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FILE NOS: 2-53757
811-2571
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 QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES
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(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] No fee required.
[ ] 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:
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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:
- --------------------------------------------------------------------------------
(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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THE TRAVELERS QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES
ONE TOWER SQUARE
HARTFORD, CONNECTICUT 06183
NOTICE OF ANNUAL MEETING
March 12, 1997
To Variable Annuity Contract Owners:
Notice is hereby given that the Annual Meeting of Variable Annuity Contract
Owners of The Travelers Quality Bond Account for Variable Annuities ("Account
QB") will be held at its offices at One Tower Square, Hartford, Connecticut, on
Monday, April 28, 1997 at 9:00 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 QB for the year ending December 31, 1997.
3. To amend the fundamental investment policy and restriction to
permit unlimited investment in liquid restricted securities.
4. To amend the fundamental investment policy and restriction to limit
the investment in illiquid securities to 5% of the Account's net assets.
5. To act on any and all other business as may properly come before
the meeting.
The close of business on February 21, 1997 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.
LOGO
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.
YOUR VOTE IS VERY IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES THAT
YOU OWN.
002
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THE TRAVELERS QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES
PROXY STATEMENT FOR THE ANNUAL MEETING OF VARIABLE ANNUITY CONTRACT OWNERS
TO BE HELD ON MONDAY, APRIL 28, 1997
THE BOARD OF MANAGERS OF THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE
ANNUITIES (ACCOUNT QB) 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
9:00 a.m. on Monday, April 28, 1997, at the offices of Account QB, One Tower
Square, Hartford, Connecticut. This proxy material is being to be mailed to
Contract Owners beginning on or about March 12, 1997.
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 QB'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, 1997 and to
amend the fundamental investment policy and restriction to permit unlimited
investment in liquid restricted securities, and to limit the investments in
illiquid securities to 5% of the net sets of Account QB.
COST OF SOLICITATION
The cost of soliciting these proxies will be borne by The Travelers
Insurance Company ("Travelers Insurance"), the issuer of the variable annuity
contracts that use Account QB 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 QB, 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 21,
1997 (the record date) will be entitled to notice of and to vote at the annual
meeting. On the record date, there were 32,677,026 units of Account QB
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, 1997, 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 require the affirmative vote of the holders
of a majority of the voting securities present at the meeting in person or by
proxy. A quorum present for Proposals 1
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and 2 is 35% of the voting securities of Account QB present at the meeting in
person or by proxy. Approval of Proposals 3 and 4 requires the affirmative "vote
of a majority of the outstanding voting securities" of Account QB. Under the
Investment Company 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. For purposes of
determining the presence of a quorum for transacting business at the meeting for
Proposals 3 and 4 abstentions will be treated as shares that are present but
which have not been voted. For this reason, abstentions will have the effect of
a "no" vote for purposes of obtaining the requisite approval of a proposal.
ANNUAL REPORT
Account QB's Annual Report containing financial statements for the fiscal
year ended December 31, 1996 was mailed to Contract Owners of record as of
December 31, 1996. Copies of the Annual Report and the most recent semi-annual
report succeeding Account QB's Annual Report may be obtained by writing to The
Travelers Insurance Company, Annuity Services, One Tower Square, Hartford,
Connecticut 06183-5030, free of charge or by calling 1-800-842-9368.
1. ELECTION OF THE BOARD OF MANAGERS
At the meeting, five (5) 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 (5) 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 31, 1997.
<TABLE>
<CAPTION>
CONTRACTS
NOMINEE FOR OWNED
MEMBER PRINCIPAL OCCUPATION 12/31/96
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<C> <S> <C>
Heath B. McLendon* Managing Director (1993-present), Smith Barney Inc. None
Age 63 ("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>
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<TABLE>
<CAPTION>
CONTRACTS
NOMINEE FOR OWNED
MEMBER PRINCIPAL OCCUPATION 12/31/96
- ------------------- ---------------------------------------------------------- ----------
<C> <S> <C>
Knight Edwards Of Counsel (1988-present), Partner (1956-1988), Edwards & None
Age 73 Angell, Attorneys; Member, Advisory Board (1973-1994),
Member Since 1975 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, Retired manufacturing executive. Director (1983-1995), None
III Executive Vice President (1989-1994) and Senior Vice
Age 65 President, Finance and Administration (1983-1989), The
Member Since 1975 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) CN Bioscience, Inc. (life sci-
ence/biotechnology products); Director (1995-present),
Chemfab Corporation (specialty materials manufacturer);
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 54 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++.
Frances M. Hawk Portfolio Manager (1992-present), HLM Management Company, None
Age 49 Inc. (investment management); Assistant Treasurer, Pen-
Member Since 1991 sions 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>
3
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+ 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 Investment
Company Act of 1940, as amended ("1940 Act") by virtue of his position as
Managing Director of Smith Barney and Director of The Travelers Investment
Management Company, the investment adviser to some of the Separate Accounts,
both indirect wholly owned subsidiaries 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 QB's 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, 1996, 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 QB's Secretary prior to December 31, 1997.
MEETINGS
There were four meetings of the Board of Managers of Account QB during
1996. 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.
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 $19,000 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 $2,500 for each meeting of such Boards attended.
Currently Travelers Insurance pays such compensation under an agreement with
Account QB.
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RECOMMENDATION OF THE BOARD OF MANAGERS
The Board of Managers of Account QB recommends approval of the Proposal to
elect the five (5) members of the Board.
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 31, 1997, by a unanimous vote, cast in person,
including those members of the Board of Managers who are not interested persons
of Account QB, to select the firm of Coopers & Lybrand L.L.P. as the independent
accountants of Account QB for the fiscal year ending December 31, 1997. 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 QB by Coopers & Lybrand L.L.P. were in
connection with the audit function for the year 1996 and included primarily the
examination of Account QB's financial statements and the review of filings made
with the Securities and Exchange Commission.
Account QB's 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, 1996, the
Audit Committee held one meeting.
RECOMMENDATION OF THE BOARD OF MANAGERS
The Board of Managers of Account QB recommends approval of the Proposal to
ratify the selection of Coopers & Lybrand L.L.P. as independent accountants.
3. PROPOSAL TO AMEND THE FUNDAMENTAL INVESTMENT POLICY AND RESTRICTION OF THE
FUND TO PERMIT UNLIMITED INVESTMENT IN LIQUID RESTRICTED SECURITIES.
4. PROPOSAL TO AMEND THE FUNDAMENTAL INVESTMENT POLICY AND RESTRICTION TO LIMIT
THE INVESTMENT IN ILLIQUID SECURITIES TO 5% OF THE ACCOUNT'S NET ASSETS.
The Board of Managers has approved, subject to shareholder vote, an
amendment to the fundamental investment policy and restriction of Account QB
which would remove any limitation on the investment in liquid restricted
securities. The current fundamental investment policy and restriction concerning
restricted securities provides that Account QB may:
(7) invest up to 5% of its assets in restricted securities (securities
which may not be publicly offered without registration under the Securities
Act of 1933).
The current fundamental investment policy and restriction limits investment
in all restricted securities, including "liquid" and "illiquid" restricted
securities. Illiquid securities are assets which may not be sold or disposed of
in the ordinary course of business within seven days at approximately the value
at which a mutual fund has valued the investment. The staff of the
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Securities and Exchange Commission takes the position that an investment
portfolio must limit investments in illiquid securities to 15% of the
portfolio's assets. (This 1940 Act limitation is intended to insure that a
portfolio has sufficient liquid assets to make timely payment for redeemed
shares under normal market conditions.)
The Board of Managers believes that the current fundamental investment
policy and restriction set forth above is more restrictive than is necessary.
The policy and restriction encompass both liquid and illiquid restricted
securities. In addition, Rule 144A offerings, which are restricted securities,
have become more prevalent in the marketplace as a means to finance a company's
debt, rather than a public offering. The Fund would like to take greater
advantage of purchasing restricted securities such as Rule 144A offerings.
As discussed above, the Board of Managers feels that the amendment of the
fundamental investment policy and restriction regarding restricted securities
and illiquid securities would enhance the Fund's investment flexibility and is
in line with current securities market practice.
CONSIDERATIONS OF THE BOARD OF MANAGERS
After consideration of the relevant factors, the Board of Managers of
Account QB has determined that it is appropriate for shareholders to amend the
Fund's fundamental investment policy and restriction to invest in restricted
securities and illiquid securities up to 5% of the net assets of Account QB.
RECOMMENDATION OF THE BOARD OF MANAGERS
The Board of Managers of Account QB recommends approval of Proposals 3 and
4 to amend the Fund's fundamental investment policy and restriction to permit
unlimited investment in liquid restricted securities and permit investment in
illiquid securities to 5% of the net assets of Account QB.
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.
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 QB's Secretary at One Tower
Square, Hartford, Connecticut 06183 by November 3, 1997.
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.
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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.
7
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THE INVESTMENT ADVISER
Travelers Asset Management International Corporation ("TAMIC"), One Tower
Square, Hartford, Connecticut, serves as investment adviser to Account QB.
DISTRIBUTION AND MANAGEMENT AGREEMENT
Tower Square Securities, Inc. ("Tower Square"), One Tower Square, Hartford,
Connecticut, is the principal underwriter for Account QB. Travelers Insurance,
One Tower Square, Hartford, Connecticut is the administrator of Account QB.
OFFICERS OF THE FUND
<TABLE>
<CAPTION>
POSITION
HELD
NAME TITLE SINCE
- ------------------------------ ----------------------------- -----------------
<S> <C> <C>
Ernest J. Wright.............. Secretary October 21, 1994
Ian R. Stuart................. Principal Accounting Officer April 24,
1992
</TABLE>
8
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THE TRAVELERS
QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES
PROXY STATEMENT
VG-102 1997
002
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THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES
Proxy for the Annual Meeting of Contract Owners to be held on April 28, 1997
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 Quality Bond Account for Variable Annuities which the undersigned is
entitled to vote at the Annual Meeting of Contract Owners to be held at 9:00
a.m. on Monday, April 28, 1997 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>
<S> <C> <C> <C>
WITHHOLD FOR, except
Please vote by filling in the appropriate box FOR AUTHORITY vote withheld
below, as shown, using blue or black ink all for all for nominees
or dark pencil. Do not use red ink. [ ] nominees nominees listed below
1. Election of the Board of Managers - Nominees: [ ] [ ] [ ]
Heath B. McLendon, Knight Edwards,
Robert E. McGill, III, Lewis Mandell,
and Frances M. Hawk. |_
FOR AGAINST ABSTAIN
2. Ratification of the selection of Coopers & [ ] [ ] [ ]
Lybrand L.L.P. as independent accountants for
the fiscal year ending December 31, 1997.
|_ |_ |_
3. To amend the fundamental imvestment policy and
restriction to permit unlimited investment in
liquid restricted securities. [ ] [ ] [ ]
4. To amend the fundamental investment policy and
restriction to limit theinvestment in illiquid
securities to 5% of the Account's net assets. [ ] [ ] [ ]
</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. 002
<PAGE> 13
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF MANAGERS. THE BOARD OF
MANAGERS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 AND 4. 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, 3 AND 4.
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: ,1997
-----------------------
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) 002
