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
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CitiFundsSM Trust II on behalf of its series - CitiFundsSM Growth & Income Portfolio
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(Name of Registrant as Specified In Its Charter)
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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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PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
CITIFUNDSSM GROWTH & INCOME PORTFOLIO
21 Milk Street
Boston, Massachusetts 02109
June __, 1999
Dear Shareholder:
The accompanying materials relate to a Special Meeting of Shareholders of
CitiFundsSM Growth & Income 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.
Shareholders are being asked to vote on the transfer of the assets of
Growth & Income Portfolio, the underlying mutual fund in which the Fund
invests, to Large Cap Value Portfolio. In addition, shareholders are being
asked 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.
We appreciate your participation in this important meeting. Thank you.
Sincerely,
Philip W. Coolidge
President
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PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
CITIFUNDSSM GROWTH & INCOME 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 Growth & Income 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 the transfer by Growth & Income Portfolio of all of
its assets to Large Cap Value Portfolio in exchange for an
interest in Large Cap Value Portfolio, followed by the
dissolution of Growth & Income Portfolio.
ITEM 2. To vote on the selection of PricewaterhouseCoopers LLP as the
independent certified public accountants for the Fund.
ITEM 3. 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 AND 2.
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.
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PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
CITIFUNDSSM GROWTH & INCOME 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 Growth & Income 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 Growth & Income Portfolio - Class A and
_______ shares of CitiFunds Growth & Income 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 October 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 AND 2. 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.
If sufficient votes to approve the proposed Items 1 and 2 are not
received, the persons named as proxies may propose one or more adjournments of
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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 and
2 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 and 2. 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 and 2.
GENERAL BACKGROUND
CURRENT STRUCTURE
The Fund is a feeder fund in a master/feeder structure. The Fund does not
invest directly in securities but instead seeks its investment goal by
investing through an underlying mutual fund (called a master fund), Growth &
Income Portfolio. Growth & Income Portfolio has the same investment goals and
strategies as the Fund, and buys, holds and sells securities in accordance with
those goals and strategies. The Fund may withdraw its investment in Growth &
Income 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 April 30, 1999, the Fund's net assets were $56,995,065, and the Portfolio's
net assets were $81,664,452.
Citibank, N.A. is the investment manager of the Fund and of Growth &
Income Portfolio. Citibank has delegated the daily management of the
Portfolio's securities to SSBC Fund Management, Inc. (SSBC). SSBC is an
affiliate of Citibank. Citibank is entitled to receive a management fee from
Growth & Income Portfolio of 0.70% of the Portfolio's average daily net assets
for its then-current fiscal year, minus any subadviser fee payable to SSBC.
SSBC also serves as subadviser to Large Cap Value Portfolio, another
mutual fund managed by Citibank that acts as a master fund. Effective July 31,
1999, Large Cap Value Portfolio will have the same investment goal as the 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 Growth & Income
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Portfolio. As of April 30, 1999, Large Cap Value Portfolio's net assets were
$95,229,611.
Citibank is entitled to receive a management fee from Large Cap Value
Portfolio of 0.60% of the Portfolio's average daily net assets for its
then-current fiscal year, minus any subadviser fee payable to SSBC.
PROPOSED TRANSFER
The Fund is proposing to invest its investable assets in Large Cap Value
Portfolio instead of Growth & Income Portfolio. This investment will be
accomplished by Growth & Income Portfolio transferring its assets to Large Cap
Value Portfolio. In exchange, the Fund will receive an interest in Large Cap
Value Portfolio corresponding in amount to the Fund's pro rata share of Growth
& Income Portfolio's contribution to Large Cap Value Portfolio. Growth & Income
Portfolio will then dissolve. After giving effect to the transfer, Citibank
will continue to serve as the manager for the Fund and for Large Cap Value
Portfolio, and SSBC will continue to serve as subadviser to Large Cap Value
Portfolio.
The transfer will permit the Fund's securities to be managed as part of a
larger existing portfolio of securities having the same investment goals that
is subject to a lower management fee. 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 PROPOSED
TRANSFER. IT IS EXPECTED THAT THE SAME PERSONNEL AT CITIBANK AND AT SSBC WHO
CURRENTLY PROVIDE MANAGEMENT SERVICES WILL CONTINUE TO DO SO AFTER THE
TRANSFER, AND THE NATURE, LEVEL AND QUALITY OF SERVICES TO THE FUND WILL NOT BE
ADVERSELY AFFECTED.
The Fund's Trustees believe that this transaction is in the best interests
of Fund shareholders. If approved by shareholders, the transaction will be
implemented on July 31, 1999 (or another date selected by Citibank).
ITEM 1. TO VOTE ON THE TRANSFER BY GROWTH & INCOME PORTFOLIO OF ALL OF
ITS ASSETS TO LARGE CAP VALUE PORTFOLIO IN EXCHANGE FOR AN
INTEREST IN LARGE CAP VALUE PORTFOLIO, FOLLOWED BY THE
DISSOLUTION OF GROWTH & INCOME PORTFOLIO.
It is intended that proxies submitted by Fund shareholders not limited to
the contrary will be voted in favor of Growth & Income Portfolio transferring
all of its assets to Large Cap Value Portfolio. In exchange, an interest in
Large Cap Value Portfolio will be issued to the Fund. Growth & Income Portfolio
will then dissolve.
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Growth & Income Portfolio's Declaration of Trust currently states that the
Portfolio's Trustees have the power in their discretion without any requirement
of approval by investors to invest all or a portion of the Portfolio's assets
or other property in one or more investment companies to the extent not
prohibited by the Investment Company Act of 1940, as amended, and exemptive
orders granted under such Act. As a result, Portfolio investor approval is not
required to effect the transfer of assets from the Portfolio to Large Cap Value
Portfolio. Nevertheless, the Portfolio's Board of Trustees has decided to
submit this matter to Portfolio investors, including the Fund, for approval.
The Fund's Board of Trustees has decided to submit this matter to Fund
shareholders for approval. When asked by the Portfolio to vote on this matter,
the Fund will cast its votes in the same proportion as the votes of the Fund's
shareholders cast at the Meeting on this Item. The percentage of the Fund's
votes representing shareholders of the Fund not voting at the Meeting will be
voted in the same proportion as those cast by shareholders of the Fund who do,
in fact, vote. By voting in favor of this Item, Fund shareholders will be
authorizing the Fund's Trustees to vote in favor of the transfer.
In the event that the proposal in Item 1 does not receive the requisite
shareholder approval, the Trustees will consider possible alternatives, which
might include resubmission of the proposal for approval by shareholders of the
Fund.
VOTE REQUIRED
Approval the transfer of assets of Growth & Income Portfolio will
require the approval of "a majority interests vote" of Growth & Income
Portfolio present in person or represented by proxy at a meeting of the
investors in that Portfolio. A "majority interests vote" requires approval by
the holders of 67% or more of the Portfolio's beneficial interests which are
present or represented at the meeting if the holders of more than 50% of such
interests are present or represented by proxy, or more than 50% of the
Portfolio's beneficial interests, whichever is less.
THE BOARD OF TRUSTEES OF THE FUND UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF THE FUND VOTE FOR APPROVAL OF THE TRANSFER OF ASSETS OF GROWTH
& INCOME PORTFOLIO TO LARGE CAP VALUE PORTFOLIO.
ITEM 2. 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
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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 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 the Fund's inception, 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.
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 3. 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:
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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 . . . . . . . . . . . . . . _______ _____%
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 II, 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 series of the Trust on December
15, 1997. 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
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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 for the Fund, or for CitiFunds Trust II 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>
APPENDIX
PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
PROXY CARD PROXY CARD
CITIFUNDSSM GROWTH & INCOME 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 Growth & Income 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. The transfer by Growth & Income Portfolio of all of its assets to Large
Cap Value Portfolio in exchange for an interest in Large Cap Value
Portfolio, followed by the dissolution of Growth & Income Portfolio.
______FOR ______AGAINST ______ABSTAIN
2. 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.
<PAGE>
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
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.
