<PAGE> 1
FILE NOS: 33-13052
811-5090
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
NOT APPLICABLE
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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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.
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/ / 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> 2
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES
ONE TOWER SQUARE
HARTFORD, CONNECTICUT 06183
NOTICE OF ANNUAL MEETING
March 4, 1996
To Variable Annuity Contract Owners:
Notice is hereby given that the Annual Meeting of Variable Annuity Contract
Owners of The Travelers Timed Growth and Income Stock Account for Variable
Annuities ("Account TGIS") will be held at its offices at One Tower Square,
Hartford, Connecticut, on Friday, April 19, 1996, at 8:30 a.m. for the following
purposes:
1. To elect five (5) members of the Board of Managers to serve until
the next annual meeting and until their successors are elected and qualify.
2. To ratify the selection of Coopers & Lybrand, L.L.P. as independent
accountants of Account TGIS for the year ending December 31, 1996.
3. To approve the continuation of the Distribution and Management
Agreement among Account TGIS, The Travelers Insurance Company and Tower
Square Securities, Inc.
4. To act on any and all other business as may properly come before
the meeting.
The close of business on February 16, 1996 has been fixed as the record
date for the determination of Variable Annuity Contract Owners entitled to
notice of and to vote at said meeting.
By order of the Board of Managers.
/s/ ERNEST J. WRIGHT
ERNEST J. WRIGHT, SECRETARY
Please complete and return the enclosed proxy card as soon as possible in
the post-paid envelope provided. Your prompt response is appreciated.
101
<PAGE> 3
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES
PROXY STATEMENT FOR THE ANNUAL MEETING OF VARIABLE ANNUITY CONTRACT OWNERS
TO BE HELD ON FRIDAY, APRIL 19, 1996
THE BOARD OF MANAGERS OF THE TRAVELERS TIMED GROWTH AND INCOME STOCK
ACCOUNT FOR VARIABLE ANNUITIES (ACCOUNT TGIS) SOLICITS YOUR PROXY FOR USE AT THE
ANNUAL MEETING OF CONTRACT OWNERS AND AT ANY ADJOURNMENT OF IT. The annual
meeting will be held at 8:30 a.m. on Friday, April 19, 1996, at the offices of
Account TGIS, One Tower Square, Hartford, Connecticut. This proxy material is
expected to be mailed to Contract Owners on or about March 4, 1996.
VOTE BY PROXY
A proxy card is enclosed for use at the meeting. The proxy card may be
revoked at any time before it is voted by sending a written notice of revocation
to Account TGIS's Secretary or by appearing in person to vote at the meeting.
All proxy cards which are properly executed and received in time and not so
revoked will be voted at the meeting in accordance with the instructions on
them, if any. If no specification is made, the proxy card will be voted for the
election of the five nominees for members of the Board of Managers listed in
this proxy statement, for the ratification of the selection of Coopers & Lybrand
L.L.P. as independent accountants for the fiscal year ending December 31, 1996,
and for the approval of the continuation of the Distribution and Management
Agreement among Account TGIS, The Travelers Insurance Company ("Travelers
Insurance") and Tower Square Securities, Inc. ("Tower Square") (formerly
Travelers Equities Sales, Inc.).
COST OF SOLICITATION
The cost of soliciting these proxies will be borne by Travelers Insurance,
the issuer of the variable annuity contracts that use Account TGIS as an
investment alternative. Proxies may be solicited by directors, officers or
employees of Travelers Insurance on behalf of the Board of Managers of Account
TGIS, either in person, by telephone or by telegram.
CONTRACT OWNERS AND THE VOTE
Only Contract Owners of record at the close of business on February 16,
1996 (the record date) will be entitled to notice of and to vote at the annual
meeting. On the record date, there were 102,552,363 units of Account TGIS
outstanding and entitled to be voted at the meeting. The number of full and
fractional votes, which you as a Contract Owner are entitled to cast is set
forth on the enclosed proxy card. As of January 31, 1996, no single person or
entity owned beneficially a contract or contracts entitling it to cast more than
5% of the total outstanding votes.
VOTE REQUIRED
Approval of Proposals 1 and 2 requires the affirmative vote of the holders
of a majority of the voting securities present at the meeting. Approval of
Proposal 3 requires the affirmative "vote of a majority of the outstanding
voting securities" of Account TGIS. Under the Investment Company
<PAGE> 4
Act of 1940, as amended ("1940 Act"), a "vote of a majority of the outstanding
voting securities" means the affirmative vote of (a) 67% of the outstanding
voting securities represented at the meeting, if more than 50% of the
outstanding voting securities are represented, or (b) more than 50% of the
outstanding voting securities, whichever is less.
ANNUAL REPORT
Account TGIS's Annual Report containing financial statements for the fiscal
year ended December 31, 1995, was mailed to Contract Owners of record as of
December 31, 1995. Copies of the Annual Report may be obtained by writing to The
Travelers Insurance Company, Annuity Services, One Tower Square, Hartford,
Connecticut 06183-5030, or by calling (860) 277-3525.
1. ELECTION OF THE BOARD OF MANAGERS
At the meeting, five members of the Board of Managers are to be elected to
hold office until the next annual meeting and until their successors shall have
been elected and qualify. Unless this authority has been withheld on the proxy
card, it is intended that the proxy card will be voted for the election of the
five nominees named below. If any of the nominees are unable to serve at the
time of the meeting, and there is no reason to believe they will not serve, the
persons named as proxies may vote for any other person or persons as they may
determine at their discretion. The following nominees are recommended by the
Nominating Committee pursuant to their meeting held on January 18, 1996.
<TABLE>
<CAPTION>
CONTRACTS
NOMINEE FOR OWNED
MEMBER PRINCIPAL OCCUPATION 12/31/95
- ------------------- ---------------------------------------------------------- ----------
<C> <S> <C>
Heath B. McLendon* Managing Director (1993-present), Smith Barney Inc. None
Age 62 ("Smith Barney"); Chairman (1993-present), Smith Barney
Member Since 1995 Strategy Advisors, Inc.; President (1994-present), Smith
Barney Mutual Funds Management Inc.; Chairman and Director
of forty-one investment companies associated with Smith
Barney; Chairman, Board of Trustees, Drew University;
Trustee, The East New York Savings Bank; Advisory
Director, First Empire State Corporation; Chairman, Board
of Managers, seven Variable Annuity Separate Accounts of
The Travelers Insurance Company+; Chairman, Board of
Trustees, five Mutual Funds sponsored by The Travelers
Insurance Company++; prior to July 1993, Senior Executive
Vice President of Shearson Lehman Brothers Inc.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
CONTRACTS
NOMINEE FOR OWNED
MEMBER PRINCIPAL OCCUPATION 12/31/95
- ------------------- ---------------------------------------------------------- ----------
<C> <S> <C>
Knight Edwards Of Counsel (1988-present), Partner (1956-1988), Edwards & None
Age 72 Angell, Attorneys; Member, Advisory Board (1973-1994),
Member Since 1987 thirty-one mutual funds sponsored by Keystone Group, Inc.;
Member, Board of Managers, seven Variable Annuity Separate
Accounts of The Travelers Insurance Company+; Trustee,
five Mutual Funds sponsored by The Travelers Insurance
Company++.
Robert E. McGill, III Retired manufacturing executive. Director (1983-1995), None
Age 64 Executive Vice President (1989-1994) and Senior Vice
Member Since 1987 President, Finance and Administration (1983-1989), The
Dexter Corporation (manufacturer of specialty chemicals
and materials); Vice Chairman (1990-1992), Director
(1983-1995), Life Technologies, Inc. (life
science/biotechnology products); Director (1994-present),
The Connecticut Surety Corporation (insurance); Director
(1995-present) Calbiochem Novachem International (life
science/biotechnology products); Director (1995-present),
Chemfab Corporation (manufacturer of specialty materials);
Member, Board of Managers, seven Variable Annuity Separate
Accounts of The Travelers Insurance Company+; Trustee,
five Mutual Funds sponsored by The Travelers Insurance
Company++.
Lewis Mandell Dean, College of Business Administration (1995-present), None
Age 53 Marquette University; Professor of Finance (1980-1995) and
Member Since 1990 Associate Dean (1993-1995), School of Business
Administration, and Director, Center for Research and
Development in Financial Services (1980-1995), University
of Connecticut; Director (1992-present), GZA
Geoenvironmental Tech, Inc. (engineering services);
Member, Board of Managers, seven Variable Annuity Separate
Accounts of The Travelers Insurance Company+; Trustee,
five Mutual Funds sponsored by The Travelers Insurance
Company++.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
CONTRACTS
NOMINEE FOR OWNED
MEMBER PRINCIPAL OCCUPATION 12/31/95
- ------------------- ---------------------------------------------------------- ----------
<C> <S> <C>
Frances M. Hawk Portfolio Manager (1992-present), HLM Management Company, None
Age 48 Inc. (investment management); Assistant Treasurer,
Member Since 1991 Pensions and Benefits Management (1989-1992), United
Technologies Corporation (broad-based designer and
manufacturer of high technology products); Member, Board
of Managers, seven Variable Annuity Separate Accounts of
The Travelers Insurance Company+; Trustee, five Mutual
Funds sponsored by The Travelers Insurance Company++.
</TABLE>
- ---------------
+ These seven Variable Annuity Separate Accounts are: The Travelers Growth and
Income Stock Account for Variable Annuities; The Travelers Quality Bond
Account for Variable Annuities; The Travelers Money Market Account for
Variable Annuities; The Travelers Timed Growth and Income Stock Account for
Variable Annuities; The Travelers Timed Short-Term Bond Account for Variable
Annuities; The Travelers Timed Aggressive Stock Account for Variable
Annuities and The Travelers Timed Bond Account for Variable Annuities.
++ These five Mutual Funds are: Capital Appreciation Fund; Cash Income Trust;
High Yield Bond Trust; Managed Assets Trust and The Travelers Series Trust.
* Mr. McLendon is an "interested person" within the meaning of the 1940 Act by
virtue of his position as Director of The Travelers Investment Management
Company ("TIMCO"), the investment adviser to Account TGIS. TIMCO is a wholly
owned subsidiary of Smith Barney Holdings Inc., a wholly owned subsidiary of
Travelers Group Inc. Mr. McLendon also owns shares and options to purchase
shares of Travelers Group Inc., the indirect parent of The Travelers
Insurance Company.
Prior to each annual meeting of Contract Owners at which members of the
Board of Managers are to be elected, or if a vacancy in the Board of Managers
occurs between such meetings, the Nominating Committee of the Board of Managers
recommends candidates for nomination as members of the Board of Managers.
Account TGIS' Nominating Committee consists of those members of the Board of
Managers not affiliated as employees of Travelers Group Inc. or its
subsidiaries. Currently, these are Knight Edwards, Robert E. McGill, III, Lewis
Mandell and Frances M. Hawk. During the fiscal year ended December 31, 1995, the
Nominating Committee held one meeting. The Committee will consider potential
nominees recommended by Contract Owners. Any Contract Owner desiring to present
a candidate to the Committee for consideration should submit the name of the
candidate, in writing, to Account TGIS' Secretary prior to December 31, 1996.
MEETINGS
There were four meetings of the Board of Managers of Account TGIS during
1995. All members of the Board of Managers attended at least 75% of the
aggregate of its meetings and the meetings of the committees of which they were
members.
4
<PAGE> 7
REMUNERATION OF THE BOARD OF MANAGERS
Members of the Board of Managers who are also employees of Travelers Group
Inc. or its subsidiaries are not entitled to any fee. Members of the Board of
Managers who are not affiliated as employees of Travelers Group Inc. or its
subsidiaries receive an aggregate annual retainer of $17,000 for service on the
Boards of the seven Variable Annuity Separate Accounts established by Travelers
Insurance and the five Mutual Funds sponsored by Travelers Insurance. They also
receive an aggregate fee of $2,000 for each meeting of such Boards attended. As
indicated under "Distribution and Management Agreement" on page 8, such
compensation is currently paid by Travelers Insurance.
2. RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS
It is proposed that Contract Owners ratify the action of the Board of
Managers, taken on January 18, 1996 by a unanimous vote, cast in person,
including those members of the Board of Managers who are not interested persons
of Account TGIS, to select the firm of Coopers & Lybrand, L.L.P. as the
independent accountants of Account TGIS for the fiscal year ending December 31,
1996. A representative from Coopers & Lybrand, L.L.P. is expected to be present
at the meeting with the opportunity to make a statement if desired, and is
expected to be available to respond to appropriate questions.
The services provided to Account TGIS by Coopers & Lybrand, L.L.P. were in
connection with the audit function for the year 1995 and included primarily the
examination of Account TGIS' financial statements and the review of filings made
with the Securities and Exchange Commission.
Account TGIS' Audit Committee consists of those members of the Board of
Managers not affiliated as employees of Travelers Group Inc. or its
subsidiaries. Currently, these are Knight Edwards, Robert E. McGill, III, Lewis
Mandell and Frances M. Hawk. The Audit Committee reviews the services performed
by Coopers & Lybrand L.L.P. During the fiscal year ended December 31, 1995, the
Audit Committee held one meeting.
3. APPROVAL OF THE CONTINUATION OF THE DISTRIBUTION AND MANAGEMENT
AGREEMENT
It is proposed that Contract Owners approve the continuation of the
Distribution and Management Agreement among Account TGIS, Travelers Insurance
and Tower Square which contains a provision relating to the method of payment of
market timing fees.
Account TGIS is one of four timed Variable Annuity Managed Separate
Accounts (the "Timed Accounts") established for the purposes of segregating the
assets of Variable Annuity Contract Owners who enter into third party market
timing services agreements ("Timed Contract Owners"), and avoiding the adverse
effects that transfers made by market timers for Timed Contract Owners could
have on the interests of non-Timed Contract Owners. Copeland Financial Services,
Inc. ("Copeland"), a registered investment adviser and an affiliate of Travelers
Insurance, offers market timing services to the Timed Contract Owners pursuant
to the terms of a market timing services agreement. For these services, Copeland
charges a one-time $30 application fee and an additional fee equivalent to an
annual rate of 1.25% of the current value of assets that it times.
5
<PAGE> 8
While the market timing agreements are between the Timed Contract Owners
and Copeland, Travelers Insurance is also a signatory to the agreement and is
solely responsible for payment of the fee to Copeland. Paragraph 5 of the
Distribution and Management Agreement provides that Account TGIS will reimburse
Travelers Insurance for the payment of the market timing fees to Copeland.
Travelers Insurance seeks such reimbursement through the deduction of a daily
asset charge against the assets of Account TGIS. Travelers Insurance does not
retain any portion of the fee and is not compensated for any costs incurred in
connection with the payment or deduction of the fees. While the Distribution and
Management Agreement remains in effect, this is the sole market timing fee
payment method available to Timed Contract Owners.
On February 7, 1990, an Order was received from the Securities and Exchange
Commission granting certain exemptions from the 1940 Act necessary to permit
this method of payment of market timing fees. One of the conditions of the Order
was that the Distribution and Management Agreement be approved annually by a
majority of the outstanding voting securities of each Timed Account. The
continuation of the Distribution and Management Agreement was last approved by
Timed Contract Owners on April 28, 1995.
The Board of Managers of Account TGIS has caused Account TGIS to execute
the Distribution and Management Agreement in order to facilitate this convenient
payment method for Timed Contract Owners. However, in causing Account TGIS to
execute this Agreement, the Board of Managers has not approved or made any
recommendations with respect to the suitability of market timing services in
general, the quality or level of services provided by the current or any future
market timers, or the level of the market timing fees. Because the market timing
services will continue to be provided pursuant to individual agreements between
Timed Contract Owners and Copeland, the Board of Managers does not exercise any
supervisory or oversight role with respect to market timing services or the fees
charged therefor.
Timed Contract Owners receive a quarterly statement indicating the
estimated dollar amount of market timing fees deducted from their Timed Accounts
during the quarter. Timed Contract Owners also receive a chart comparing the
performance of their selected timing strategy for the prior twelve months either
with the return of a comparable non-Timed Account or, upon prior approval of the
Securities and Exchange Commission, with the return of an appropriate index.
A "vote of a majority of the outstanding voting securities" of Account TGIS
is required to approve the continuation of the Distribution and Management
Agreement. If Contract Owners in Account TGIS do not approve this matter, market
timing fees relating to Account TGIS will be paid by pre-authorized partial
surrenders, to the extent permitted by tax law, or by sending a check to
Copeland, and the Distribution and Management Agreement will continue in effect,
with the exception of paragraph 5, which contains these provisions.
A copy of the Distribution and Management Agreement is attached hereto as
Exhibit A.
6
<PAGE> 9
ADDITIONAL INFORMATION
CONTRACT OWNER PROPOSALS
All Contract Owner proposals to be included in the Proxy Statement for the
next annual meeting must be received by Account TGIS's Secretary at One Tower
Square, Hartford, Connecticut 06183 by November 1, 1996.
It is suggested that Contract Owners submit their proposals by Certified
Mail -- Return Receipt Requested. The Securities and Exchange Commission has
adopted certain requirements which apply to any proposals of Contract Owners.
THE INVESTMENT ADVISER
The Travelers Investment Management Company ("TIMCO"), One Tower Square,
Hartford, Connecticut, serves as investment adviser to Account TGIS pursuant to
an Investment Advisory Agreement (the "Advisory Agreement") dated December 30,
1992. The Advisory Agreement was approved by a vote of Contract Owners at the
annual meeting held on April 23, 1993.
Under the terms of the Advisory Agreement, TIMCO is paid an amount
equivalent an annual basis to 0.3233% of the value of Account TGIS's assets. The
advisory fees paid by Account TGIS for the fiscal year ended December 31, 1995,
were $479,029.
As required by the 1940 Act, the Advisory Agreement will continue in effect
for a period of more than two years from the date of its execution only so long
as its continuance is specifically approved at least annually (i) by a vote of a
majority of the Board of Managers, or (ii) by a vote of a majority of the
outstanding voting securities of Account TGIS. In addition, and in either event,
the terms of the Advisory Agreement must be approved annually by a vote of a
majority of the Board of Managers who are not parties to, or interested persons
of any party to, the Advisory Agreement, cast in person at a meeting called for
the purpose of voting on such approval and at which the Board of Managers is
furnished such information as may be reasonably necessary to evaluate the terms
of the Advisory Agreement. The Advisory Agreement further provides that it will
terminate automatically upon assignment; may be amended only with prior approval
of a majority of the outstanding voting securities of Account TGIS; may be
terminated without the payment of any penalty at any time upon sixty days'
notice by the Board of Managers or by a vote of a majority of the outstanding
voting securities of Account TGIS; and may not be terminated by TIMCO without
prior approval of a new investment advisory agreement by a vote of a majority of
the outstanding voting securities of Account TGIS.
TIMCO is a registered investment adviser which has provided investment
advisory services since its incorporation in 1967. TIMCO currently manages
assets of over $1.1 billion. TIMCO is a wholly owned subsidiary of Smith Barney
Holdings Inc. (388 Greenwich Street, New York, New York), a wholly owned
subsidiary of Travelers Group Inc. (388 Greenwich Street, New York, New York).
As of December 31, 1995, no person or entity was known to be a beneficial owner
of 10% or more of the voting securities of Travelers Group Inc.
7
<PAGE> 10
The principal executive officers and directors of TIMCO are set forth in
the following table along with their addresses and principal occupations, as
well as their respective positions with registered investment companies for
which TIMCO currently acts as investment adviser.
<TABLE>
<CAPTION>
POSITION WITH
NAME AND ADDRESS OF THE TRAVELERS POSITION WITH
PRINCIPAL EXECUTIVE INVESTMENT INVESTMENT
OFFICER AND DIRECTORS MANAGEMENT COMPANY COMPANIES(1) PRINCIPAL OCCUPATION
- --------------------- ---------------------- ------------------- ------------------------
<S> <C> <C> <C>
Jeffrey B. Lane(2) Director and Chairman Vice Chairman,
Smith Barney Inc.
Heath B. McLendon(2) Director Chairman, Board of Managing Director
Managers/Trustees Smith Barney Inc.
Kent A. Kelley(3) Director and Chief Chief Executive Officer
Executive Officer TIMCO
Sandip A. Bhagat(3) Director and President President
TIMCO
James W. Churm(2) Corporate Secretary Senior Vice President
Managing Counsel
Smith Barney Inc.
</TABLE>
- ---------------
(1) Investment companies currently managed by TIMCO: The Travelers Growth and
Income Stock Account for Variable Annuities; The Travelers Timed Growth and
Income Stock Account for Variable Annuities; The Travelers Timed Short-Term
Bond Account for Variable Annuities; The Travelers Timed Aggressive Stock
Account for Variable Annuities; Capital Appreciation Fund and Managed Assets
Trust.
(2) The address for the above-named persons is Smith Barney Inc., 388 Greenwich
Street, New York, New York.
(3) The address for the above-named persons is The Travelers Investment
Management Company, One Tower Square, Hartford, Connecticut.
- --------------------------------------------------------------------------------
Investment advice and decisions for each of TIMCO's clients are made in
accordance with their investment objectives and policies. Securities considered
for investment by Account TGIS are also usually considered appropriate for
investment by other clients served by TIMCO. When the same investment advice or
decision is made for more than one client at or about the same time and
purchases or sales are made pursuant thereto, transactions in such securities
are generally allocated daily among the clients pro rata in relation to the size
of the order, using the daily average price. It is recognized that in some cases
this practice could have a detrimental effect on the price or volume of
securities being bought or sold by Account TGIS, while in other cases it may
produce better executions or lower brokerage rates.
DISTRIBUTION AND MANAGEMENT AGREEMENT
Tower Square Securities, Inc. ("Tower Square"), One Tower Square, Hartford,
Connecticut, is the principal underwriter for Account TGIS. Tower Square is a
wholly owned subsidiary of The
8
<PAGE> 11
Travelers Insurance Group Inc., which is an indirectly wholly owned subsidiary
of Travelers Group Inc.
Under the terms of the Distribution and Management Agreement, Travelers
Insurance provides all administrative services and mortality and expense risk
guarantees related to variable annuity contracts issued by Travelers Insurance
and funded by Account TGIS. For providing mortality and expense risk guarantees,
Travelers Insurance receives compensation in an amount equivalent to 1.25% on an
annual basis of the value of the net assets of Account TGIS. Tower Square
performs all sales functions relative to the sale and distribution of the
Contracts. Tower Square receives no compensation for its services as principal
underwriter.
During 1995, Travelers Insurance received $143,108 for sales and
administrative expenses and $1,843,842 for mortality and expense risk
guarantees, for a total of $1,986,950 under the Distribution and Management
Agreement. Travelers Insurance pays all sales costs and costs of qualifying
Account TGIS and its contracts with regulatory authorities, as well as all
printing costs and costs of proxy solicitation, sales literature, custodian,
accountants' and legal fees, and compensation of the Board of Managers.
Travelers Insurance also provides without cost to Account TGIS all necessary
office space, facilities and personnel to manage its affairs.
The Distribution and Management Agreement will, as required by the 1940
Act, continue in effect for a period more than two years from the date of its
execution only so long as its continuance is specifically approved at least
annually (i) by a vote of a majority of the Board of Managers, or (ii) by a vote
of a majority of the outstanding voting securities of Account TGIS. In addition,
and in either event, the terms of the Distribution and Management Agreement must
be approved annually by a vote of a majority of the Board of Managers who are
not parties to, or interested persons of any party to, the Distribution and
Management Agreement, cast in person at a meeting called for the purpose of
voting on such approval. Additionally, Contract Owners have been asked to
approve the continuation of the Distribution and Management Agreement to allow
Travelers Insurance to deduct amounts necessary to pay fees to market timers
which provide market timing investment advisory services to Timed Contract
Owners. If the continuation of the Distribution and Management Agreement is
approved by Contract Owners of Account TGIS, Travelers Insurance will continue
to deduct amounts necessary to pay these fees and will, in turn, pay such fees
to the market timers. If Contract Owners do not approve such continuation, the
Agreement will continue in effect, with the exception of paragraph 5 of the
Agreement which contains these provisions.
The Board of Managers of Account TGIS, including those members of the Board
of Managers who are not interested persons of Account TGIS, voting in person on
January 18, 1996 at a meeting called for the purpose of voting on such approval,
by unanimous action voted to approve continuance of the Distribution and
Management Agreement.
4. OTHER BUSINESS
The Board of Managers knows of no other business to be presented at the
meeting. The proxy card gives the persons named in the proxy discretion to vote
according to their best judgment if any other business properly comes before the
meeting.
9
<PAGE> 12
EXHIBIT A
DISTRIBUTION AND MANAGEMENT AGREEMENT
DISTRIBUTION AND MANAGEMENT AGREEMENT (the "Agreement") made this 1st day
of February, 1995 by and among The Travelers Insurance Company, a Connecticut
stock insurance company (hereinafter the "Company"), Tower Square Securities,
Inc., (formerly Travelers Equities Sales, Inc.) a Connecticut general business
corporation (hereinafter "Tower Square"), and The Travelers Timed Growth and
Income Stock Account for Variable Annuities (hereinafter "Account TGIS"), a
separate account of the Company established by its Chairman of the Board and
Chief Executive Officer on October 30, 1986 pursuant to a resolution of the
Company's Board of Directors on August 4, 1967, pursuant to Section 38-154a of
the Connecticut General Statutes. This Agreement supersedes the Distribution and
Management Agreement dated December 30, 1992 between the Company and Account
TGIS.
1. The Company hereby agrees to provide all administrative services
relative to variable annuity contracts and revisions thereof (hereinafter
"Contracts") sold by the Company, the net proceeds of which or reserves for
which are maintained in the Account TGIS.
2. Tower Square hereby agrees to perform all sales functions relative
to the Contracts. The Company agrees to reimburse Tower Square for
commissions paid, other sales expenses and properly allocable overhead
expenses incurred in performance thereof.
3. For providing the administrative services referred to in paragraph
1 above, and for reimbursing Tower Square for the sales functions referred
to in paragraph 2 above, the Company will receive the deductions for sales
and administrative expenses which are stated in the Contracts.
4. The Company will furnish at its own expense and without cost to
Account TGIS the administrative expenses of Account TGIS, including but not
limited to:
(a) office space in the offices of the Company or in such other
place as may be agreed upon from time to time, and all necessary office
facilities and equipment;
(b) necessary personnel for managing the affairs of Account TGIS,
including clerical, bookkeeping, accounting and other office personnel;
(c) all information and services, including legal services,
required in connection with registering and qualifying Account TGIS or
the Contracts with federal and state regulatory authorities, preparation
of registration statements and prospectuses, including amendments and
revisions thereto, all annual, semi-annual and periodic reports, notices
and proxy solicitation materials furnished to variable annuity Contract
Owners or regulatory authorities, including the costs of printing and
mailing such items;
(d) the costs of preparing, printing, and mailing all sales
literature;
(e) all registration, filing and other fees in connection with
compliance requirements of federal and state regulatory authorities;
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<PAGE> 13
(f) the charges and expenses of any custodian or depository
appointed by Account TGIS for the safekeeping of its cash, securities
and other property;
(g) the charges and expenses of independent accountants retained by
Account TGIS;
(h) expenses of Contract Owners' and Board of Managers' meetings;
(i) all expenses of and compensation paid to Members of the Board
of Managers of Account TGIS; and
(j) reimbursement for amounts paid by Account TGIS for
indemnification of the Board of Managers of Account TGIS, the officers
and agents of Account TGIS pursuant to Article VI of Account TGIS' Rules
and Regulations, provided that in the case of any person who is a
director, officer or agent of the Company, the Company's obligation will
be limited to such amount as the Board of Directors of the Company
determines to be reasonable.
Provided, however, that the Company shall not be obligated to pay capital
gains taxes, and any other taxes based on income of, assets in or the existence
of Account TGIS.
5. Provided Contract Owners annually approve this Agreement at a
meeting of Contract Owners held for that purpose, Account TGIS will
reimburse the Company for charges and expenses paid by the Company to
registered investment advisers which provide market timing investment
advisory services relating to the Contracts pursuant to written agreements
between the Contract Owners and such market timing investment advisers,
which agreements are acceptable to the Company. The failure of Contract
Owners to approve this Distribution and Management Agreement shall have no
effect on the validity of the provisions of this Agreement other than this
paragraph 5.
6. The services of the Company and Tower Square to Account TGIS
hereunder are not to be deemed exclusive and the Company and Tower Square
will be free to render similar services to others so long as its services
hereunder are not impaired or interfered with thereby.
7. The Company agrees to guarantee that the annuity payments will not
be affected by mortality experience (under Contracts the reserves for which
are invested in Account TGIS) and assumes the risks (a) that the actuarial
estimate of mortality rates among annuitants may prove erroneous and that
reserves set up on the basis of such estimates will not be sufficient to
meet the Company's variable annuity payment obligations, and (b) that the
charges for services and expenses of the Company set forth in the
Contracts, including the payment of any guaranteed minimum death benefit
prior to the Maturity Date specified in the Contract, may not prove
sufficient to cover its actual expenses. For providing these mortality and
expense risk guarantees, the Company will receive from Account TGIS an
amount per valuation period of Account TGIS, as provided from time to time.
8. This Agreement shall continue in effect for a period of more than
two years from the date of its execution, only so long as such continuance
after said date is specifically approved at least annually by a vote of a
majority of the Board of Managers, who are parties to such
11
<PAGE> 14
Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval, or by a vote of
a majority of the outstanding voting securities of Account TGIS; provided,
however, that this Agreement will terminate automatically in the event of
its assignment by either party.
9. Notwithstanding termination of this Agreement, the Company will
continue to provide administrative services and mortality and expense risk
guarantees provided for herein with respect to the Contracts in effect on
the date of termination, and the Company shall continue to receive the
compensation provided under this Agreement.
10. This Agreement is subject to the provisions of the Investment
Company Act of 1940, as amended, and the rules of the Securities and
Exchange Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officials thereunto duly authorized and, in the case
of the Company and Tower Square, the seals to be affixed as of the day and year
first above written.
[SIGNATURE LINES OMITTED]
12
<PAGE> 15
THE TRAVELERS TIMED
GROWTH AND INCOME
STOCK ACCOUNT
FOR VARIABLE ANNUITIES
PROXY STATEMENT
VG-160 1996
101
<PAGE> 16
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
Proxy for the Annual Meeting of Contract Owners to be held on April 19, 1996
The undersigned, revoking all proxies heretofore given, hereby appoints Heath
B. McLendon, Robert E. McGill, III, or either one of them, as Proxies, with
full power of substitution, to vote on behalf of the undersigned all units of
The Travelers Timed Growth and Income Stock Account for Variable Annuities
which the undersigned is entitled to vote at the Annual Meeting of Contract
Owners to be held at 8:30 a.m. on Friday, April 19, 1996 at One Tower Square,
Hartford, Connecticut, and at any adjournment thereof, in the manner directed
below with respect to the matters described in the Proxy Statement for the
Annual Meeting, receipt of which is hereby acknowledged, and in their
discretion, upon such other matters as may properly come before the Annual
Meeting or any adjournment thereof.
<TABLE>
<CAPTION>
FOR FOR, except WITHHOLD
Please vote by filling in the appropriate box below, as shown, using blue or all vote withheld AUTHORITY
black ink or dark pencil. Do not use red ink. /X/ nominees for nominees for all
listed below nominees
<S> <C> <C> <C>
1. Election of the Board of Managers - Nominees: / / / / / /
Heath B. McLendon, Knight Edwards, Robert E. McGill, III, Lewis Mandell,
and Frances M. Hawk.
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
2. Ratification of the selection of Coopers & Lybrand L.L.P. as / / / / / /
independent accountants for the fiscal year ending December 31, 1996.
3. Approval of the continuation of the Distribution and Management / / / / / /
Agreement among The Travelers Timed Growth and Income Stock Account
for Variable Annuities, The Travelers Insurance Company and Tower
Square Securities, Inc.
</TABLE>
In their discretion, the Proxies are authorized to vote on any and all other
business as may properly come before the meeting.
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF CARD. 101
<PAGE> 17
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF MANAGERS. THE BOARD OF
MANAGERS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3. THE UNITS REPRESENTED
HEREBY WILL BE VOTED BY THE PROXIES IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED CONTRACT OWNER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 3.
------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED
PRE-ADDRESSED, POSTAGE-PAID ENVELOPE.
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW.
------------------------------------------
DATE:_________________,1996
If signing in a representative capacity (as attorney, executor
or administrator, trustee, guardian or custodian, corporate
officer or general partner), please indicate such capacity
following signature. Proxies for custodian accounts must
be signed by the named custodian, not by the minor.
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Signature(s) if held jointly (Title(s), if required) 101
