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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
AMENDMENT NO. 1
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:
[x] Preliminary proxy statement. [ ] Confidential, for use of the Commissioner
[ ] Definitive proxy statement. only (as permitted by Rule 14a-6(e)(2).
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
TRAVELERS SERIES TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
N/A
- --------------------------------------------------------------------------------
(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)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies: N/A
(2) Aggregate number of securities to which transaction
applies: N/A
(3) Per unit price or other underlying value of transaction
computed pursuant to Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was
determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: $0
[ ] 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: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
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[FORM OF SUPPLEMENTAL SOLICITATION LETTER]
THE TRAVELERS INSURANCE COMPANY
Travelers Series Trust
Disciplined Small Cap Stock Portfolio
One Tower Square, Hartford, Connecticut 06183
August 20, 2001
Dear Variable Annuity Contract or
Variable Life Insurance Policy Owner:
Shares of Disciplined Small Cap Stock Portfolio (the "Fund") of Travelers
Series Trust (the "Trust") have been purchased at your direction by The
Travelers Insurance Company ("The Travelers") through one or more of its
separate accounts to fund benefits payable under your variable annuity contract
or variable life insurance policy (collectively, the "variable contracts"). The
Travelers, as the shareholder of record and legal owner of those separate
accounts, has been asked to approve a proposal to liquidate the Fund (the
"Liquidation"), and, subject to the instructions from owners of variable
contracts with interests in the separate account(s) invested in the Fund
("contract owners"), to transfer the liquidation proceeds into one or more other
investment options offered through the separate account(s) of each contract
owner's variable contract. If a contract owner fails to provide timely
instructions, The Travelers will transfer the proceeds into the money market
investment option applicable to a particular variable contract. Either form of
transfer is referred to at times as a "Transfer." The Liquidation and Transfer
are referred to together as the "Liquidation Plan." As a contract owner, The
Travelers is asking you for instructions as to how to vote the shares of the
Fund that are attributable to your variable contract.
Under the Liquidation Plan, as of the liquidation date The Travelers will:
(1) request redemption of Fund shares, which will cause the Fund to sell its
assets; (2) redeem all Fund shares at net asset value; and (3) subject to the
instructions of contract owners, purchase shares of one or more other investment
options offered through each variable contract by means of a Transfer. In those
cases where a contract owner has not provided transfer instructions, The
Travelers will purchase shares of the money market investment option available
to the particular variable contract. Two money
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market funds will be used: Travelers' Money Market Portfolio and Smith Barney
Money Market Portfolio.
Here are some facts about the Liquidation Plan that will be useful to you
as you vote:
1. The Liquidation Plan will have no impact on your right to transfer into
other investment options offered through their applicable variable
contracts. You may make transfers at any time and at no additional
charge prior to the liquidation date (October 26, 2001).
2. There will be no transfer fees, charges or other costs for the separate
account(s) in which you have an interest to own shares of the money
market fund or another fund to which you transfer your contract value.
3. There will be no alteration to contract owners' rights and The
Travelers' obligations under the variable contracts, and contract
owners' account values will not be diminished.
4. The Liquidation and Transfer will create no tax liability for contract
owners.
YOUR VOTE IS IMPORTANT!
Management has proposed the Liquidation Plan to eliminate funds, including
Disciplined Small Cap Stock Portfolio, that have lacked broad market appeal,
have failed to generate sufficient assets to operate efficiently, and are not
expected to achieve economies of scale in the future. At a recent meeting, the
Trust's Board of Trustees (the "Board") considered information provided by
management on the Fund's lack of asset growth and market share, the Fund's
expenses, and management's decision to cease offering the fund as an investment
option under these variable contracts.
After carefully considering the merits of the proposal, the Board has
determined that it is in the best interests of the Fund and its shareholders and
the underlying contract owners to liquidate the Fund. Furthermore, the Board
concluded that, because of the limited number of variable contracts through
which the Fund is offered, and because no single comparable mutual fund exists
as a transfer investment option, the Liquidation Plan is in the best interests
of contract owners, as the Plan allows contract owners to provide transfer
instructions pertaining to their liquidated assets into other investment op-
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tions available under their variable contracts, and also provides, absent a
contract owner's instructions, a default option that should preserve principal
for the contract owners with no adverse tax consequences.
The Board recommends that you read the enclosed materials carefully and
then instruct The Travelers to vote FOR the proposal. PLEASE TAKE A MOMENT NOW
TO SIGN AND RETURN THE VOTING INSTRUCTION FORM(S) IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. For more information, please call The Travelers at 1-800-842-8573.
Respectfully,
The Travelers
WE URGE YOU TO SIGN AND RETURN THE VOTING INSTRUCTION FORM(S) IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
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THE TRAVELERS SERIES TRUST
Disciplined Small Cap Stock Portfolio
One Tower Square
Hartford, Connecticut 06183
August 20, 2001
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
Notice is hereby given that a Special Meeting of shareholders of
Disciplined Small Cap Stock Portfolio (the "Fund") of The Travelers Series Trust
(the "Trust") will be held at the offices of the Trust at One Tower Square,
Hartford, Connecticut 06183 on September 26, 2001, at 9:00 a.m. (Eastern time)
and any adjournments thereafter (the "Meeting") to approve or disapprove a
proposal to liquidate the Fund (the "Liquidation"), and, subject to the
instructions of owners of variable annuity and variable life insurance contracts
with interests in the Fund, transfer the liquidation proceeds into new
investments or, absent any such instructions, transfer such proceeds into the
money market investment option applicable to a particular variable contract
(either form of transfer is referred to at times as a "Transfer").
In addition, the Fund may act on any and all such other business as may
properly come before the Meeting or any adjournment(s) thereof. The Trust's
Board of Trustees has fixed the close of business on July 25, 2001, as the
record date for the determination of shareholders entitled to notice of, and to
vote at, the Meeting and any adjournments thereof. Please refer to the
accompanying Proxy Statement for more information about the proposal to be
considered and acted upon at the Meeting.
By order of the Board of Trustees.
LOGO
Ernest J. Wright, Secretary
Please complete, date, sign, and return the enclosed voting instruction
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
ATTRIBUTABLE TO YOUR CONTRACT.
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THE TRAVELERS SERIES TRUST
Disciplined Small Cap Stock Portfolio
One Tower Square
Hartford, Connecticut 06183
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON SEPTEMBER 26, 2001
THE BOARD OF TRUSTEES OF THE TRAVELERS SERIES TRUST (THE "TRUST") SOLICITS
YOUR PROXY FOR USE AT A SPECIAL MEETING OF SHAREHOLDERS OF DISCIPLINED SMALL CAP
STOCK PORTFOLIO (THE "FUND") AND AT ANY ADJOURNMENT THEREOF (THE "MEETING"). The
Meeting will be held at the Trust's offices, One Tower Square, Hartford,
Connecticut 06183, at 9:00 a.m. (Eastern time) on September 26, 2001. The
Travelers Insurance Company and The Travelers Life and Annuity Company
(together, "The Travelers") is furnishing this Proxy Statement in connection
with the solicitation of voting instructions, as further described below, from
owners of variable annuity and variable life insurance contracts ("contract
owners") issued by The Travelers, for use at the Meeting. The Board of Trustees
expects this Proxy Statement will be mailed to contract owners on or about
August 20, 2001.
GENERAL
The purpose of the Meeting is to approve or disapprove a proposal to
liquidate the Fund (the "Liquidation"), and, subject to the instructions of
contract owners with interests in the separate accounts invested in the Fund,
transfer the liquidation proceeds into investment options available to a
contract owner or, absent such contract owner's instructions, into the money
market investment option applicable to a particular variable contract (either
form of transfer is referred to at times as a "Transfer"). The Liquidation and
Transfers may be referred to at times as the "proposal" or the "Liquidation
Plan" or the "Plan and is attached as Exhibit A".
In addition, the Fund may act on any and all such other business as may
properly come before the Meeting or any adjournment(s) thereof.
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VOTE BY PROXY
The Travelers Series Trust offers shares of the Fund only for purchase by
insurance company separate accounts. Thus, the insurance companies are
technically the shareholders of this Fund, and under the Investment Company Act
of 1940, as amended, (the "1940 Act"), may be deemed to be in control of the
Fund. Nevertheless, with respect to the Special Meeting, an insurance company
will solicit and accept timely voting instructions from its contract owners who
have interests in the Fund through a variable annuity or variable life contract
(collectively the "variable contracts") as of the Record Date. The Trust's Board
has set the close of business on July 25, 2001 as the Record Date. As of the
record date, separate accounts that fund the variable contracts issued by The
Travelers were the shareholders of record of all of the Fund's shares. The
Travelers will vote all the Fund's outstanding shares held by the separate
accounts at the Meeting based upon the voting instructions timely received by
The Travelers from contract owners. A voting instruction card is enclosed for
your use. You may revoke your voting instruction card at any time before 5:00
p.m. Eastern time on September 24, 2001, by executing and delivering later-dated
signed voting instructions to The Travelers. All voting instruction cards that
are properly executed, received in time, and not so revoked will be used by The
Travelers in voting in accordance with the instructions on the cards, if any.
Voting instruction cards that are properly executed but provide no specific
instructions will be voted in favor of the proposal.
COST OF SOLICITATION
The costs and expenses incurred in connection with the solicitation of
voting instructions on behalf of the Fund for use at the Meeting, including the
costs of printing, mailing, and reasonable expenses of outside counsel and Trust
counsel, will be paid by an affiliate of Citigroup, an affiliate of the Trust.
The Fund's shareholders and underlying contract owners will bear no cost or
expenses in connection with the solicitation or any transfers effected in
anticipation, or as a result, of the liquidation. In addition, the contract
owners of the variable annuity and variable life contracts will not incur an
increase in the contract fees and expenses as a result of the Liquidation Plan.
In addition to the solicitation of voting instructions by mail, the Trust's
trustees, officers, and/or employees of The Travelers or its affiliates or an
entity engaged by The Travelers may solicit voting
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instructions in person, by telephone or by electronic mail (email). The
Travelers, located at One Tower Square, Hartford, Connecticut 06183, serves as
the Fund's sponsor and depositor.
SHAREHOLDERS AND THE VOTE
The Travelers are the legal owners of all of the Fund's shares and, as
such, have the right to vote upon certain matters that are required by
Massachusetts law, the Agreement and Declaration of Trust, and the Investment
Company Act of 1940, as amended (the "1940 Act"), to be approved or ratified by
the shareholders and to vote upon any other matter that may be voted upon at a
shareholders' meeting.
This Proxy Statement is being mailed to owners of, or participants in,
variable contracts with assets allocated to the Fund through certain separate
accounts (namely, the contract owners) as of the close of business on July 25,
2001 (the record date). As of the record date, there were a total of
17,709,086.604 Fund shares outstanding. The contract owners instruct The
Travelers how to vote the shares held by the separate accounts in which the
contract owners have an interest. The Travelers, then, will vote all of the
Fund's shares in accordance with instructions received from the contract owners.
The Travelers intends to vote all shares for which no timely instructions are
received in proportion to the instructions that are received from the other
contract owners. Each full share is entitled to one vote, and any fractional
share is entitled to a fractional vote. Only Fund shareholders as of the record
date will be entitled to notice of and to vote at the Meeting.
The number of full and fractional votes for which a contract owner is
entitled to provide voting instructions is set forth on the enclosed
instructions card(s). Contracts owned by two or more persons (whether as joint
tenants, co-fiduciaries, or otherwise) will be voted as follows, unless a
written instrument or court order providing to the contrary has been filed with
the Trust: (1) if only one person votes, that vote will bind all; (2) if more
than one person votes, the vote of the majority will bind all; and (3) if more
than one person votes and the vote is evenly divided, the vote will be cast
proportionately.
The presence at any shareholders' meeting in person or by proxy of the
shareholders entitled to cast at least one-fourth of the votes shall be
necessary and sufficient to constitute a quorum for the transaction of business.
If the necessary quorum is not present at the Meeting, or if the necessary
quorum is present at the Meeting but
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sufficient votes to approve the proposal are not received, or if other matters
arise requiring shareholder attention, the persons named as proxies may propose
one or more adjournments of the Meeting, in accordance with applicable law, to
permit further solicitation of proxies. Any such adjournment requires the
affirmative vote of a majority of the shares present in person or by proxy at
the Meeting to be adjourned. The persons named in the enclosed proxies will vote
in favor of such adjournment those voting instructions that they are entitled to
vote in favor of the proposal that has not been adopted, will vote against any
adjournments those voting instructions required to be voted against the
proposal, and will not vote any voting instructions that direct them to abstain
from voting on such proposal.
The Travelers, through certain of its separate accounts, owns all of the
shares of the Fund and has undertaken to vote all shares in accordance with
voting instructions received on a timely basis from the contract owners of
variable contracts who have allocated amounts to one or more of the separate
accounts that invest in the Fund. The Travelers will vote Fund shares for which
no timely instructions are received, and any shares owned by separate accounts
funding qualified plans, in proportion to the voting instructions that are
received with respect to all policies and contracts participating in the Fund.
Voting instruction cards that are properly executed and returned but that have
no voting designation with respect to the proposal will be voted "FOR" the
proposal.
VOTE REQUIRED: APPROVAL OF THE PROPOSAL REQUIRES A MAJORITY VOTE OF THE
FUND'S OUTSTANDING SHARES PRESENT AT THE MEETING OR REPRESENTED BY PROXY IF THE
NECESSARY QUORUM OF THE OUTSTANDING SHARES OF THE FUND ARE PRESENT IN PERSON OR
BY PROXY.
The Trust's Board of Trustees (the "Board") has unanimously approved and
recommends that Fund shareholders approve the following Proposal.
PROPOSAL
APPROVAL OF THE PLAN TO LIQUIDATE THE DISCIPLINED SMALL CAP STOCK PORTFOLIO
AND TRANSFER THE LIQUIDATION PROCEEDS INTO ANOTHER INVESTMENT OPTION AVAILABLE
TO A PARTICULAR VARIABLE CONTRACT.
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BACKGROUND
Under the proposal, the Board is asking shareholders to approve the Plan,
which provides for the Liquidation of the Fund, and, subject to the instructions
of contract owners with interests in the separate account invested in the Fund,
Transfers of the liquidation proceeds either (1) based upon each contract
owner's transfer instructions, into one or more other investment options offered
through the separate account(s) of each contract owner's variable contract, or
(2) absent timely instructions from a contract owner, into the money market
investment option applicable to the particular variable contract.
Management previously has advised the Board of Trustees ("Board") of The
Travelers Series Trust (the "Trust") that management was seeking to rationalize
and focus the investment options available to contract owners purchasing the
Travelers' products. Management indicated that certain of its funds, including
the Fund, have failed to generate sufficient asset size to operate efficiently
and are not expected to achieve economies of scale in the future. Accordingly,
management was no longer willing to continue subsidization of the Fund's
expenses.
Management also considered that, as a practical matter, the variable
products are limited in the number of investment options that can be offered,
and therefore, it seems prudent to eliminate as investment options those funds,
including the Fund, that are small or have limited appeal to contract owners.
Accordingly, because no one investment alternative is available to every
contract that may use the Fund as an investment option and because management
has determined to eliminate the Fund as an investment option offered through the
variable contracts, the Board has concluded that it is in the best interest of
the Trust, the Fund and its shareholders and the underlying contract owners to
liquidate the Fund under the Plan.
LIQUIDATION PLAN
Under the Liquidation Plan, The Travelers will redeem Fund shares as of
October 26, 2001 (the "Liquidation Date") at the Fund's net asset value and,
subject to the instructions of contract owners with interests in the separate
account invested in the Fund, will purchase shares of one or more other
investment options offered through each variable contracts. In those cases where
a contract owner has not provided such transfer instructions, The Travelers will
purchase shares of the money market investment option available to
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the particular variable contract. A money market fund was selected as a default
option primarily on the following factors: (1) preservation of capital for the
contract owners; and (2) no new market risk the contract owner had not selected.
Two money market funds will be used: Travelers' Money Market Portfolio and Smith
Barney Money Market Portfolio. As a result, the Board believes that the value of
contract owners' account values would not be diminished by the Plan.
Contract owners will incur no transfer fees or other charges under the
Liquidation Plan. Also, contract owners' rights and The Travelers' obligations
under the variable contracts will not be altered in any way. In addition, as
contract owners are not restricted in the number of transfers permitted under
the variable contracts during a contract year, the Transfers of liquidated
proceeds will have no impact on the number of transfers that a contract owner is
permitted to make during the contract year. All expenses of the solicitation,
Liquidation, and Transfers, including legal, accounting, and other fees and
charges will be paid by an affiliate of Citigroup, an affiliate of the Trust.
TRANSFER RIGHTS
Contract owners have the right to transfer from this Fund into other
investment options offered through their variable contracts at any time prior to
or on the date of the Liquidation. Any contract owners wishing information on
any investment option or assistance to implement a transfer prior to the
Liquidation Date should call The Travelers at 1-800-842-8573.
In seeking to ensure that contract owners, and not The Travelers, will make
the investment decisions as to a contract owner's benefits, The Travelers will
not only request voting instructions as to the Plan but also will request
transfer instructions from contract owners as to the investment of assets to be
liquidated. Further, as of the Liquidation Date and on behalf of contract owners
who have not exercised their transfer rights prior to the Liquidation Date, The
Travelers will take one of two actions: for contract owners who have provided
transfer instructions, The Travelers will arrange for the Transfer of any
liquidation proceeds to the investment option(s) selected by the contract owner
in accordance with his or her instructions; for contract owners who have not yet
provided transfer instructions, The Travelers will Transfer the liquidation
proceeds to the default money market investment option available to the
particular variable contract.
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Contingent on receiving approval at the Meeting, the Trust will liquidate
the Fund in accordance with the Plan. Any assets that remain in the Fund on the
Liquidation Date will be transferred in shares of beneficial interest of Money
Market Portfolio or Smith Barney Money Market Portfolio, as the money market
investment option applicable to a particular variable contract (together, the
"Money Market Funds").
BOARD EVALUATION AND APPROVAL
On July 27, 2001, the Board met in person at a meeting called for the
purpose of considering, among other things, the Plan. At the meeting, the Board
considered data provided by management on the Fund's lack of asset growth and
market share and the Fund's expenses.
The Board considered, among other things, the following information:
1. During 2000 and 2001, based on an examination of contract owners'
investment allocations, that many contract owners have been allocating
their purchase payments to equity investments other than the Fund, as
well as transferring from the Fund into other investment options, within
the applicable variable contracts;
2. Under an agreement with the Trust, management had agreed to reimburse
the Fund for certain ordinary operating expenses in excess of 1.00% of
the Fund's average daily net assets. This reimbursement policy has
permitted the Fund's annual operating expense ratio to remain
competitive in the market since the Fund's commencement of operation on
May 1, 1998. Given the lack of asset growth and interest of the contract
owners, management has concluded it can no longer devote assets to
maintain that expense reimbursement policy. Absent the proposed
liquidation, contract owners will bear the entire expenses of operating
the Fund without benefit of the reimbursement policy, at a time when
operating expenses are relatively high and net asset size is decreasing;
3. Management's decision to eliminate the Fund as an investment option for
the contracts, which would eliminate the Fund's source or new assets;
and
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4. The fact that under the Liquidation Plan, contract owners will have no
adverse tax consequences.
In connection with the recommended default money market fund investment
options, management discussed the safety and stability of the principal
investment in these Funds for the period until a contract owner makes a new
investment allocation. Management noted that no only should capital be preserved
but also that the total operating expense ratios of the respective money market
funds would be substantially less that that operating expense ratio for the
Fund, which would result in some additional benefit to the contract owners.
The Board concluded that, under the facts and circumstances, including the
Fund's limited asset levels, higher gross expenses, contract owner interest in
other equity investment options, and management's decision to eliminate the Fund
from the investment options made available to new contracts, it is in the best
interests of the Fund and its shareholders and the underlying contract owners to
liquidate the Fund. Furthermore, the Board concluded that, because of the number
of variable contracts through which the Fund is offered and because no single
comparable mutual fund exists as a transfer investment option, the Liquidation
Plan is in the best interests of contract owners, as it allows contract owners
to provide instructions as to the transfer of the Fund's liquidated assets into
other investment options available under the variable contracts, which prevents
adverse tax consequences to contract owners, and also provides a default option
that should preserve principal for the contract owners who have not provided
transfer instructions.
If approved by the Fund's shareholders, the Plan will become effective as
of October 26, 2001 or such other date as determined by the Board.
Summary
Based upon its review, the Board concluded that the Plan is in the best
interests of the Fund and its shareholders. Accordingly, after consideration of
the above and such other factors and information it considered relevant, the
Board of Trustees unanimously approved the Plan and voted to recommend its
approval by the Fund's shareholders.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" THE PLAN OF
LIQUIDATION UNDER THIS PROPOSAL.
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PLAN PROVISIONS
GENERAL. The Plan will be accomplished as of the Liquidation Date by The
Travelers: (1) requesting a redemption of Fund shares, which will cause the Fund
to sell its assets; (2) redeeming all Fund shares at net asset value; and (3)
purchasing with the proceeds: (a) as instructed by each contract owner, shares
of another mutual fund investment option offered through the contract owner's
variable contract, in accordance with the new investment option's current
prospectus; or (b) absent any instruction by a contract owner, shares in the
applicable money market fund offered through the variable contracts, in
accordance with each money market fund's current Prospectus.
Contract owners who do not wish to have liquidation proceeds invested in
another investment option and, instead, have requested a surrender of such
proceeds (as discussed more fully below under "Surrender Rights" below) pursuant
to the variable contract, will be paid such proceeds in cash in accordance with
the provisions of the applicable variable contract and prospectus.
As a result, the Liquidation Plan will not diminish the value of contract
owners' investment interests liquidated from the Fund and transferred to another
investment option as instructed by a contract owner, or transferred to the
applicable money market fund. If a contract owner exercises the surrender right
with regard to the liquidation proceeds, he or she may incur income tax
liability and a tax penalty. Contract owners are encouraged to refer to their
variable contract prospectuses for a discussion of the possible tax consequences
resulting from a surrender. ALSO, VARIABLE CONTRACT OWNERS SHOULD SEEK QUALIFIED
TAX ADVICE BEFORE EXERCISING THEIR SURRENDER RIGHTS.
Contract owners will not incur any fees or charges under the Liquidation
Plan if they choose to transfer to another investment option from the Fund, or
if their investment interests in the Fund are transferred to the applicable
money market fund.
TIMING. Contract owners will be notified if shareholders vote to approve
the Liquidation Plan and the date the Plan is effective. The Trust intends to
provide notice after the Meeting and a second reminder notice prior to the
Liquidation Date. These notices are intended to provide contract owners with
sufficient time to provide transfer instructions to The Travelers once the
liquidation is certain.
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SURRENDER RIGHTS. In lieu of a transfer discussed above, certain contract
owners may elect to receive in cash the value of their investment interests from
the Fund by exercising their surrender rights as provided in the contract. (Such
a surrender may have adverse tax consequences. See "Federal Tax Consequences.")
If a contract owner elects to make such a surrender in connection with their
liquidation proceeds within 30 days after the Liquidation Date, The Travelers
will waive any surrender charges that The Travelers would normally impose on
such surrenders.
FEDERAL TAX CONSEQUENCES. The Board has been advised by counsel that the
Liquidation and Transfer under the Plan will not create any tax liability for
contract owners.
However, if a contract owner exercises his or her surrender rights, the
contract owner may incur income tax liability and a tax penalty. Contract owners
are encouraged to refer to their variable contract prospectuses for a discussion
of the possible tax consequences resulting from a surrender. Also, variable
contract owners should seek qualified tax advice before exercising their
surrender rights.
GENERAL INFORMATION
OTHER MATTERS TO COME BEFORE THE MEETING
The Trust's Management does not know of any matters to be presented at the
Meeting other than those described in this Proxy Statement. If other business
should properly come before the Meeting, the persons holding proxies will vote
on that business in accordance with their best judgment.
INVESTMENT ADVISER
Travelers Asset Management International Company LLC ("TAMIC"), One Tower
Square, Hartford, Connecticut 06183, serves as investment adviser to the Fund.
TAMIC is an indirect wholly owned subsidiary of Citigroup Inc. TAMIC has engaged
Travelers Investment Management Company ("TIMCO") as subadviser to the Fund.
TIMCO is located at 100 First Stamford Place, Stamford, Connecticut 06902.
SERVICE PROVIDERS
The Trust has no underwriter or distributor. The Travelers Insurance
Company, One Tower Square, Hartford, Connecticut 06183
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serves as the Trust's administrator. Smith Barney Fund Management LLC, an
affiliate of Travelers Insurance, serves as subadministrator to the Trust and is
compensated by The Travelers Insurance Company.
SHAREHOLDER PROPOSALS
The Trust does not have annual or any other regularly scheduled meetings of
shareholders, and currently has no plans to hold another meeting of shareholders
of the Fund. Special Meetings of the shareholders may be called by the Board
upon the written request of shareholders owning at least 25% of the outstanding
shares entitled to vote and such written shareholder requests must be received
by the Trust's Secretary at One Tower Square, Hartford, Connecticut 06183 within
a reasonable time before the solicitation is made.
Contract owners should submit their proposals for a subsequent shareholder
meeting by Certified Mail -- Return Receipt Requested by December 31, 2001. The
Securities and Exchange Commission has adopted certain requirements that apply
to any proposals of shareholders.
REPORTS TO SHAREHOLDERS
The Trust will furnish, without charge, a copy of its Annual Report and
Semi-Annual Report upon request. To request a copy of either report, please
contact the Trust at its address specified above or call The Travelers at
1-800-842-8573.
In order that the presence of a quorum at the meeting may be assured,
prompt execution and return of the enclosed voting instruction form is
requested. A self-addressed, postage-paid envelope is enclosed for your
convenience.
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LIQUIDATION PLAN
Disciplined Small Cap Stock Portfolio (the "Fund") of The Travelers Series
Trust (the "Trust") shall proceed to a complete liquidation according to the
procedures set forth in this Liquidation Plan (the "Plan"), effective as of
October 26, 2001.
1. The Plan was approved by a majority of the Board of Trustees of the
Fund on July 27, 2001.
2. Effective as of October 26, 2001 (the "Liquidation Date") and subject
to the approval of the Fund's shareholders, the Fund will cease to offer its
shares to insurance company separate accounts in connection with variable
annuity and variable life insurance contracts (the "variable contracts") issued
by The Travelers Life Insurance Company and its affiliates (the "Travelers") and
shall not engage in any business activities, except for the purpose of preparing
to liquidate the Fund's assets, liquidating the Fund's assets, terminating its
business and affairs, and investing any remaining assets of the Fund into an
applicable money market investment option, taking reasonable steps to preserve
the value of the Fund's assets, and distributing the Fund's assets to the
shareholders in accordance with the Plan, provided, however that the Fund may
continue to carry on its activities as a series investment company, as described
in its then current Prospectus, with regard to existing shareholders and assets,
until final distribution of assets to shareholders. The Fund shall cause the
orderly liquidation of its assets to cash consistent with the terms of the Plan,
by sale or holding to maturity of its investments as the Trust's Officers and
the Fund's investment adviser shall determine to be advisable, and pay or
provide for the payment of all outstanding obligations, taxes, and other
liabilities, accrued or contingent. The Fund shall be deemed to have duly
provided for payment by remitting to The Travelers, as administrator, funds for
such purposes.
3. The Trust's officers shall provide advance notice to shareholders and
owners of variable life insurance policies and annuity contracts ("contract
owners") of the liquidation of the Fund, and each contract owner will be
encouraged and given several opportunities to make a new investment decision
prior to liquidation of the Fund's assets on the Liquidation Date.
4. The Trust's Officers shall request instructions from the contract
owners as to the investment of assets to be liquidated, and arrange for the
investment of these proceeds by the shareholders in accordance with these
instructions.
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5. If a contract owner has not given instructions to the Trust by the
Liquidation Date, any assets that remain in the Fund shall be liquidated, and
the Officers of the Trust shall arrange for the distribution of the proceeds to
Shareholders on a pro-rata basis, to be invested in shares of beneficial
interest of Money Market Portfolio or Smith Barney Money Market Portfolio, as
the money market investment option applicable to a particular variable contract.
6. Prior to the Liquidation Date, contract owners that request to redeem
all or any portion of the value of their variable contracts, shall receive the
cash surrender value in accordance with the provisions of the applicable
variable contract and prospectus.
7. Dividends on each of the Fund's shares, consisting of substantially all
of the Fund's undistributed taxable net investment income and undistributed
taxable capital gain shall be declared to the shareholders of record as of the
close of business on the third day prior to the Liquidation Date, payable to
such shareholders on the Liquidation Date in additional shares at the net asset
value per share next determined following the time of declaration, and the
shareholders' proceeds shall: (1) according to a new investment decision by a
contract owner, immediately be invested for the account of the contract owner in
accordance with the new investment option's current Prospectus; (2) absent a new
investment decision by a contract owner, immediately be invested for the account
of the contract owner in accordance with the Money Market Portfolio's or Smith
Barney Money Market Portfolio's current Prospectus, as the case may be, or (3)
in the case that a contract owner requests a surrender of the variable contract,
pay such proceeds in cash in accordance with the provisions of the applicable
variable contract and prospectus.
8. Upon the completion of the liquidation, distribution, and investment of
the Fund's assets under the Plan, the officers shall do any and all things
necessary, with the advice of counsel, to wind up the Fund's affairs, including
filing a final N-SAR for the Fund and any other required documents with the
Securities and Exchange Commission and state securities commissions or other
federal or state agencies.
9. Upon completion of the distribution of the remaining proceeds or the
remaining assets, in accordance with Article IX, Section 4, paragraph (d) of the
Agreement and Declaration of Trust, the Fund shall terminate and the Trustees
shall be discharged of any and all further liabilities and duties with respect
to the Fund and its
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shareholders, contract owners, or creditors, and the right, title and interest
of all parties shall be canceled and discharged with respect to the Fund.
10. The officers shall be, and hereby are, authorized by the approval of
the Plan by the Board of Trustees to perform such acts as are necessary,
desirable or convenient, with the advice of counsel, to carry out the details of
the Plan, to execute, acknowledge and deliver any and all documents necessary to
distribute the net assets of the Fund and to carry out the Plan as hereinbefore
set forth.
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[FORM OF VOTING INSTRUCTION FORM]
VOTING INSTRUCTIONS FORM - DISCIPLINED
SMALL CAP STOCK PORTFOLIO
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The Travelers The Travelers Life
Insurance Company and Annuity Company
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</Table>
Voting Instructions solicited by The Travelers Insurance Company and The
Travelers Life and Annuity Company in connection with a solicitation of proxies
by the Board of Trustees of The Travelers Series Trust (the "Trust") for a
special meeting of shareholders (the "Meeting") of the Trust's Disciplined Small
Cap Stock Portfolio (the "Portfolio") to be held on September 26, 2001.
I hereby instruct The Travelers Insurance Company or The Travelers Life and
Annuity Company, as appropriate, to vote the shares of the Trust's Portfolio as
to which I am entitled to give instructions at the Meeting to be held on
September 26, 2001 at 9:00 a.m. Eastern time, at the Trust's Offices, One
Tower Square, Hartford, Connecticut 06183, or any adjournment(s) thereof, as
instructed on reverse side:
I hereby revoke any and all voting instructions with respect to such shares
previously given by me. I acknowledge receipt of the Proxy
21
Statement dated August 20, 2001. I realize that if I return this form without
providing any instructions regarding a proposal, my timely returning of this
form will be deemed to be an instruction to vote in favor of the proposal.
These voting instructions may be revoked at any time prior to the Meeting by
notifying the secretary of The Travelers or the secretary of the Trust, in
writing by 5:00 p.m. on September 24, 2001.
If a contract is held jointly, each contract owner should sign. If only one
signs, his or her signature will be binding. If the contract owner is a
corporation, the President or a Vice President should sign in his or her own
name, indicating title. If the contract owner is a partnership, a partner should
sign in his or her own name, indicating that he or she is a "Partner." If the
contract owner is a trust, the trustee should sign in his or her own name,
indicating that he or she is a "Trustee."
Signature and title:
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Date:
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THIS INSTRUCTION CARD IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. THE
BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSAL. THE SHARES REPRESENTED
HEREBY WILL BE VOTED BY THE PROXIES IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED BENEFICIAL OWNER. IF NO DIRECTION IS MADE, THIS INSTRUCTION CARD
WILL BE VOTED FOR THE PROPOSAL.
Please fill in box(es) as shown using black or blue ink or a number 2 pencil [X]
PLEASE DO NOT USE FINE POINT PENS.
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<Caption>
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For Against Abstain
1. To approve the
Liquidation Plan [ ] [ ] [ ]
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</Table>