Fund, and information regarding
fees, expense ratios and performance. In evaluating Citibank's ability to
provide services to the Fund, the Trustees considered information as to
Citibank's business organization, financial resources and personnel.
The Board of Trustees also considered that if in the future the Fund were
to invest directly in securities and if circumstances existed under which best
price and execution could be obtained from more than one broker or dealer,
Citibank could, in its discretion, purchase and sell securities through dealers
who provide research, statistical and other information to Citibank. Although
certain research, market and statistical information from brokers and dealers
could be useful to the Fund and to Citibank, Citibank has advised the Fund that
such information would be, in its opinion, only supplementary to Citibank's own
research activities and the information would still have to be analyzed,
weighed and reviewed by Citibank. It was noted that such information could be
useful to Citibank in providing services to clients other than the Fund.
Conversely, it was noted that information provided to Citibank by brokers and
dealers through whom other clients of Citibank effect securities transactions
could be useful to Citibank in providing services to the Fund.
Based upon its review, the Trustees concluded that the Management
Agreement is reasonable, fair and in the best interests of the Fund and its
shareholders, and that the fees provided in the Management Agreement are fair
and reasonable in light of the usual and customary charges made by others for
services of the same nature and quality. Accordingly, after consideration of
the above factors, and such other factors and information as were deemed
relevant, the Trustees, including all of the Independent Trustees, unanimously
approved the Management Agreement for the Fund and voted to recommend its
approval by Fund shareholders.
VOTE REQUIRED
Approval of the Management Agreement will require a Majority Shareholder
Vote.
<PAGE>
THE BOARD OF TRUSTEES OF THE FUND UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF THE FUND VOTE FOR APPROVAL OF THE MANAGEMENT AGREEMENT OF THE
FUND.
ITEM 4. TO VOTE ON AUTHORIZING THE TRUSTEES TO SELECT AND CHANGE
INVESTMENT SUBADVISERS AND ENTER INTO INVESTMENT SUBADVISORY
AGREEMENTS WITHOUT OBTAINING THE APPROVAL OF SHAREHOLDERS.
As discussed above, the Fund currently does not invest directly in
securities but instead invests through an underlying mutual fund. However, if
the Management Agreement described in Item 3 above is approved, the Fund may,
in the future, invest directly in securities. If the Fund were to do so,
Citibank could decide that it could maximize the Fund's chances of achieving
its investment goals if one or more subadvisers were hired. Retaining the
services of a subadviser, and replacing that subadviser, currently would
require Fund shareholder approval.
The 1940 Act requires that all contracts pursuant to which persons serve
as investment advisers to investment companies be approved by shareholders.
Absent exemptive relief from the Securities and Exchange Commission,
shareholders of the Fund would be asked to approve the advisory contract for
any new subadviser for the Fund. The Securities and Exchange Commission has
previously granted conditional exemptions from these shareholder vote
requirements. If the Fund were to obtain similar exemptive relief and this
proposed Item 4 is approved, the Board of Trustees would be able, without
further shareholder approval, to appoint new 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
shareholder approval of advisory contracts.
This Item 4 is intended to facilitate the efficient supervision and
management of subadvisers by Citibank and the Trustees, and to give Citibank
flexibility in managing the Fund. Citibank would continuously monitor the
performance of any subadviser and could 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 would optimize the Fund's chances of achieving its
investment goals. If the Fund were to obtain exemptive relief and shareholders
were to approve this proposed Item 4, the Trustees would not be required to
call a Fund shareholder meeting each time a new subadviser was appointed.
Shareholder meetings entail substantial costs. These costs must be weighed
against the benefits of shareholder scrutiny of proposed contracts with new or
replacement subadvisers. However, even in the absence of shareholder approval,
any proposal to add or replace subadvisers would receive careful review. First,
Citibank would assess the Fund's needs and, if it believed new or replacement
<PAGE>
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 would be required to
determine that an investment management agreement with the subadviser was
reasonable, fair and in the best interests of a fund and its shareholders, and
that the fees provided in the agreement were 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 new 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 shareholders is in the best interests of the
shareholders of the Fund.
VOTE REQUIRED
Approval of this proposal will require a Majority Shareholder Vote.
THE BOARD OF TRUSTEES OF THE FUND UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF THE FUND VOTE FOR AUTHORIZING THE TRUSTEES TO SELECT AND CHANGE
INVESTMENT SUBADVISERS AND ENTER INTO INVESTMENT SUBADVISORY AGREEMENTS WITHOUT
OBTAINING THE APPROVAL OF SHAREHOLDERS.
ITEM 5. TO VOTE ON AN AMENDMENT TO THE FUNDAMENTAL INVESTMENT POLICIES
OF THE FUND CONCERNING THE FUND'S ABILITY TO BORROW MONEY, MAKE
LOANS TO OTHER PERSONS AND TO BUY OR SELL FUTURES CONTRACTS AND
OPTIONS ON FUTURES.
As noted above in Item 2, the Fund has adopted certain fundamental
investment restrictions which, as a matter of law, cannot be changed without
shareholder approval. Two of these fundamental investment restrictions limit
the Fund's ability to borrow money and to make loans to other persons. The Fund
is proposing technical amendments to these restrictions to clarify that the use
of certain investment techniques, such as securities lending, would not be a
violation of these restrictions.
Certain other of the Fund's fundamental investment restrictions could be
construed to limit the Fund's ability to buy or sell futures contracts and
options on futures. The Fund is proposing technical amendments to these
restrictions to clarify this point. The effect of the proposed amendments is to
<PAGE>
make the Fund's ability to buy or sell futures contracts and options on futures
consistent with that described in the Fund's prospectus.
Of course, the Fund is not required to use investment techniques such as
securities lending, or to buy and sell futures contracts and options on futures
contracts. The Fund's portfolio managers may decide, as a matter of investment
strategy, not to use the investments and techniques described in the prospectus
at any particular time.
To give effect to the technical amendments described above, it is proposed
that each of the fundamental investment restrictions listed in EXHIBIT D be
amended as indicated in that Exhibit. Shareholders should note that EXHIBIT D
assumes that Item 2 has been approved.
The Trustees believe that these proposed amendments to the fundamental
investment policies are in the best interests of the shareholders of the Fund.
VOTE REQUIRED
Because the investment restrictions in EXHIBIT D are fundamental
policies of the Fund, approval of this proposal will require a Majority
Shareholder Vote.
THE BOARD OF TRUSTEES OF THE FUND UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF THE FUND VOTE FOR APPROVAL OF THE PROPOSED AMENDMENTS TO THE
FUND'S FUNDAMENTAL INVESTMENT POLICIES CONCERNING THE FUND'S ABILITY TO BORROW
MONEY, MAKE LOANS TO OTHER PERSONS AND TO BUY OR SELL FUTURES CONTRACTS AND
OPTIONS ON FUTURES.
ITEM 6. TO VOTE ON A PROPOSAL TO ADOPT FUNDAMENTAL INVESTMENT POLICIES
LIMITING THE UNDERWRITING OF SECURITIES, PURCHASES AND SALES OF
REAL ESTATE AND COMMODITIES AND ISSUANCE OF SENIOR SECURITIES.
As noted above in Items 2 and 5, the Fund has adopted certain fundamental
investment restrictions which, as a matter of law, cannot be changed without
shareholder approval. The Fund has taken the position that additional
fundamental investment restrictions also cannot be adopted without shareholder
approval. In its review of the Fund's registration statement amendments, the
Staff of the Securities and Exchange Commission has noted that the Fund has not
adopted fundamental restrictions limiting the underwriting of securities,
purchases and sales of real estate and commodities and issuance of senior
securities. The Staff of the Securities and Exchange Commission has asked that
the Fund adopt fundamental restrictions on these topics, and the Fund has
undertaken to seek shareholder approval to do so.
<PAGE>
As a result, the Fund is proposing to adopt the fundamental investment
restrictions listed in EXHIBIT E. It should be noted that the adoption of these
restrictions will not change the manner in which the Fund conducts its
investment activities. The Trustees believe that the adoption of these
fundamental investment restrictions is in the best interests of shareholders of
the Fund.
VOTE REQUIRED
Because the investment restrictions in EXHIBIT E will be fundamental
policies of the Fund, approval of this proposal will require a Majority
Shareholder Vote.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS OF THE
FUND VOTE FOR THE ADOPTION OF FUNDAMENTAL INVESTMENT POLICIES LIMITING THE
UNDERWRITING OF SECURITIES, PURCHASES AND SALES OF REAL ESTATE AND COMMODITIES
AND ISSUANCE OF SENIOR SECURITIES.
ITEM 7. TO VOTE ON THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE FUND.
It is intended that proxies cast by the 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 Fund who are not "interested persons" (as that term is
defined in the 1940 Act) of the Fund, of PricewaterhouseCoopers LLP under
Section 32(a) of the 1940 Act as independent public accountants, to certify
every financial statement of the 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 (or, subject to obtaining a favorable ruling from
the Internal Revenue Service, October 31, 1999). PricewaterhouseCoopers LLP has
no direct or material indirect interest in the Fund.
PricewaterhouseCoopers LLP has served as the Fund's independent certified
public accountants since 1994, providing audit services and consultation with
respect to the preparation of filings with the Securities and Exchange
Commission.
Representatives of PricewaterhouseCoopers LLP are not expected to be
present at the Meeting.
<PAGE>
VOTE REQUIRED
Approval of this proposal will require approval by the holders of a
majority of the outstanding shares of the Fund which are present at the Meeting
in person or by proxy.
THE BOARD OF TRUSTEES OF THE FUND UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF THE FUND VOTE FOR APPROVAL OF PRICEWATERHOUSECOOPERS LLP AS
INDEPEnDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE FUND.
ITEM 8. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
SPECIAL MEETING OF SHAREHOLDERS AND ANY ADJOURNMENTS THEREOF.
The management of the Fund 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 June 7, 1999, the Trustees and officers of the Fund, individually
and as a group, owned beneficially or had the right to vote the following
outstanding shares of the Fund:
Amount of
Name and Address Beneficial Percent
of Beneficial Owner Ownership of Shares
Trustees of the Fund
- ---------- . . . . . . . . . . . . . . . . . . . ------- -----%
Officers of the Fund
- ---------- . . . . . . . . . . . . . . . . . . . ------- -----%
All Trustees and officers of
the Fund as a group . . . . . . . . . . . . . . ------- -----%
<PAGE>
As of June 7, 1999, to the best knowledge of the Fund, the following
persons beneficially owned 5% or more of the outstanding shares of the Fund:
Amount of
Name and Address Beneficial Percent
of Beneficial Owner Ownership of Shares
- ---------- . . . . . . . . . . . . . . . . . . . ------- -----%
- ---------- . . . . . . . . . . . . . . . . . . . ------- -----%
ADDITIONAL INFORMATION
The Fund is a series of CitiFunds Trust I, a diversified, open-end
registered investment company organized as a Massachusetts business trust under
a Declaration of Trust dated as of April 13, 1984, as amended and restated on
August 9, 1996. The Fund was designated as a separate series of the Trust on
April 17, 1990. The mailing address of the Trust is 21 Milk Street, Boston,
Massachusetts 02109.
Fund shareholders may have purchased their shares through banks or other
financial institutions, securities dealers or others (called Service Agents)
that have entered into service agreements with the Fund's distributor. In these
cases, the Service Agents are the shareholders of record of the Fund. At any
meeting of Fund shareholders, a Service Agent may vote any shares of which it
is the holder of record and for which it does not receive voting instructions
proportionately in accordance with the instructions it receives for all other
shares of which that Service Agent is the holder of record.
The cost of soliciting proxies in the accompanying form, which is expected
to be about $____________, 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 Trustees, officers, and regular employees and agents
of the Fund 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 Fund's distributor 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 the Fund. The principal
business address of State Street is 225 Franklin Street, Boston, Massachusetts
02110.
SUBMISSION OF CERTAIN PROPOSALS
The Trust is a Massachusetts business trust and as such is not required to
hold annual meetings of shareholders, although special meetings may be called
<PAGE>
for the Fund, or for CitiFunds Trust I as a whole, for purposes such as
electing Trustees or removing Trustees, changing fundamental policies, or
approving an advisory contract. Shareholder proposals to be presented at any
subsequent meeting of shareholders must be received by the Trust at the Trust's
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 Trustees,
Linda T. Gibson, Secretary
June __, 1999
<PAGE>
EXHIBIT A
Deleted text is marked through [bracketed] and
added text appears in italics [[double brackets]].
FUNDAMENTAL INVESTMENT RESTRICTIONS
PROPOSED TO BE AMENDED UNDER ITEM 2.
The Fund will not:
(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[,
with respect to the Fund, the Trust] [[the Fund]] may invest all or
[substantially all of the Funds] [[any portion of its]] assets in [another
registered company having the same investment objectives 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 such state, or any agency or instrumentality of the United
States or of any state or of any political subdivision of any state), except
that[, with respect to the Fund, the Trust] [[the Fund]] may invest all or
[substantially all of the Funds] [[any portion of its]] 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.]]
<PAGE>
EXHIBIT B
MANAGEMENT AGREEMENT
CITIFUNDS TRUST I
CitiFunds Balanced Portfolio
MANAGEMENT AGREEMENT, dated as of _____ __, 1999, by and between CitiFunds
Trust I, a Massachusetts trust (the "Trust"), and Citibank, N.A., a national
banking association ("Citibank" or the "Manager").
W I T N E S S E T H:
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 and any exemptive orders thereunder, the "1940 Act"), and
WHEREAS, the Trust wishes to engage Citibank to provide certain management
services for the series of the Trust designated as CitiFunds Balanced Portfolio
(the "Fund"), and Citibank is willing to provide such management services for
the Fund on the terms and conditions set forth herein.
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. Duties of Citibank. (a) Citibank shall act as the Manager for the Fund
and as such 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 the Fund shall be held uninvested,
subject always to the restrictions of the Trust's Declaration of Trust, dated
as of April 23, 1984, 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, and the then-current Registration Statement of the
Trust with respect to the Fund. The Manager shall also make recommendations as
to the manner in which voting rights, rights to consent to corporate action and
any other rights pertaining to the Fund's portfolio securities shall be
exercised. Should the Board of Trustees of the Trust at any time, however, make
any definite determination as to investment policy applicable to the Fund and
notify the Manager thereof in writing, the Manager 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 Manager shall
<PAGE>
take, on behalf of the 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 the Fund's account
with the brokers or dealers selected by it, and to that end the Manager is
authorized as the agent of the Trust to give instructions to the custodian or
any subcustodian of the Fund as to deliveries of securities and payments of
cash for the account of the Fund. 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 the Fund
and/or the other accounts over which the Manager or its affiliates exercise
investment discretion. The Manager is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Manager 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 Manager and its affiliates have with respect to accounts over which
they exercise investment discretion. In making purchases or sales of securities
or other property for the account of the Fund, the Manager 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. In providing the
services and assuming the obligations set forth herein, the Manager may employ,
at its own expense, or may request that the Trust employ at the Fund's expense,
one or more subadvisers; provided that in each case the Manager shall supervise
the activities of each subadviser. Any agreement between the Manager and a
subadviser shall be subject to the renewal, termination and amendment
provisions applicable to this Agreement. Any agreement between the Trust on
behalf of the Fund and a subadviser may be terminated by the Manager at any
time on not more than 60 days' nor less than 30 days' written notice to the
Trust and the subadviser.
(b) Subject to the direction and control of the Board of Trustees of the
Trust, Citibank shall perform such administrative and management services as
may from time to time be reasonably requested by the Trust, which shall include
without limitation: (i) providing office space, equipment and clerical
personnel necessary for maintaining the organization of the Trust and for
performing the administrative and management functions herein set forth; (ii)
supervising the overall administration of the Trust, including negotiation of
contracts and fees with and the monitoring of performance and billings of the
Trust's transfer agent, shareholder servicing agents, custodian and other
independent contractors or agents; (iii) preparing and, if applicable, filing
all documents required for compliance by the Trust with applicable laws and
regulations, including registration statements, prospectuses and statements of
additional information, semi-annual and annual reports to shareholders, proxy
statements and tax returns; (iv) preparation of agendas and supporting
<PAGE>
documents for and minutes of meetings of Trustees, committees of Trustees and
shareholders; and (v) arranging for maintenance of books and records of the
Trust. Notwithstanding the foregoing, Citibank shall not be deemed to have
assumed any duties with respect to, and shall not be responsible for, the
distribution of shares of beneficial interest in the Fund, nor shall Citibank
be deemed to have assumed or have any responsibility with respect to functions
specifically assumed by any transfer agent, fund accounting agent, custodian or
shareholder servicing agent of the Trust or the Fund. In providing
administrative and management services as set forth herein, Citibank may, at
its own expense, employ one or more subadministrators; provided that Citibank
shall remain fully responsible for the performance of all administrative and
management duties set forth herein and shall supervise the activities of each
subadministrator.
2. Allocation of Charges and Expenses. Citibank shall furnish at its own
expense all necessary services, facilities and personnel in connection with its
responsibilities under Section 1 above. Except as provided in the foregoing
sentence, it is understood that the Trust will pay from the assets of the Fund
all of its own expenses allocable to the Fund including, without limitation,
organization costs of the Fund; compensation of Trustees who are not
"affiliated persons" of Citibank; 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, shareholder servicing agent, registrar or dividend
disbursing agent of the Trust; expenses of issuing and redeeming shares of
beneficial interest and servicing shareholder accounts; expenses of preparing,
typesetting, printing and mailing prospectuses, statements of additional
information, shareholder reports, notices, proxy statements and reports to
governmental officers and commissions and to existing shareholders of 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 registration and qualification of shares of 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.
3. Compensation of Citibank. For the services to be rendered and the
facilities to be provided by Citibank hereunder, the Trust shall pay to
Citibank from the assets of the Fund a management fee computed daily and paid
monthly at an annual rate equal to the lesser of (i) 0.70% of the Fund's
average daily net assets for the Fund's then-current fiscal year or (ii) the
difference between 0.70% of the Fund's average daily net assets for the Fund's
then-current fiscal year and the aggregate investment management fees allocated
<PAGE>
to the Fund for the Fund's then-current fiscal year from the portfolios in
which it invests of which Citibank is the manager. If Citibank provides
services hereunder for less than the whole of any period specified in this
Section 3, the compensation to Citibank shall be accordingly adjusted and
prorated.
4. Covenants of Citibank. Citibank 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 the Fund, except as permitted by the 1940
Act, will not take a long or short position in shares of beneficial interest in
the 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 the Fund relative to Citibank and its directors and
officers.
5. Limitation of Liability of Citibank. Citibank 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 the 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 5, the term
"Citibank" shall include directors, officers and employees of Citibank as well
as Citibank itself.
6. Activities of Citibank. The services of Citibank to the Fund are not to
be deemed to be exclusive, Citibank being free to render investment advisory,
administrative and/or other services to others. It is understood that Trustees,
officers, and shareholders of the Trust are or may be or may become interested
in Citibank, as directors, officers, employees, or otherwise and that
directors, officers and employees of Citibank are or may become similarly
interested in the Trust and that Citibank may be or may become interested in
the Trust as a shareholder or otherwise.
7. Duration, Termination and Amendments of this Agreement. This Agreement
shall become effective as of the day and year first above written, shall govern
the relations between the parties hereto thereafter and shall remain in force
until May 7, 2001, on which date it will terminate unless its continuance after
May 7, 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 Citibank 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 the Fund.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the "vote of a majority of the outstanding voting
securities" of the Fund, or by Citibank, in each case on not more than 60 days'
nor less than 30 days' written notice to the other party. This Agreement shall
automatically terminate in the event of its "assignment."
<PAGE>
This Agreement may be amended only if such amendment is approved by the
"vote of a majority of the outstanding voting securities" of the Fund (except
for any such amendment as may be effected in the absence of such approval
without violating the 1940 Act).
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.
Each party acknowledges and agrees that all obligations of the Trust under
this Agreement are binding only with respect to the Fund; 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 Fund;
and that no 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 as an officer under the Declaration and the obligations of
this Agreement are not binding upon any of the Trustees, officers or
shareholders of the Trust individually.
8. Governing Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.
9. Use of Name. The Trust hereby acknowledges that any and all rights in
or to the name "CitiFunds" which exist on the date of this Agreement or which
may arise hereafter are, and under any and all circumstances shall continue to
be, the sole property of Citibank; that Citibank may assign any or all of such
rights to another party or parties without the consent of the Trust; and that
Citibank may permit other parties, including other investment companies, to use
the word "CitiFunds" in their names. If Citibank, or its assignee as the case
may be, ceases to serve as the adviser to and administrator of the Trust, the
Trust hereby agrees to take promptly any and all actions which are necessary or
desirable to change its name so as to delete the word "CitiFunds."
<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.
CITIFUNDS TRUST I CITIBANK, N.A.
By: By:
Title: Title:
<PAGE>
EXHIBIT C
OTHER INVESTMENT COMPANIES WITH SIMILAR INVESTMENT OBJECTIVES TO THE
FUND FOR WHICH CITIBANK IS AN INVESTMENT ADVISER OR SUBADVISER
Annual Fee (as a Percentage of Assets as of
Name of Fund Average Net Assets) ________ __, 1999
- ------------ ------------------------------ -------------------
<PAGE>
EXHIBIT D
Deleted text is marked through [bracketed] and
added text appears in italics [[double brackets]].
FUNDAMENTAL INVESTMENT RESTRICTIONS
PROPOSED TO BE AMENDED UNDER ITEM 5.
The Fund will not:
(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 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]
[[if such borrowing is specifically prohibited by the 1940 Act or the rules and
regulations promulgated thereunder]].
(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 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] [[if such loans are
specifically prohibited by the 1940 Act or the rules and regulations
promulgated thereunder]].
(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][[; 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
<PAGE>
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 political subdivision of any state)[, except
that][[; 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 [objectives]
[[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]].
<PAGE>
EXHIBIT E
FUNDAMENTAL INVESTMENT RESTRICTIONS
PROPOSED TO BE ADOPTED UNDER ITEM 6.
The Fund will not:
(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
in so far 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 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).
(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.
<PAGE>
APPENDIX
PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
PROXY CARD PROXY CARD
CITIFUNDSSM BALANCED PORTFOLIO
A PROXY FOR A SPECIAL MEETING
OF SHAREHOLDERS TO BE HELD JULY 30, 1999
The undersigned, 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 shares in CitiFundsSM Balanced Portfolio which the undersigned
is entitled to vote at the Special Meeting of Shareholders of the Fund to be
held at Citicorp Center, 153 East 53rd Street, 14th Floor, Room H, New York,
New York, on Friday, July 30, 1999 at 3:00 p.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 FUND'S BOARD OF TRUSTEES.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS.
1. An amendment to the Fund's Declaration of Trust to allow the assets of the
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 (the
"1940 Act").
______FOR ______AGAINST ______ABSTAIN
2. An amendment to the fundamental investment policies of the Fund to allow
the assets of the Fund to be invested in one or more investment companies
to the extent not prohibited by the 1940 Act.
______FOR ______AGAINST ______ABSTAIN
<PAGE>
3. A Management Agreement for the Fund with Citibank, N.A.
______FOR ______AGAINST ______ABSTAIN
4. Authorizing the Trustees to select and change investment subadvisers and
enter into investment subadvisory agreements without obtaining the
approval of shareholders.
______FOR ______AGAINST ______ABSTAIN
5. An amendment to the fundamental investment policies of the Fund concerning
the Fund's ability to borrow money, make loans to other persons and to buy
and sell futures contracts and options on futures.
______FOR ______AGAINST ______ABSTAIN
6. A proposal to adopt fundamental investment policies limiting the
underwriting of securities, purchases and sales of real estate and
commodities and issuance of senior securities.
______FOR ______AGAINST ______ABSTAIN
7. The selection of PricewaterhouseCoopers LLP as the independent certified
public accountants for the Fund.
______FOR ______AGAINST ______ABSTAIN
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY PROPOSALS
FOR WHICH NO CHOICE IS INDICATED.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH OTHER MATTERS
AS MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Date:_______________
___________________________________
Signature
___________________________________
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.
